Operators paid the price for hyping Wap, but there is still money
in m-commerce.
Steve RogersonOne would be hard pressed to pick a worse harbinger for a new
era in technology than Wap. As the mobile operators screamed
"Internet on your handsets", what the users ended up with was a
small screen giving limited pages very slowly, that is if they
could make a connection at all. Yet from these humble beginnings,
Wap is seen by industry pundits as the forerunner for the explosion
of m-commerce.
The apparent paradox comes from the decision to launch a service
before the technology was ready and then hype up people's
expectations to a level where they were certain to be dashed, and
dashed heavily. Some mobile operators already realise that mistakes
were made in Wap's early days.
"If you read the media coverage, you might think Wap is
useless," said One2One spokesman Mark Hiley. "But there was a lot
of hype with Wap. Many expectations were raised too high. You can't
get the same Internet experience on your phone as on a PC."
As to the technology, that is about to change as the operators
roll out their packet switched networks next year. Known as GPRS
(General Packet Radio Services), these networks use the same basic
infrastructure as the existing GSM (Global System for Mobile
Communication) but can offer massive increases in speed. And there
will be virtually no log-on time - the phone is always on and
connected to the network.
Of the UK's four operators, BT Cellnet has got the early lead,
with a limited GPRS service available to business users today, but
the other three are set to be there within the first half of
2001.
This will be followed soon after with UMTS (Universal Mobile
Telephone System), the so-called 3G, or third generation, mobile
system that caused such a furore in the telecoms industry when the
auction for the five licences spiralled out of control.
Although initial predictions were for this to be launched in
early 2002, the operators are now looking at late 2002 at the
earliest, with 2003 being the most likely.
Operators are also being a tad cagey about exactly what speeds
will be available with GPRS and UMTS - both depend on the number of
users sharing the bandwidth simultaneously - but they will provide
speeds that could rival typical fixed links today. It is this speed
that opens up new applications and the opportunity for trading over
mobile phones, otherwise know as m-commerce.
Ian Harwood, business alliance manager at Vodafone, defined
m-commerce as "a commercial transaction in the wireless world over
and above just ringing up and ordering something".
To capitalise on this, mobile operators and banks are already
rushing into bed with each other. One of the most recent and
probably the most significant marriages was between Barclays and
Vodafone, which promises to offer mobile Internet banking,
stockbroking and Barclaycard account management services on Wap
phones by the end of the year.
The end of the year is significant, as Steve Walker, UMTS
marketing director for Ericsson, explained. "By then, we will have
Wap v1.2.1, which will provide end-to-end security to support
m-commerce applications. At the beginning of next year, we will
have GPRS, which is a lot more suitable for the bursts of
information you get with m-commerce. The technology enablers are
starting to fall into place."
The problem today, he said, was that the market was not yet
ready for m-commerce.
Mobile banking
"As banks and traders get their hands on the technology, they
will push the applications into the market. But the pull in the
market doesn't exist yet. People have lived without mobile banking,
but, when they see the benefit, there will be the pull," said
Walker.
It will not replace going to see the bank manager, and many will
still regulate their bank accounts on desktop computers, but it
will let them make quick checks on their balance and make purchases
in a similar way to what people are doing on the Internet today.
And then there's the cinema.
The name of the person who first came up with the idea of a
cinema application for high-speed mobile phones is probably lost in
history, but it is the application that all the operators and the
equipment providers have jumped on as best illustrating the
technology's potential.
The story goes like this. A punter wants to go to the cinema but
doesn't know what to see. So they accesses the cinema's Wap site
from a mobile phone and get a list of films and times. If still
unsure, trailers of films can be downloaded to the handset -
something that in theory can be done in seconds with UMTS.
Once the film has been picked, the movie goer sees a map of free
seats, picks one and buys the ticket over the phone on the way to
the cinema. Once there, there is no queuing to pick up the ticket
as a wireless link, using Bluetooth or some similar technology,
recognises the mobile phone and allows access.
Location services
Another technology enabler will be location services. This is
where the network can pinpoint mobile users more accurately than
just by the cell they are in. Some use signal strengths and angles
from multiple cells, others GPS (Global Positioning System). The
driving force behind developing such technology has been US legal
requirements for the emergency and police service, but business has
been quick to see the potential.
Possible applications include finding the nearest cash machine
or lists of local restaurants, cinemas, hotels, taxis and so on.
This has obvious advertising revenue potential for the operator.
There is even talk of subsidised phone bills for those willing to
hear an advert every time they make a call.
Also being developed are vending machines with a phone number on
the front. Rather than inserting money, a customer calls the
number, orders the can of drink or packet of cigarettes, the
machine then delivers the goods and the money is added onto the
phone bill or deducted from the prepaid voucher.
Theft
However, this brings with it security problems. Mobile phones
are very easy to steal because of they way they are used - as they
have to be retrieved from a pocket or bag quickly and easily when
they ring, a thief can do the same.
If a phone has the ability to make serious purchases, users
won't want to key in credit card numbers each time they buy, so
these have to be stored either in the phone or on the network. This
would make phones even more attractive to steal.
Operators are working on digital signatures and other security
measures to verify access. And they know that if they don't they
could face a marketing disaster just as bad as the Wap one they are
now trying to recover from.