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By Ben King, 6 September 2001 18:56

NEWS Orange has spelled out its vision for the future of instant messaging, setting up its own system to rival AOL, Yahoo! and Microsoft. Orange will combine its SMS services into a new instant messanger service that will run on both the internet and mobile phones. The instant messenger service is currently being trialed by Freeserve and Wanadoo, the ISP divisions of the France Telecom group. SMS capability will be added later this year. The system will allow users to track when their friends are online and send them real time text messages via the web and their mobile phones. When new versions of the SMS standard become available, Orange hopes to add pictures, sound and eventually video to the standard text messages. The instant messaging space is particularly fraught, with the three market leaders unable to agree on a way of making their services compatible. Setting up a fourth incompatible system seems sure to complicate the situation further, but Orange's executive vice president for Orange World and Brand Richard Brennan believes Orange may in fact be able to bring the three warring parties together. "The messaging services of AOL, Microsoft and Yahoo! have millions of users but they have no way of making money from it. They're actually coming to us and asking how they can unlock that asset. Adding SMS is a way they can do that," he said. SMS accounts for the majority of Orange's non-voice revenue, which currently makes up nearly 10 per cent of its UK revenues. However, similar moves to extend instant messaging applications across different platforms have proved highly controversial in the past. AOL was told by the FTC that it would have to open its instant messaging service to competition before it was allowed to offer a video service, as a condition of the approval of the $106bn purchase of Time Warner in January. In a further development of its wireless strategy, Orange announced a new mobile information device for consumers, the "Hiptop" computer, developed by US start-up Danger. Orange plans to start selling the £150 device in time for Christmas. The announcements came as Orange unveiled an impressive set of figures, trebling operating profit to E819m (£503m), capping last week's accidental announcement of an 80 per cent rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to E1.634 (1.4bn)bn.