Why are Nordic countries ahead in all things mobile? The take-up of
Wap and SMS has ignited an already technology-savvy population.
Alison Classe finds out why
Why has mobile technology taken off in Nordic countries? It's easy
to speculate. The sparse population makes telecommunications a
necessity, although mobile technology is also popular in the
densely populated areas. The ground is frozen for most of the year
so the economics of mobile technology look more attractive compared
with the costs of laying cables underground. The relative affluence
of the population means that they have money to spend on
technology.
There are also more intangible reasons. Diego MacKee, director of
sales and marketing for ISP Nextra in Norway, says, "The lifestyle
here is very different from elsewhere in Europe, including the UK.
Work doesn't stop you from having a private life here and that
private life is respected. It's quite acceptable for the managing
director to leave at 4pm and go home to his or her family and all
women here work.
"The attitude is that you should be available whenever you're
needed, but not necessarily physically present," MacKee adds.
Whether they are a cause or an effect of the rise of mobile
technology, these attitudes to work undoubtedly boost demand.
Espen Andersen is associate professor of strategy at the Norwegian
School of Management and is European research director with the
Concours Group. He says, "One reason is that the standards were
developed here: NMT, which came before GSM, was a co-operative
development between Nordic countries."
But Andersen believes that standards may have been a result rather
than a cause of the popularity of mobile communications in Europe
and in Scandinavia in particular.
"In the US, every company has an 800 number and voicemail, there
are banks of phones everywhere and local calls are free. In Europe,
we didn't have that. And when you got a mobile phone in Scandinavia
you hitched on to a falling price curve, you got voicemail plus
innovations like call forwarding. You got additional utility with
your mobile phone," says Andersen.
Perhaps it is because the Scandinavians feel a sense of personal
interest in this technology that their countrymen have done so much
to develop.
Sean Willis is general manager of the Mobile Commerce World team
with Terrapinn, which has shows coming up in London and Stockholm
in the autumn. He says, "It's hard to put into specifics, but the
Swedish event is more trendy and funky. The technology receives a
lot of attention from the government and positive attention in the
press: it's seen as sexy and interesting. The concentration of
wireless-related companies in Stockholm creates a buzz that spreads
throughout the region, like Silicon Valley but with more positive
take-up."
The sense of pride in the Nordic countries achievement should not
be overstated, believes Nokia mobile phones communication manager
Pekka Isosomppi.
"I do have a pride in Nordic things and the tradition of plain and
functional design, but I wouldn't hesitate to buy a different
product if it was better. While I'd like to think our handsets
follow Scandinavian design principles, it's now a global design
that is done in many countries," Isosomppi explains. The fact that
these countries are relatively small has fostered productive
co-operation and also productive rivalry, believes Lars Persson,
chief executive officer of CellPoint Systems, a specialist in
location-based services. "The co-operation between Ericsson and
Telia has helped both of them, and the competition between Nokia
and Ericsson has also been fruitful," Persson says.
He and others also mention the superior quality of mobile service
in Nordic countries as having encouraged take-up.
Internet
penetration
Take-up of the Internet has also been fast. Once again there are
folkloric explanations connected with the need to while away long
winter evenings. Less picturesque explanations include government
intervention.
Stefan Fleron, UK chief executive officer of Swedish wireless
Internet consultancy AU-System, says, "Governments have given
subsidies and tax reductions to encourage people to buy PCs, often
through their employers, with the aim of encouraging everyone to
own a computer and access the Internet."
There are also housing and commercial accommodation developments
where the municipality has encouraged the builders to provide high
bandwidth communication links.
"The view was that if we could get people used to the technology
early on, we would give the industry an advantage," says Fleron.
It is the combination of Internet penetration with the prevalence
of mobile communications that positions the Nordic countries
uniquely for m-commerce, he argues. Already, his company has
implemented a fully-fledged Wap-based banking application for one
bank, as well as a mobile stock trading system. "Scandinavia is
probably one to two years ahead of the UK in mobile banking, though
South East Asia also made a very early start," Fleron explains.
M-commerce take-up
However, it is possible to exaggerate the extent to which users in
Nordic countries are ahead. Many commentators emphasise that the
real lead is elsewhere. MacKee says, "Performing transactions via
mobile technology is largely in the future; where Scandinavia is
ahead is in the use of mobile communications." He adds that while
Scandinavia's fixed Internet usage is the highest in Europe, it is
not widely used for e-commerce, with the possible exception of
Sweden. "And what's more of a concern to me than that is that it's
not used between businesses, in the supply chain, to the extent
that it is in the UK or Italy."
Andersen agrees that corporate use of mobile technology is limited.
"With our recent research on the use of m-commerce, we expected to
find that Europe was leading, but when it comes to corporate use we
found that the US was ahead. In Europe, it tends to be an
individual thing - few organisations have adopted it company-wide,
either internally or to address their customers."
However, research by Cap Gemini Ernst & Young in Sweden showed
a healthy take-up of mobile communications for information
distribution purposes. Stockholm-based Michael Welin-Berger, the
company's mobile business director, believes that disillusionment
with Wap in Nordic countries is fostering an interest in personal
digital assistant (PDA)-based mobile applications.
"The interest in Wap a year ago was that much stronger in
Scandinavia and people were expecting to use it by now, so they are
quicker to adapt to the PDA opportunity. I also think that
companies here are less hierarchical - if an employee here has a
reason for needing a PDA, their company will probably buy them one
straight away," says Welin-Berger.
What application are we talking about here?
"There's a strong interest in connecting the mobile workforce to
corporate systems like enterprise resource planning and customer
relationship management via PDAs. They can be used primarily
offline, so a salesperson can go into a meeting with the product
details plus the inventory levels that were current when they left
the office. Only if the customer decides to place an immediate
order do you need to go online via your GSM phone," he adds.
Nick Hunn is managing director of TDK Systems, a company which
focuses on bridging the gap between telecoms and computing with
products such as PC cards for connecting phones and computers.
He says, "What's surprising is the extent to which the roll-out of
GSM in Scandinavia, as elsewhere, has been driven more by lifestyle
than by business. SMS is a classic example - it existed for a good
eight years before teenagers picked it up."
A coherent model
We have all heard about the drinks vending machines where those
without any change can buy via SMS and have the cost billed to
their mobile phone account, but Hunn says, "Translating those
isolated good ideas into a proper business model is the difficult
part. The question of phone operators turning into banks is a
hurdle that has to be tackled before we can use this model for
major purchases."
There are initiatives designed to help us over this hurdle. One is
EHPT, a joint venture between Ericsson and HP which has developed
Jalda, an Internet payment mechanism. EHPT's marketing director for
Internet payments systems Patrik Attemark sees Jalda as a response
to telecoms firms' desire to charge for content and the need to buy
and sell products over the air.
"Operators like Telia have been thinking of charging for
third-party content for a number of years," says Attemark. But he
confirms that most operators are still deliberating about this
question of whether - and how - they want to become payment service
providers, or whether they should work with banks."
Once the operators get their act together, Attemark believes that
mobile users will be receptive to paying for services.
"You already pay for services on your mobile in a way that you
don't on the Internet," says Attemark. And he expects to see people
choosing their operator predominantly according to services and
lifestyle considerations, rather than by technologies.
Nokia is involved in electronic mobile payment services, an
initiative designed to make the mobile phone function as an
electronic wallet offering a choice of payment mechanisms.
The system is being piloted with Nether-lands bank KPN, but
Isosomppi says, "Scandinavia has an advantage here both because of
the high mobile phone penetration and because of the tradition of
electronic banking, which has been popular since well before the
Internet. Our banks have the infrastructure and the customers are
keen to use it. But for something like this to work it has to be
done globally, just as credit cards had to work globally to
succeed."
Slow take-up of Wap
In Scandinavia as elsewhere, Wap applications are not, in general,
taking off at the rate some people would like. As elsewhere, the
advent of general packet radio services is expected to improve
matters and so is the emergence of a better user interface and
better terminals, but Mika Uusitalo, vice-president of wireless
Internet company Tahoe Networks, suggests an additional reason for
the slow uptake in Scandinavia.
"Some operators have adopted a closed model for content and
applications, so that they are inside a walled garden and only
available to users of that particular service. It's hard to make
that model work, where operators are content providers competing
with other content providers," Uusitalo says.
Users do not want to have content limited by the service they use,
any more than they want to use a single ISP's content on the
Internet.
Andersen believes that the Wap model is wrong for Europe. "Japanese
people who spend two or three hours a day standing on the subway
may have time to surf on their mobile phone, but we don't. We want
information sent to us when we need it, which is why SMS works
well," he says.
Some people argue that Wap is a useful medium for accessing e-mail.
Erlend Stefansson, director of marketing at messaging specialist
TTYL, says, "I've had Wap for 18 months and after the first week I
didn't use it. But now I can access my e-mail on it I use it 20
times a week."
He notes that Norwegian state telecoms company Telenor is pushing a
Wap portal, www.djuice.com, aiming perhaps particularly at teenage
users. "They're positioning it for when UMTS comes along, believing
that if they already have a brand they will have a huge competitive
advantage."
Pioneering firms
To start-ups in the m-commerce and
mobile Internet world, Scandinavia offers a hospitable environment.
It's not just that the founders are Scandinavian themselves,
although they often seem to be.
"A lot of things are happening here and there are a lot of
companies, both large and small, working in the mobile
communications area. Scandinavia was a natural choice for our
European operations," says Uusitalo.
The presence of Nokia and Ericsson and their interest in fostering
complementary businesses, has led to a proliferation of smaller
satellites.
"There are development powerhouses around both of these companies,"
says Hunn. "Both are constantly spawning or fostering new and
innovative companies, many of which soon disappear, but even so
they leave a lot of ideas behind them." Persson notes that a good
deal of venture capital goes into these start-ups - perhaps a more
productive investment than the UK's dotcom gold rush.
Scandinavian telecoms providers are accustomed to being used as a
test market by the local technology suppliers, and are therefore a
bit ahead of their counterparts in other countries, Attemark
suggests. "Because Sweden only has nine million people, it is a
good environment for trying things out. And if something works
here, it can easily be transplanted to other parts of Europe."
The world's laboratory
There is certainly a will in Scandinavia, as elsewhere, to make
m-commerce take off. Not only are telecoms firms keen to recoup
their investment in 3G licences through new revenue streams;
Scandinavian handset manufacturers see it as a way to maintain
their position.
"Electronic calculators went from large and expensive items to
something you could give away free with a packet of corn flakes.
The same thing could happen to phones, which is why people are
desperate to add Wap and so on - it's as a way of keeping new
entrants out. But it does all rely on the belief that there's a way
to extract revenue from m-commerce - if not, the whole thing falls
over," says Hunn.
For Scandinavian m-commerce firms, Nordic countries may be their
laboratory and launchpad, but their target market is global. Sonera
Zed, a subsidiary of the Finnish telecoms provider, unveiled its
Zed for Business service in the UK just a couple of months after it
was launched in Finland. The service allows small and medium-sized
enterprises to give employees access to corporate applications and
basic services such as e-mail and calendar from a Wap phone.
Channel director Justin Clarke says, "The take-up of mobile
technology in Finland makes it a good market for mobile Internet
applications, but the UK is a much larger one, if in some ways a
more challenging one for us."
In the brave new world of m-commerce, the pattern looks set to
continue. Scandinavians are to a large extent developing the
technology and then kindly trying out the technology for us. But if
they like it, we'll be having it shortly afterwards.
Nordic technology facts
- Internet penetration is high
- M-commerce take-up is high
- Take-up of Wap is slow
- Pioneering firms are based there
- It has become a laboratory for the world
- The climate makes the economics of mobile technology look more
attractive
- The affluence of the population means there is money to
spend.
Tales from the Nordic countries
- Things you can pay for via SMS from your mobile phone in
Scandinavia include soft drinks from vending machines, parking
charges and car washes
- Transportation companies are using mobile technology
extensively: for everything from notifying travellers by SMS when
their plane is going to be late, to giving delivery drivers access
to corporate systems via mobile devices so that they can collect
details of their payloads and schedules
- Third-party services can extract pre-specified data from
corporate databases and then relay it to mobile phones, enabling
sales people to check stock levels even when their employer does
not have an in-house portal
- Swedish teenagers play games with names like Botfighters on
their mobile phones, using location-sensitive technology to track
down opposing players who are in the same cell and then "shooting"
them via SMS
- The ability to ask your phone to find you the nearest public
toilet or Indian restaurant (now available in the UK too) is among
the location-dependent services pioneered in Scandinavia - for
example by Tele2 and Cellpoint
- Spectators at a Swedish ice hockey hall can follow the match on
handheld computers thanks to broadband wireless technology
developed by Telia. The referee wears a helmet with a built-in TV
camera and sensors relay players pulse and respiration rates to the
screens
- A Swedish company building and letting apartments, is working
with TTYL to provide each of 600,000 tenants with a personal
electronic mailbox, to which mobile access will be available.
Tenants can use the service to get information like transport
timetables and rubbish collection dates, and to find out when their
laundry is ready
- In Finland, traffic fines are related to your salary as well as
to the gravity of the offence, but you can still be fined on the
spot. The traffic warden equivalent can access your salary
information in the treasury database via a cellphone.