TEL AVIV, Israel-In a country like Israel where the number of mobile phone lines surpasses fixed lines (2.9 million compared with 2.8 million), where there’s intense competition among the three carriers and churn is high (sometimes 60 percent), and where price is less and less of a differentiation feature, wireless value-added services are increasingly playing an important role.
Along with all its start-up companies in the telecommunications field, Israel has a highly technological and knowledgeable population, which long ago mastered the basics of the cell phone and which is ready for more sophisticated value-added services. This makes the country a hotbed for new developments, something on which both mobile operator Partner Communications and Israeli vendor CT Motion are counting.
Partner, which operates the Orange GSM network in Israel, has installed CT Motion’s Cellebrity platform to provide its business customers with value-added offerings, including location-based mobile data advanced services.
“Operators are desperate for differentiation features that will build long-term customer loyalty,” said Rafi Katz, CT Motion’s chief executive officer.
“This is a new way of looking at cellular service-not [only] the old-fashioned [voice communications],” said Dan Olschwang, product and service development manager at Partner Communications. “Value-added services will be a key driver in differentiating among the companies. How fast can you provide real benefit to your customers?”
Partner currently offers or plans to offer in the near future several advanced services to its customers, such as short message service (SMS); data services through a wireless modem; mobile fax mail; mobile banking with Israel’s largest bank, Bank Leumi; and money transfers through a proprietary authentication protocol.
According to Olschwang, “Israeli cellular phone usage is above average, at about 350 minutes per month per subscriber. The average Partner customer uses [the] phone three or four times more than European counterparts.”
All CT Motion’s applications are interactive, and the company is now developing mass-market applications, such as mobile Yellow Pages and personalized location-based coupons for the mobile-commerce, or m-commerce, field. Its vertical mobile work-force management application, Mobile Command Center, is a software system based on standard cellular data communication and information technologies that allows organizations to track their work forces, relay information and receive data through company databases-a combination of location services and task management.
In Israel, Partner estimates the potential market for mobile work-force management is 600,000 subscribers, with the average revenue per user for mobile work-force management subscribers of US$10 or US$20 per month more than the ARPU of pure voice communications users. Worldwide, mobile professionals correspond to 20 percent to 25 percent of the total cellular subscriber base-a profitable proposition.
As these new services change the face of the mobile sector, the relationship between operators and customers, on the one hand, and operators and suppliers, on the other, also changes. It’s the proverbial paradigm shift.
“[By offering these kinds of services], we can go to the heart of work procedures of an organization, make it more efficient,”
explained Partner’s Olschwang. “We are not talking to purchasing managers anymore, but to the CEO (chief executive officer) and IT (information technology) manager.”
Business subscribers in Israel comprise about 22 percent of the country’s total subscribers. Partner expects to increase its number of business users, which generally are more lucrative than consumer users, through services such as location-based information. In addition, the carrier expects such value-added services to help it maintain the business customers it does have.
“We don’t see ourselves as equipment or software providers anymore, but rather as a long-term ally or partner in the development of these value-added services,” said CT Motion’s Katz. “We give operators a strategic tool, that in turn gives them an edge over their competitors.”
CT Motion entered into a revenue-sharing business model with Partner Communications. Although the companies declined to provide financial details about the venture, the model places some risk with CT Motion because the operator is not required to pay the total system cost up-front.
CT Motion, though based in Israel, is active around the world. The company has contracts for similar services with Deutsche Telekom’s mobile arm, T-Mobil, and Poland’s leading cellular provider, Polkomtel.
