FOCUS >
Mobile looks for new angles
Written by: John Letzing

As the wireless telecom market nears saturation, mobile operators are struggling to divine what services will successfully carry the industry into its next phase.

LATELY, IT'S BEEN difficult to avoid exposure to advertising related to multimedia messaging (MMS). Due to the rabid appetite for SMS messaging - analysts estimate that globally, users send tens of billions of SMS messages per month - operators have naturally been drawn to the idea of bulking up an already proven revenue source. Eurotel (ubiquitous mermaids) and T-Mobile (ubiquitous married tennis stars) launched their MMS services in the Czech Republic, which enable the sending of images and sound along with text, with much fanfare in late August.
Hardware producers are also doing their bit to push the new technology. Nokia has a dramatic six-minute video clip it shows to journalists that hypes MMS with an almost religious fervor, likening its invention to that of the television and radio. "There's no way back once you start sending pictures," says Nokia's business development manager, Karel Holub, and operators certainly would like to believe as much. Increased MMS use would mean a big jump in revenues from mobile data, currently used almost exclusively by a small number of business clients. MMS "gives operators a chance to use their GPRS (mobile data) infrastructure on the mass market," says Sony Ericsson's general manager for the Czech Republic, Jan Semrád. T-Mobile now brings in roughly 18% of its revenues through non-voice services, including data. The bulk of that 18% is, according to T-Mobile spokesman Jiří Hájek, "unfortunately" now made up mostly of SMS messaging. Eurotel reports similar numbers. Both predict a higher percentage in the future, thanks in no small part to MMS-driven data usage. "A lot of people are wondering about this, and there are a lot of projections," says Eurotel's chief commercial officer, Garrison Macri. "We certainly see our percentage of revenue from value-added services growing. Whether that will get up to forty or fifty percent, I don't know."

K. Holub	Photo: P. Poliak

So far, MMS entry on the market seems stunted, and somewhat out of step with the dramatic advertising push accompanying it. "The hope is, we'll create a need and demand, and then we'll go from there," says Garrison Macri, explaining the logic behind the heavy marketing. Macri was recently brought to Eurotel from British Telecom to help make sure that MMS doesn't go the way of other GSM technology initiatives, a` la WAP, which sounded good in theory but provided little in terms of practical applications. Both Eurotel and T-Mobile claim to have current users of MMS that number in the thousands. For Eurotel, says spokesman Jan Kučmáš, most users came on board during the first week of availability, climbing swiftly to one thousand, but have since leveled off sharply. "What we're finding is people wish there were more people to send pictures to," says Macri, who is nevertheless confident that educating the public now about MMS is the best way to enable its viability in the future.

Others are more skeptical about the motives of Eurotel and T-Mobile. Says Michael Blauer, Oskar's manager of interactive and content services: "I would submit that the two companies have essentially been engaging in a PR game, and trying to beat each other at it. We feel such an approach is more a mere stunt than reflecting an offer that is fully tested and verified." Blauer explains that Oskar, which does not presently offer MMS services, is waiting until MMS handsets, content and services are more widely available. There is simply not enough suitable content yet, remarks Blauer, to make MMS feasible. While there are currently very few MMS capable phones now on the market, most of which are considerably expensive (ranging from 12 to 20 thousand crowns), new and cheaper models are soon to come. Also on the way, say operators, are heightened services. Jan Kučmáš points out that Eurotel has begun offering packages of pushed data for MMS on a monthly basis. Receiving weather reports daily, for example, costs CZK 95 monthly. Other packages can get as high as CZK 500 per month. Customers may be attracted to having information and entertainment so close at hand. And of course adult entertainment, which has more than proven its economic viability on the web, will feature prominently. But the question remains whether people will be willing to pay up. "Really, I don't have faith in the viability of news sent through MMS," says Patrick Zandl, editor at internet server Mobil.cz. "For what do you need a political story on a MMS phone, which is three times higher than the price of a regular newspaper? You're in such a hurry to know that Mr. Špidla has said something in Parliament? I doubt it."

	Garrison Macri	Photo: V&V

Of course, operators are busily expanding available content so as to differentiate it from other media. In doing so, they are tapping a broad number of prospective partners for revenue-sharing deals, and creating a large amount of new business opportunities. Kučmáš says that Eurotel now has 8 to 10 content partners, and is "negotiating for 3 to 5 times more." New content partners for MMS will come from a broad variety of disciplines, says T-Mobile's Jiří Hájek, including "those providing Java for applications, and also media houses and film studios."
Current MMS models like the Nokia 7650, which has an internal digital camera, are akin to driving a luxury automobile, replete with all of the options. But it's not likely that phones of a similar caliber, and that convey a similarly pleasing experience, will be affordable any time soon. "It's nice to send MMS with the camera and a picture of your children to your grandmother," says Mobil.cz's Zandl. "But you'll need to wait a few years at least before grandma has a phone capable of supporting MMS."

Creating greater options
MMS, despite media blitzes of late, is not the only new avenue that wireless firms are exploring. Mobile data has other applications, including mobile office applications, and T-Mobile recently launched its own PDA to better take advantage of mobile internet. The palmtop features customized versions of some of the most popular local web sites, including Seznam.cz. The operator, a prime advocate of GPRS locally, is counting on its new 'GPRSpeed' service, which compresses data for faster transmission, to help boost interest - 'GPRSpeed' has already proven a success for T-Mobile's Austrian operation. Handset purchases, however, remain a barrier. "It took some years just to encourage companies to start buying these (GPRS) phones, but for private individuals, investing six thousand crowns is something they'd prefer to put off for a few years," says T-Mobile's Hájek.
The increasing availability of Java-enabled phones may succeed in creating fresh opportunities. WAP and SMS-based games, such as Eurotel's "Who Wants to Be a Millionaire" have been fairly successful on their own terms (Eurotel's Kučmáš pegs the number of games subscribers now at between 20 and 40 thousand), but Java technology no doubt greatly enhances the experience. "I find that games are more important for the GMS industry than MMS," says Mobil.cz's Patrick Zandl. "There are games on the market based on WAP, but Java-based games are better, because they are really more dynamic." T-Mobile now offers the direct downloading of games, at roughly CZK 30 each, and as more Java-enabled handsets hit the market, the other two operators plan to follow suit. "Games will be quite huge," predicts Nokia's Karel Holub. "Every businessman is a game-player after 6pm."
M-Commerce, long-touted but rarely used, is showing some promise of late, though in limited ways. Eurotel recently launched a service whereby users can directly purchase cinema tickets. Kučmáš claims that by the time the application was only a few weeks old, it had garnered nearly 40 thousand users. T-Mobile has been experimenting with a pair of M-Commerce initiatives, enabling users to purchase both car washes and cans of Coca-Cola with a few buttons pushed on their mobile phones. These initiatives, however, are yet to make much of a splash. Reflecting on the prominence of the Coke-buying application in the overall business plan, T-Mobile's Jiří Hájek says that some 50 Coke machines now are capable of facilitating M-purchase. But their strategic importance lies not in a tangible revenue model, but in the fact that they offer a preview of things to come.

Woman seeking Eurotel's Garrison Macri says of MMS: "the key indicator on the commercial side is that a lot of young people want to do it for fun." But teenagers swapping shots of beer parties may have limited potential. Development firm Et Netera has been exploring one area where MMS could dramatically affect a more traditional business: singles ads. For the past year and a half, says Martin Holečko, Et Netera's marketing manager, Annonce (classified listings service) has been developing its ability to accept ad placement via SMS message: an ad is sent, edited in a back office, and placed in the paper in a matter of days. According to Holečko, the Annonce SMS service has proven wildly popular, numbering in the "thousands per day" and surpassing those submitted via the web site. Mobile operators like the service for the traffic it creates, and Annonce appreciates the added business. Naturally, there is one area in particular where the jump from SMS to MMS could bring a dramatic surge in interest: personals. "MMS has great potential for placing ads, especially personals - that could really be something," says Holečko. Who wouldn't appreciate a digital glimpse of self-proclaimed lonely but attractive people before submitting an inquiry? Until MMS phones are more readily available, however, this isn't likely to happen. Holečko speculates that MMS-relayed singles ads are at least a half year away.