The realm of wireless data is uncharted territory for most consumers, but carriers also are feeling their way through the darkness, searching for the best way to market data and Internet services to an audience with little or no knowledge of wireless outside voice.
Everyone-from the manufacturer to the end user-started with a clean slate when wireless data applications came about several years ago. With no precedent to follow, Sprint PCS finally took the leap in September and became the first major carrier to launch a campaign to introduce the wireless Web to the general public. Other carriers soon followed, each trying to emphasize the added benefits-and revenues-wireless data applications could foster.
“They’re (carriers) trying to focus on different services, services that they think will be appealing. One of the things they’re all still touting is speed, that speed is coming. They’re all selling futures on speed,” said Hunt Eggleston, president of Technology Trends Inc. in San Diego.
Current data rates hover around 14.4 kilobits per second, with the possibility of 144 kbps just over the horizon. That puts carriers in the position of not only having to sell what they have but-because of wireless data’s novelty-promise an improved product in the future.
According to The Yankee Group in Boston, out of Verizon Wireless’ 25 million customers, only about 2 million have Internet-enabled phones. To an extent, these customers expect a similar user experience on their Internet-enabled phone as they do on their home computer, and that includes having adequate data rates-which go hand-in-hand with the arrival of third-generation technology-and easy access to content.
That’s where a lot of carriers are having a problem, said Andrew Seybold, wireless industry expert and editor-in-chief of “The Outlook,” a wireless communications publication. Seybold noted current Internet-enabled phones in the United States have too many menus to scroll through, and like Eggleston, he believes carriers still are struggling to accurately target content.
“Carriers are not delivering the right content. It’s the wired Web re-purposed in WAP. All the sites for i-mode (in Japan) are specifically written for phones, but here the attitude seems to be to write something in WAP … and most of what is available is useless,” Seybold said.
United Kingdom-based research firm Ovum said the window of opportunity is quickly closing on WAP, and if carriers wish to take advantage of the technology and get data applications in the marketplace, they need to act fast.
“WAP was never meant to be the `be-all and end-all’ of the mobile Internet. It will give way gracefully to more sophisticated technologies as and when mobile network improvements allow,” said Michele Mackenzie, Ovum analyst and lead author of the report, “WAP Market Strategies.”
BT Cellnet in the U.K. is learning this lesson the hard way. Despite an aggressive advertising campaign and a reduction in handset prices, the company reported only 175,000 of the 670,000 customers that signed up for service in April and June bought Web-enabled phones. At the beginning of the year, BT Cellnet forecasted about 500,000 WAP handsets would be sold in the U.K.
Mackenzie, Eggleston, Seybold and the carriers themselves all recognize the importance of delivering applicable and interesting content. The major carriers are entering co-marketing agreements with content providers at a dizzying pace, hoping to bring useful content to the table, as well as tap into other companies’ customer bases.
“Carriers are trying to find relationships with others and offload the difficult thought process. … They’re having co-marketing agreements because others in the marketplace may have more creativity than some of the larger wireless carriers” when it comes to selling wireless users on this new service, Eggleston said.
Some of the companies providing content to carriers include Fidelity Investments, to conduct online trades; Fox Sports, to provide statistics and the latest sports scores; and MapBlast, which provides point-to-point driving directions.
Before carriers ever announced content, however, they took steps to prepare consumers. Some of Sprint PCS’ first television commercials for its Wireless Web service were more like a pitch for a “coming attraction” than for the service itself. Getting consumers used to the idea of having data access on their wireless phone was just as important as getting them to buy it, said Eggleston. Now we will see carriers pushing content and customer additions.
AT&T Wireless Services Inc. launched its PocketNet service in May. The company is focusing on attracting early-adopters, or those who have extensive knowledge of both wireless and Internet technology and who are looking to upgrade to a mobile data service, said AT&T Wireless Spokesman Ritch Blasi.
According to The Yankee Group, PocketNet is a competitive offering in terms of price, content and usability, but unlike Sprint PCS, Verizon Wireless and other subscribers with Internet-enabled phones that operate on CDMA and GSM networks, AT&T Wireless’ TDMA customers have to purchase a special quad-mode handset costing between $100 and $200. The handset operates on analog, TDMA 800 MHz and 1900 MHz, and CDPD networks.
This means the decision to use the wireless Web has to be “a conscious customer decision at the point of handset purchase,” The Yankee Group said, which adds to the difficulty of marketing a product and service that people don’t even know if they want or need yet.
One way carriers are addressing the problem of too much information too soon is by providing a “walled garden” of Web sites. AT&T Wireless users are offered free access to 40 pre-selected wireless Internet sites, and Verizon Wireless offers a similar service. Users pay an additional fee per month for access to e-mail and unlimited Web sites.
Free access may just be the carrot that leads consumers to the wireless Web, said The Yankee Group, which forecasts approximately 50 million U.S. wireless data subscribers by 2005. Those who experience increased efficiency and therefore attribute more value to the service most likely will look to upgrade to paid premium services.
Steadily increasing subscriber numbers and faster, more user-friendly technology bodes well for carriers that now have another weapon against churn. It does, however, add yet another factor in the race to stay on top of subscriber demands while maintaining a reasonable revenue share with content providers.
