NEW YORK-To simulate third-generation wireless before its deployment, Finland’s Sonera has just embarked on a new program, Sonera Mspace, said Kaj-Erik Relander, the company’s executive vice president.
In partnership with content, service and technology providers, Mspace will conduct in Finland “real life trials with consumers and corporations that will look, feel and work like the 3G mobile market,” he said at the Merrill Lynch & Co. Inc. “Global Telecom Investors Conference.”
This next-generation wireless initiative is part of Sonera’s strategy to position itself as “a leading mobile commerce facilitator,” a role it seeks to add to its ongoing pursuits as both carrier and software provider, Relander said.
Incorporating messaging, user location, purchasing decisions, payment and delivery of goods or services in a seamless manner is “fairly complicated” to execute, he added.
“These kinds of back office processes for m-commerce are something traditional operators lack.”
As the second-generation world of 400 or so facilities-based wireless carriers expands into a third-generation universe with many more virtual carriers, the need for mobile commerce facilitation will only increase, in Sonera’s view.
“At the end of the day, all operators will have their own portals because all (securities) analysts will ask `Why don’t you have your own portal?’,” said Relander.
“The 3G world will be more of a virtual operator model and most will lack the skills of the large players. We can charge for our services because we can identify what customers want. And we have a large venture capital program aimed at developing products that will differentiate us.”
As Sonera sees it, next-generation wireless is more likely to be a “multi-access world,” he added. In this environment, services will use the network best suited to the task, be it second-generation voice, 2.5-generation packet data, 3G wireless broadband or Bluetooth and infrared connectivity for personal area networks.
Regardless of what networks transmit data, proliferating access to the Internet is irrevocably altering the basic form of commerce. This is another fundamental restructuring that Sonera seeks to anticipate and capitalize on.
“Industries will deconstruct as coordination costs decrease, traditional delivery channels are replaced by communities of interest and any content can be accessed anywhere, anytime,” Relander said.
In this transformation of commerce from a value chain model to a value network model, Sonera seeks a leadership role as one of the “nodal companies (that) manage webs of alliances of all the partners needed to complete the service architecture,” he said.
Sonera also wants to maintain and enhance its connection to the end-user by becoming the trusted guardian of personal information and the protector against the onslaught of electronic junk mail.
“M-junk is more powerful than e-junk because you only get notification so you have to check it out for nothing,” Relander said.
By the end of March, the company will begin a full-scale commercial rollout of Sonera SmartTrust for user authentication and identification for electronic commerce transactions. SmartTrust provides strong encryption and digital signatures employing wireless Public Key Infrastructure for the Subscriber Identity Modules used on existing Global System for Mobile communications handsets from all manufacturers.
In September, Sonera, EDS and Gemplus established Radicchio, an organization that now has 48 members, to promote wireless e-commerce with PKI as the common security platform. The Wireless Application Protocol standard-setting process is adopting SmartTrust security standards.
Sonera SmartTrust will charge system license and transaction fees, although Relander said he envisions potential problems with this arrangement down the road.
“In Zed and SmartTrust, we see all operators as potential customers, but in the long run this may not work because we could end up giving our best services to our competitors,” he said.
Sonera Zed, launched in mid-1999, is a network independent wireless Internet portal using WAP and short message service.
“The key to success is local content because that’s what people are willing to pay for in a mobile handset,” Relander said.
Besides Sonera itself, six other wireless carriers have signed up for Zed service, “and more are in the pipeline.” The six include Powertel Inc.; Turkcell, of which Sonera is part owner; Hutchison Telecom of Germany; KPN; Libertel in The Netherlands; and Smart Communications in the Philippines.
