LONDON-The introduction of General Packet Radio Service (GPRS) in Sweden and NTT DoCoMo’s launch of third-generation (3G) services has set the scene for a new approach to mobile devices, both by operators and end users. The market for mobile devices and wireless access is set for significant expansion, largely influenced by mobile content or data services, according to recent research.
McKinsey & Company forecasted that mobile phone and personal digital assistant (PDA) subscribers will reach the 1 billion mark by 2003, outstripping the number of television households worldwide. Research conducted by the Meta Group revealed that around 20 percent of all business-to-business transactions will be via wireless devices.
In Europe alone, one-third of the population will access the Internet via a mobile device by 2004, a report from Forrester revealed. Analysts, including IDC and McKinsey, generally agree that the majority of this growth will be in the enterprise sector as opposed to the consumer market. Wireless devices, while an integral part of everyday life, are set to develop into key enterprise application platforms.
Although enterprise is set to be the major market for 3G applications, it will not be an early driver, according to Steve Ives, chief executive officer (CEO) of Cambridge, U.K.-based 3G Lab. The reason is that the business sector requires custom applications-a process that takes time. DoCoMo’s i-mode service, for instance, was initially launched for the enterprise. It was only after its re-launch to the consumer market that it became its current success.
The development of GPRS and 3G technology has given wireless devices much wider scope for business and consumer use thanks to the combined potential of personalized content and location-based services (LBS), opening up new revenue streams for operators. The mobile phone is set to become a far more sophisticated device providing an end user access to a range of information and entertainment (infotainment) services. For content providers and owners, the ability to deliver their content to any device will be a key issue.
“Personalization and location-based services are the key applications that will get people to spend money on services other than voice,” Ives said. Having invested in costly 3G licenses, 3G operators must ensure that they add value to their proposition.
Meta predicted that up to 95 percent of all m-commerce revenues both for 3G carriers and merchants will come from infotainment services. A key aspect of this shift in mobile-phone use will be end-user experience and the control that the end user has over the content received. Current cellular standards, such as GSM, are limited in the degree to which users can personalize them; downloading individual ring tones is as far as they go. As operators strive to fight off competition in a 3G environment, personalization will be an important differentiator.
The “always on” connection offered by 3G services can be used to access a range of multimedia and interactive services. Sports fans, for example, could access highlights of a game they might have missed, chat with other fans about their favorite team, purchase tickets to the next game, order merchandise and even have the team logo as the background on their screens.
To capitalize on the potential of 3G, however, operators and device manufacturers first need to build out platforms that will enable content providers to deliver their content to 3G devices.
“This is a big shift for operators who are not used to dealing with content other than voice,” said Ives. “DoCoMo has adapted to this model with i-mode.”
With widespread 3G network rollout expected by the end of 2001, operators need to move now to ensure they lay the groundwork to deliver these new services or miss out on the potential revenue streams.
