NEW ORLEANS-Just how wireless Internet access will explode may depend on how carriers work with Internet players, executives said at last week’s Wireless 2000 show.
While Sprint PCS made one of the largest announcements at the show by teaming up with the country’s biggest Internet service provider, America Online, Vodafone AirTouch Chief Executive Officer Chris Gent said his company will be more cautious in teaming with Internet players.
Customer ownership concerns all carriers. Operators don’t want to be reduced to a pipe when they partner with Web providers. But partnering with a premier Internet company like AOL should spark tremendous growth of wireless Internet usage, said Andy Sukawaty, president of Sprint PCS.
“Of course we’re concerned about ownership, but we don’t want to hold up the explosive growth by not giving customers what they want,” Sukawaty told RCR. “It’s the largest brand on the Internet with the largest national telephone brand. It sends a message that you’re used.”
Sprint PCS, which this year will merge with MCI Worldcom, has been willing to partner with a number of Internet companies including Yahoo!. Last week it made its largest deal announced yet, forming a strategic partnership with AOL that gives the ISP premier placement on the front screen of Sprint PCS Wireless Web phones.
AOL, the largest Internet service provider in the country with 21 million customers, and Sprint PCS hope to grow the pie by driving increased consumer demand, higher use of existing services and a range of new services based on Internet and wireless technology.
“There is a win-win here,” said Dennis Patrick, president of AOL Wireless. “The conflict between carrier and ISPs is exaggerated. There has to be a way to capture that value on both sides … There’s stickiness we will transfer, and there’s a whole host of things like e-commerce and advertising we haven’t begun to understand, but it will grow the pie and value.”
The deal is not exclusive, but Sukawaty hopes Sprint PCS, which introduced Wireless Web service last year, will have the first mover advantage to leverage the strong brands both companies will bring. Sprint PCS already has partnered with Yahoo!, and Sukawaty revealed that a significant number of Yahoo! customers have signed up for Sprint PCS service. About 70 percent of AOL’s customers already use wireless devices.
In contrast, Vodafone Airtouch’s Gent was adamant that customers will access the Web through the carrier’s own portal, and Vodafone AirTouch won’t do any partnerships with portal providers. Vodafone AirTouch is embarking on an enormous initiative to build its own branded wireless portal capable of providing wireless Internet and mobile data service by July in North America, Europe and Australia.
“We want our portal and our customers with it,” said Gent at last week’s keynote session. “We’ll be happy to do deals with AOL and others, but at one step removed. We want to control the customer interface. We won’t surrender this ground.”
The only strategic Internet alliance Vodafone AirTouch has been willing to make is with French company Vivendi, which gave the wireless carrier a footprint in Germany and access to the company’s interactive television business.
“Other than that, there will be no strategic alliances,” said Gent.
Now that Sprint PCS understands the data traffic flows, it plans to introduce more aggressive pricing plans for the service this summer. More than 2.5 million Sprint PCS browser phones are on the network today, Sukawaty said.
The investment community has been clamoring to know Sprint PCS’ figures on data usage and revenue. Sukawaty said the carrier will begin to reveal those numbers later this year.
