Major carriers are using third-party hosting services to gauge consumer activities to arrive at pricing models for m-commerce services.
The operators, which include AT&T Wireless Services Group, Cingular Wireless, Verizon Wireless, Alltel Corp. and VoiceStream Wireless Corp., have been using Openwave’s Mobile Access Gateway to monitor online buying preferences of the customers of such outfits as Starbucks and Amazon.com, Barnes and Noble, Travelocity and eBay.
InfoSpace Inc. provides the technology platform and applications while Openwave ensures the link to the consumer activities.
“The carriers are looking for how to have a transaction in place in order to gain visibility in m-commerce and decide who to partner with,” said David Heintzelman, program manager for mobile commerce, Nokia Networks, which also works with InfoSpace.
InfoSpace says it partners with the operators as well as device and equipment manufacturers to offer their customers “the ability to conduct commerce, access information, communicate and otherwise manage their lives whenever they choose, using any Internet device.”
Industry sources and analysts believe this strategy has led operators to arrive at three m-commerce-pricing models: basic fees, premium fees and pay-per-view models. Two recent studies, one conducted by Strategis Group and the other sponsored by Nokia Corp., confirmed these models.
“It’s still pretty early,” said Chris Cone, director of business development at AT&T Wireless, stressing the level of consumer activity is “not anything near the level of e-commerce.”
He noted that AT&T uses the e-wallet application, which documents buyer activities subject to privacy rules.
Cone said InfoSpace provides “the portal functionality and content like calendar, stock quotes, weather and sports.”
The Nokia-sponsored study, conducted by Britain’s largest independent market research agency MORI, demonstrated that 59 percent of U.S. consumers would want to bundle all the models.
The MORI report, however, noted that about 90 percent of people in the United States, Great Britain, South Korea, Italy, Brazil and Finland who are interested in using m-commerce services would also be ready to pay extra for transactions over their mobile devices.
The study also found that about eight times as many people would use m-commerce compared with the number of users today.
The Strategis Group study, “U.S. Wireless Portals: Trends and Outlook 2001,” foresees basic fees not exceeding $15 per month and premium fees not more than $40 per month. In regard to pay-per-view, the report expects consumers to pay a per-download fee for recent releases or customized playlists. Strategis Group senior analyst Cynthia Hswe conducted the study.
“The jury is still out on charges,” noted Heintzelman, explaining that it will depend on the response of end users.
According to Hswe, the basic plan charges for limited access to content on a wireless portal, the premium pricing plan is the cost of securing access as a subscriber to such services as e-mail, unified messaging account and connectivity to a desktop PDA application and pay-per-view is payment per transaction.
The MORI study showed that 24 to 54 percent of respondents across the markets stated they would be willing to carry out a transaction of more than $25 using a mobile device, noting that the initial adoption of m-commerce is likely to be on a similar scale as today’s usage of e-commerce, “which is already somewhat mature.”
“As applications flesh out, messages will be commoditized,” said Adam Guy, senior analyst with Strategis Group, adding that he expects each market to have up to five operators and that would intensify competition and differentiation.
“All carriers have to find killer applications in order to survive,” remarked Heintzelman.
The Strategis Group study identifies four strategies for operators to ensure viable m-commerce services and they include empowering the subscriber by enabling subscribers to create their own personal portals; customizing content from the handset or else they will customize from the desktop; ensuring one-click access; and offering tiered pricing plans.
The MORI study said convenience and control would factor into the choices of customers. The study participants love m-commerce because they can avoid cash or waiting in queues, exercise control over expenditures and buy whatever they want, according to the report.
“It provides immediate gratification you can’t get anywhere else,” said Cone.
Unforeseen circumstances like car breakdowns and being lost make m-commerce a necessity, noted the MORI report.
The report also said end users prefer local transactions, which prefigures the place of location-based services in the future.
“It is clear from this study that the market sees m-commerce as a natural extension of e-commerce, “said Reza Chady, global head of market research, Nokia Networks. “While it is a new concept to many people, they are already expecting to use this method of payment in the future, which makes us feel confident that the potential mass market for m-commerce is huge.”
