Mobile Internet - any place, any time, everything

by David Kelleher

Telecommunications survival in the wireless future will depend on business-to-business m-commerce according to global business strategists, KPMG, and Malta's telcos will have to follow suit as well or fail.

KPMG's Global Communications Industry Group chairman, Roger Amos, warned telcos not to be swept away with their own excitement about the new technology. "At the moment, telcos are competing fiercely for new spectrum licences. The 3G tenders in the UK have seen extraordinary competition and prices. We expect the same in Europe. They know they have to be in m-commerce to survive. But it is no good just concentrating on securing the technology,' Mr Amos said.

"In the m-commerce future, the lion's share of revenue will go to content and service providers. Telecommunications operators who have been getting up to 95 per cent of the revenue base will find their share dropping to 25 per cent," Mr Amos said. KPMG's Malta Telecommunications specialist, David Bamber, said at the moment Maltese telecommunications services providers are every bit as enthusiastic about consumer applications such as news and weather information, stock market updates and personal banking transactions on cell phone screens as their overseas counterparts. This particularly in the light of the bill published recently aimed at the imminent removal of all telecommunications related monopolies in Malta.

"And there is no doubt this will be where the first wave of customers will come from as both consumers and telecoms service providers explore the possibilities of Mobile Internet access. But business-to-business applications (B2B) are the true purpose and the future drivers of m-commerce," Mr Bamber said. "The survivors will be the first businesses to see what lies behind the hype," he added.

The global business strategists, in the white paper entitled Mobile Internet - "Any place, any time, everything" examine the pros and cons behind the creation of the "New World Wireless Operator".

"We are witnessing the collision of the world's two fastest growing sectors - mobile technology and the Internet - creating an opportunity that no organisation can afford to ignore. The revolution is called the Mobile Internet and the impact it will have on telcos, ISPs and any organisation wishing to transact in the new world economy will be immense," the White Paper states.

It adds that the new world economy will see the mobile phone move away from solely a telephony device, towards that of a unique 'Personal Identifier and Assistant'. Besides a new role will emerge for telecommunication companies - that of the wireless portal. "It is only a matter of time before everyone and everything becomes 'connected'," the White Paper states, adding that, "within three years, there will be more wireless connections to the Internet than fixed, and the majority of e-commerce transactions will terminate or originate on a wireless device.

"Mobile usage is already enjoying a substantial increase across the globe, with mobile phone connections outstripping fixed lines in some European countries. This presents a host of opportunities across the board for those operators who seize the change now, and a threat for those who do not.

Accordingly delivering Mobile Internet services will be a radical departure from anything traditional operators have done before and not all will successfully make the transition. The scope of change required is considerable as both existing revenue and cost models become redundant. The market for mobile e-commerce (or m-commerce) in Europe alone is estimated to be worth euro23bn, compared with a mere euro323m in 1999. To succeed, telecommunications operators must:

re-focus their corporate vision towards the new world of data-centric services;

ensure customer management and service provision become key differentiators;

formulate new business models to incorporate a wider range of third party relationships;

implement technology investments in shorter time scales;

develop application development cycles that generate more innovative and flexible solutions; and

adapt operational resources and infrastructure to achieve necessary cost efficiencies.

The White Paper goes on to state that success in the Mobile Internet new economy, means getting to market quickly, armed with the right applications and the right services. However, telecommunications operators will need to do this with partners.

"They must develop new ways to address their relationships with customers, vendors, application developers, content and service providers. This includes entering risk sharing arrangements with equipment vendors and application developers, and opportunity sharing arrangements with information and content providers," the White Paper states.

The first markets will be in Mobile Professional Applications - unchaining people from their desktops. Within three years, most laptops will come equipped with a Mobile Internet (or intranet) capability allowing service/ knowledge workers to assess corporate email, knowledge and resource management systems remotely.

As a result, the distribution of value in the value chain will rapidly shift. In the old world, 70 per cent of the value remained with the telco; in the new world, 75 per cent of the value will belong to content providers, content creators and service providers. Few, if any, telcos can make the transition from old world voice products to new world Mobile Internet services without a partner - to share risk, maximise opportunity and minimise time to revenue.

"Many of the challenges facing the new world operators remain unknown - those who succeed in the longer term will be those businesses dedicated to creating a customer centric orientation.

"Their Mobile Internet customers will be more demanding. They will want personalised service to meet their individual wants and needs and will no longer be satisfied with being part of a mass market.

"Survival and growth in the m-commerce world therefore will depend on how well telcos can harness the resources of many, to deliver to the new customer of one," it adds.

Of current mobile traffic volume, three per cent of second generation mobile phones already offer basic data services. By 2003, more consumers will access the web via mobile phones than by PCs.

Currently, several European countries have more mobile phones than fixed lines.

In Finland, eight per cent of mobile traffic is non-voice.

Existing technology now being deployed provides bandwidth far in excess of those offered on today's telephone networks. Currently, data amounts to over 50 per cent of traffic on these networks.

The market for m-commerce in Europe alone is estimated to

be worth euro23bn by 2003, compared with a mere euro300m in 1998. Looking to the future the success of the Mobile Internet appears set to continue.

The popularity of wireless devices for voice communications and the subsequent substitution of fixed phones will accelerate the adoption of broadband mobile services.

In the next decade, the number of mobile users is predicted to quadruple at the same time as voice usage will triple.

Mobile Internet-enabled laptops will free people from their desks

creating mobile offices, mobile application hosting and mobile e-commerce, or 'm-commerce'.