Early expectations of the wireless Internet sweeping the country have suffered the realities of the limitations the service offers in comparison to the wired Web. While the number of wirelessly enabled sites grows daily, the lack of access and content these sites provide has left many in the industry questioning their predictions on the wireless Internet.
“Perhaps the only disappointment amongst our views during 2000 was the failure of widespread wireless data services to emerge in 2000,” said Deutsche Bank in a recent wireless report.
While Sprint PCS recently announced it hit 1 million mobile users nationwide, the news was tempered by questions as to how many of those users are actual subscribers and how many are occasional wireless Internet surfers. However, the company met its forecast of 10-percent penetration of its customer base by the end of 2000.
Slow uptake
Cingular Wireless, formerly BellSouth Wireless Data, noted it ended 2000 with 570,000 subscribers to its Cingular Interactive Intelligent Wireless Network, compared with 200,000 subscribers at the end of 1999.
Both are solid numbers, but far less than what experts had expected from wireless data. The Yankee Group recently estimated a huge jump in U.S. wireless data users via mobile phones, from just more than 2 million at the end of 2000 to at least 26 million using wireless data services by 2003.
“We were expecting wireless data to excel like Europe and Japan,” said wireless analyst WitSoundView in a report. “Yet when revenue generating usage results were posted over the last two quarters, we have been disappointed based on device features and functionality, consumer usage, surveys and pricing.”
Part of the miscalculation on the uptake of the wireless Web has to do with models based on the wired Internet. Unfortunately, comparing the wireless Internet to the wired version has turned into a poor comparison. The wealth of information available from the wired Web, and the graphic-intensive nature of that delivery, has left many users seeing the wireless Internet as a light version of the real thing.
“A good analogy between the wired and wireless Internet is the difference between a department store and a convenience store,” WitSoundView explained.
Some of the wireless Internet’s shortcomings include the lack of easy input of information due to cell-phone number pads, lack of screen size to display information and the slow speed in which wireless connections are currently made.
Walls
Another shortcoming for users accessing the wireless Web via wireless carriers’ services is the use of a modified “walled garden” model for information access. This model attempts to steer users to a select number of sites on the carrier’s service. While carriers don’t disclose the nature of their arrangements, many of the sites chosen to be part of the garden often have made financial arrangements with the carrier for such preferential treatment. America Online was rumored to have paid Sprint PCS $50 million for top billing on subscribers’ screens.
The modified portion of the model allows users access to sites not bookmarked by the carrier by inputting the universal resource locator address through the keypad on their phone.
Carriers defend this tactic by noting they are trying to protect their customers from having a dissatisfying Internet experience.
“[Wireless Web sites] have to work really well,” said Jeffrey Nelson, executive director of corporate communications for Verizon Wireless. “We don’t want frustrated customers at the end of the day. They are still our customers.”
While most carriers offer the modified walled-garden model-including Verizon Wireless, Sprint PCS, Nextel Communications Inc. and Cingular Wireless-AT&T Wireless Services Inc. offers subscribers to its Digital PocketNet service a choice of walled-garden models. AT&T offers customers a strict walled-garden selection of wireless Internet sites for free, the only operator to offer free wireless Internet access. For an additional charge per month, user can access a modified walled-garden model similar to other carriers.
While analysts are giving carriers the benefit of the doubt in regard to taking care of their customers, some expect carriers will have to break down the walls if the wireless Internet is to take flight.
“The customer will soon demand full access to the wireless Internet,” said Fred Fosnacht, North American m-commerce managing partner at Accenture Communications, formerly Andersen Consulting. “Consumers are used to the wired Internet and expect that same experience when mobile.”
Fosnacht noted that carriers are reluctant to offer additional wireless Internet services because they would need to back them up with additional technical support. That support costs money.
“Currently carriers are selling simple products with simple support,” said Fosnacht. “What we are talking about for the future is a complex product with complex support.”
Even though the wireless Internet has not met early expectations on its growth, most people in the wireless industry are still bullish on its potential.
“As we move through 2001 and packet-based technologies and handsets begin to be deployed, we suspect that there is the opportunity for companies to begin to show positive momentum from the deployment of packet-based wireless Internet/data services,” said Deutsche Bank.
