With U.S. operators in the midst of building out 3G networks, wireless firms from around the world are heeding the words of Neil Diamond: They’re coming to America.
But, like George Harrison, they’re finding that it don’t come easy.
Wireless marketing efforts and high-tech applications like mobile TV are quickly gaining traction in European and Asian markets, where consumers have long been accustomed to viewing a phone as more than just a vehicle for voice. But software developers, messaging providers and marketing companies see a coming nexus in the United States between state-of-the-art networks and content-hungry consumers.
And they’re hoping to apply lessons learned overseas to help tap the ripening U.S. market.
“Obviously, it’s much easier to be a pioneer in the wireless industry in the U.S. than in Europe,” said Jan Obrman, chief executive officer of U-Turn Media Group, a mobile media company based in Prague, the Czech Republic. “Europe is somewhat more advanced. Therefore, we have the advantage of having some hands-on experience over the last three or four years.”
U-Turn powers a streaming music portal for the Czech T-Mobile affiliate, and has partnered with Zee Network, India’s largest media company, to offer video programming to wireless users in India and other markets. The company’s U.S. business, which is based in Denver, recently began delivering video content from WISC-TV, a CBS affiliate in Madison, Wisc., to wireless users.
“What we’re witnessing in Europe-it will probably take more than a year, but not much more-is the fact that the mobile handset is actually transforming from a pure communication tool to a media consumption tool,” Obrman said. “That will only become a real-market commercial issue in the U.S. at the end of 2006 (or) beginning of 2007. To get there, we understood that we have to invest pretty heavily.”
The American wireless market presents a double-edged sword to outsiders looking in. In Europe there can be as many as a half-dozen operators serving a country of only several million users, while in the United States four major carriers dominate the market of 170 million subscribers. A single deal can be a make-or-break relationship in the United States, but simply getting face time with a Tier 1 operator can be as rare as scoring an audience with the pope.
And while technology companies and mobile marketing firms rush into the United States, domestic content providers are exporting their wares. The platform may be different, but wireless has at least one thing in common with TV, film and music: Consumers around the world want American content.
Instead of wrestling with big-budget media companies for prime real estate on carrier decks, Israel-based Ki-Bi Mobile Technologies Ltd. is offering content cards through brick-and-mortar retailers and other channels to users in Israel, Europe and Canada. Consumers download the content by dialing a toll-free number and pressing a button to “play” the card into a phone. Ki-Bi’s servers read the tone and download the content to the user’s handset.
The company offers games from U.S. publishers including Mforma and Sorrent, and ringtones from noted artists 50 Cent, Outkast, Sean Paul, Jay-Z and Beyonce. Ki-Bi, which garnered an award for innovation from the Mobile Marketing Association in November, thinks the time is right to use retail to bring mobile content to U.S. consumers.
“I think if you can make it anywhere in retail, it’s the U.S.,” said Gary Yentin, the company’s vice president of business development in North America. “The good news, I think, is that mobile content really has taken a turn upward here. People have a familiarity with it.”
Such a delivery mechanism could be ideal for U.S. consumers, who still haven’t embraced cumbersome WAP decks or mysterious short codes, said Yentin. And the cards also could be used as marketing tools by brands looking to present their message to users via the phone.
Ki-Bi, which launched its North American operations in September, recently began offering cards through Canada’s Rogers Wireless. But the company has found a chicken-and-egg problem: Carrier deals are difficult to cement without ready-made content, and content providers are looking for third parties with solid operator ties.
“It’s a slow process,” conceded Yentin. “We’re going (to content providers and operators) one by one. Everyone’s been very open to (content cards); we’re just going to keep on plowing forward.”
Still other firms see opportunity in what may be the most challenging aspect of the U.S. wireless market: network fragmentation. SurfKitchen, a U.K.-based developer of user interfaces for mobile handsets, hopes bring a simplified user experience to wireless in an effort to drive wireless data revenues. Content-centric mobile virtual network operators will help push such offerings as they come online in the next few years.
“In Europe, the MVNOs are driven very much by low-cost wireless,” said Dave Evans, SurfKitchen’s chief technology officer. “In the U.S., we’re seeing much more data-driven MVNOs, with their own brands and services. They’re not so concerned about the voice revenue.”
Despite the new players and sales channels, Tier 1 operators remain the gateway through which most outsiders access U.S. consumers. While the consolidation of power has advantages-“The greatest thing about (U.S.) operators is that they have a very big stick with which to hit the device manufacturers,” Evans said-the U.S. market remains a daunting hurdle. SurfKitchen boasts several substantial European carrier customers, but has yet to ink a U.S. operator-after banging on the door for more than a year.
“We see huge opportunity in the U.S.; it’s still a major priority,” said Evans. “Unfortunately, some opportunities tend to be so big they take a long time to come to fruition.”
