Mobile Internet content

The number of information and entertainment services targeted at mobile phone users is continually on the rise. i-appli and i-mode services already provide a variety of games, video clips, dating services and gambling opportunities. The frequent download of logos and ring tones on 2G networks is a good indication of the strong trend towards consumer adoption of digital content. Mobile entertainment services are getting more sophisticated as transmission speeds and handsets evolve. These are likely to represent a significant portion of mobile revenues over the next few years. Not only is content becoming more plentiful and varied, but the potential methods via which users can access content are also multiplying. One of the more interesting applications involves “codepoint” technology, which enables a mobile user to ‘scan’ for Internet content (see Box 2.6).

Users of an Internet instant messaging client ICQ can now send and receive SMS messages with mobile phone users. This marks the first step in the move towards truly fluid, mobile instant messaging.

The system works as follows. First of all, the ICQ client initiates the SMS message to a mobile phone.

The message from the ICQ user is forwarded to the gateway of one of the participating mobile operators.

This initial SMS message contains a return “number”

the SMS user can reply to. This reply number does not correspond with a particular user, but rather serves as an ICQ gateway to route the reply back to the original ICQ sender.

The communication is not instantaneous because it still makes use of the SMS network. However, ICQ-SMS connection is a good example of how messaging between the Internet and mobile worlds are merging.

Unlike in the early days of WAP, operators and service providers are beginning to realize that the requirements of mobile Internet users differ significantly from their wireline counterparts. Mobile usage is typically characterized by short bursts of activity, such as checking stock reports, playing short games, reading the latest news or gossip. The manner in which mobile users consult content does not mirror fixed Internet use. The main interest of the user of a mobile handset is to save time. Their “browsing” behaviour is typically objective-driven, rather than exploratory and generally limited to under 10 minutes (see Figure 2.5).

Although this may change slightly when flat-rate tariffs for mobile Internet become more commonplace, the mobile Internet will remain dominated by targeted searches, rather than open–ended browsing.

Next to mobile messaging, mobile gaming has been said to be an important driver for the mobile Internet, Today, most mobile handsets are equipped with pre-installed games. On most devices, limited storage capabilities impose restrictions on the quality and sophistication of the gaming system. Some games involve multiple players communicating with each other through a wireless connection. For games played locally, however, no connection is initiated and thus the activity cannot strictly be labelled “mobile gaming”.

A number of companies are already offering mobile gaming services. In Japan, DoCoMo has sold 13 million java-enabled i-appli handsets, which are specifically targeted at avid game players. M-gaming sceptics are concerned that games have already been developed on other platforms, such as home computers, consoles and interactive television, compared to which mobile phones and PDAs offer limited functionality. Nintendo, whose Game Boy is one of the world’s best-selling video game, introduced the Game Boy Advance Mobile Phone Adapter in 2001. The adapter can connect any standard Japanese mobile phone to the Game Boy Advance console and allow users to play games online. In Europe, some operators are offering games via SMS or WAP but these are typically text-based, where a user receives text messages informing them of their status and offering a series of choices or moves. In Sweden, a technology which combines location positioning with SMS has encouraged the growth of SMS war games, whereby users track and “shoot” each other across the city of Stockholm.

With increased bandwidth and the convergence of mobile handsets, PDAs and pocket PCs, the mobile gaming experience will be considerably enhanced. One of the main issues facing games developers, operators and handset manufacturers is revenue generation. Networked games are clearly favoured as they encourage users to check in daily for scores and rankings, engage other users in a virtual competition and communicate decisions. Wireless games allowing users to track down and “fire” at other users are being developed as mobile entertainment reaps the benefits of location-based technologies. Furthermore, short-range game connectivity is being facilitated through technologies such as Bluetooth.

Box 2.6: Scan this

One of the possibilities for bringing content to the mobile phone involves the well-known retail system of bar codes. Soon, mobile users will be able to scan content on posters or other printed material through their phones.

CodePoint software for PDAs and mobiles allows camera-enabled handsets to read visual symbols. The software interprets the symbols (such as barcodes), translating them into purely numeric codes, which are then mapped with Internet URLs. Through this system, the user is able to receive data directly from the content provider’s website, just as though they had clicked on a hyperlink in a conventional browser.

Before this technology can be adopted, however, the software must be embedded in handsets and mobile phones with digital cameras must become more commonplace. Two companies involved in this area, Bango.net and International Wireless, are currently exploring partnership possibilities with handset manufacturers, with a view to developing a commercial service.

Source: Bango.net, International-Wireless, Wireless Week, July 2002.

CHAPTER TWO: TECHNOLOGIES AND APPLICATIONS 25 Figure 2.5: Average length of mobile data sessions

Percentage of total respondents to a user survey

40%

40%

10%

8% 2%

Less than 5 minutes 5-9 minutes 10-19 minutes 20-29 minutes 30 minutes or more

Source: Jupiter Media Matrix and BCG.

It is as yet unclear how much bandwidth will be required to enable widespread mobile gaming and whether revenues generated from the service will be sufficient to cover these bandwidth requirements. A clear business model is yet to be developed. NTT DoCoMo includes gaming sites as part of its i-mode official sites, and thus is able to share revenues with content providers through a nine per cent commission. In Europe, revenue models mainly consist of advertising, sponsorship and usage commissions. Game developers have not yet been able to charge subscription fees.

With the advent of colour screens and digital cameras, there has been much excitement about mobile video services. There are two types of mobile video services: person-to-person and broadcast. Mobile video messaging, a subset of MMS, and real-time video telephony both fall into the first category. Mobile video distribution services fall into the second category. DoCoMo was the first to offer a mobile video telephony service through its 3G videophone, FOMA P2101V. Over GPRS, users will be able to enjoy multimedia video messaging and small video clips. However, for real-time services such as streaming video distribution, mobile video telephony and videoconferencing, users will have to wait for higher-speed 3G networks to be available. The same applies to mobile audio services. Once again, Japan provides an example of early adoption (prior to 3G), through DoCoMo’s M-Stage and KDDI’s Keitaide services: the operators offer music on demand to their users over a PHS (Personal Handyphone System) network at 64.4 kbit/s.

More and more mobile phone users are requesting the delivery of targeted content and information to their handsets while on the move. To respond to this demand, a variety of information services are currently available, such as international news headlines, sports updates, traffic information, weather forecasts and stock quotes. Information services can either be static, time-critical, location-specific or a combination. Static information includes city guides, search engines, dictionaries and so on. Time-critical information may include share quotes and sports score updates. Location-specific information services include navigation assistance and tracking services. For the healthcare industry for instance, the main benefit of the mobile Internet is the transmission of patient information regardless of location. Physicians can access patient histories, laboratory results, pharmaceutical information, insurance details, and medical resources while on the road. Furthermore, mobile devices can be used for patient monitoring in hospitals and in the home.

Although content is being created by commercial players and available to mobile users for a fee, users themselves are not yet able to create Web pages or content for mobile devices. Thus far, this differs from the fixed-line Internet world, with a more open content development model that has encouraged, for instance, the phenomenon of blogging, or the creation of online diaries.

2.5.1 Content packaging: mobile portals

A mobile portal can be defined as a central website providing services and content to end-users accessing the Internet via mobile devices. Mobile portals aggregate content and services from a number of independent sources with a view to providing a customized experience for the mobile user. Content can include messaging, search facilities, targeted news and information services and transaction services. Portal service providers can focus on vertical or horizontal applications. Horizontal portals feature a wide range of common applications typically for the consumer market. Vertical portals are geared towards a particular market segment, such as finance, travel or sports. The most successful mobile portal thus far is clearly NTT DoCoMo’s i-mode portal, which boasted over 33 million users in July 2002(see section 2.3.2).

Many established players are providing mobile portal services including manufacturers, operators and Internet portals.⁵⁹ However, “pure-play” mobile portals have also attempted to capture a share of the market.

Examples of mobile portals include Vizzavi (jointly owned by Vodafone and Vivendi Universal), Lycos, Sonera, Excite and AOL.

There are a number of factors leading to the fragmentation which characterizes the mobile portal market.

These include the large variety of terminal types, operating systems and browsers as well as content development languages and tools. There are also a number of open and proprietary standards for formatting and information presentation. The future success of the portal market hinges on harmonization and standardization of security features, as well as the development of privacy policies and anti-spamming legislation. The creation of appropriate and user-friendly billing models will also provide a significant impetus to portal development.

2.5.2 Transaction services

Transaction services include retail services, financial services and payment services. They fall under the general heading of “mobile commerce”.

Already, mobile users can electronically purchase products and services using their mobile phone. In the retail world, these include instant price and product information, promotions and auctions. Through mobile-retailing, users can conveniently compare prices and services. They can also purchase tickets, check-in for flights, make cinema reservations or pay for parking without the need for exact change.

Payment can be effected either through the user’s monthly mobile telephone bill or via a third party service, such as PayBox⁶⁰ (see Box 2.7).

Charging for the download of ring tones, logos and cartoon characters on a mobile phone bill were the first attempts by mobile operators to charge for alternative services. At this time, mobile operators seem reluctant to expand these services by charging for value-added services through monthly bills. There has been rapid take-up of alternative services in countries such as Finland and Malaysia. In March 2002, Europe’s Vodafone⁶¹ and T-Mobile announced the development a common platform for mobile payments, which will allow users to store their personal details, credit card and debit card information on their mobile phones in order to purchase goods and services.⁶²

Although vending technology is not widespread in Europe and North America, it is more or less ubiquitous in countries like Japan and Korea. This has led to its strategic combination with mobile technology. One of the most interesting applications, known as Cmode, was launched by Coca-Cola, NTT DoCoMo and Itochu Corporation in Japan in 2002 (see Box 2.8).

The advent of mobile payments is also opportune for developing countries, as it creates the ability to buy goods and services using a mobile phone. The ubiquity of cash in developing countries and unavailability of credit means that most citizens do not have credit cards. This makes online purchasing difficult . Cash is still king in many developing economies where citizens do not have credit cards nor would many qualify for one.

This limits their ability to purchase over the Internet. But they do have mobile phones which could be used as mobile wallets with Internet purchases deducted from mobile bills or prepaid balances.

CHAPTER TWO: TECHNOLOGIES AND APPLICATIONS 27 Box 2.7: Mobile money: The PayBox example

PayBox was founded in August 1999 and is 50 per cent owned by Deutsche Bank. It operates in five European countries: Austria, Spain, Sweden, Germany and the United Kingdom. PayBox allows users to pay taxi fares to drivers signed up with the service, and pay for goods and services at selected restaurants and retailers. The service works a bit like a debit card and is essentially a third-party message system, i.e. it sends a message to the user’s bank after the user has authorized payment via a unique PIN code. PayBox also facilitates Internet e-commerce and money transfers. The following describes two different applications of the PayBox system.

Source: PayBox.

Mobile financial services were one of the first transaction services available over mobile networks. In order to counter the threat of “disintermediation” by mobile operators, banks have invested heavily in mobile banking. The EITO (European Information Technology Observatory) categorizes mobile financial services as follows: mobile banking (e.g. account balance, transaction history, funds transfers, bill payments, news &

information), mobile brokerage (e.g. stock trades and quotes, alerts and notifications, portfolio management) and mobile insurance (e.g. travel insurance on demand) and customer care.⁶³ A recent example of mobile banking in Denmark enables consumers to withdraw cash from a traditional automated teller machine (ATM) using a mobile phone. The pilot project was announced at the end of April 2002 by ANCR Corporation, AU-System and Beamtrust.⁶⁴ This represents one of the first attempts to replace the magnetic-stripe card with a mobile phone for cash withdrawals. The user initiates the transaction by choosing the transaction type, account details and withdrawal amount on his/her mobile phone. When near the ATM, the consumer enters the security PIN into the phone, which then transmits these details to the ATM. The ATM then dispenses the cash.

Embedded SIM (subscriber identity module) cards, prevalent in the GSM world are being upgraded and adopted by 3G operators. These 3G USIM (Universal SIM) or UIM (User Identity Module) cards will be capable of storing sensitive information and financial information, such as credit card details and electronic wallets. A trial service operated by KDDI in Japan is set to start autumn of 2002, featuring secure UIM point-of-sale transaction services (see Box 2.9). It can be said that these embedded SIM cards are the early

Online Mobile Retailing

• At the checkout, the user selects to pay with paybox and enters his/her mobile phone number

• PayBox then calls the user on his/her mobile phone

• By entering his/her paybox PIN code, the user authorizes payment

• Confirmation is received via the mobile phone.

• Paybox debits the user’s bank account and credits the purchase amount to the online shop

Person-to-Person Mobile Money Transfer

• User 1 calls a designated number (in the UK 08700 729269) and presses ‘1’ to send money.

• User 1 then enters the mobile phone number of the recipient, User 2, and the amount for transfer.

• User 1authorizes payment by entering his/her paybox PIN code.

• Confirmation is received immediately to the mobile phone of User 1.

• Paybox debits the User 1’s bank account and credits User 2’s bank account.

Box 2.8: Unwire me a Coca-Cola : always Cmode

The latest consumer service in Japan for mobile users on the go is called “Cmode”, a compound term combining i-mode and the initial “C” for Coca-Cola, Culture, Communication. The Coca-Cola Group plans to install 2’000 Cmode-compatible vending machines called “Cmo” by the end of 2002. “Club Cmode” members will be able to buy admission tickets to amusement facilities, pay-per-download of information content and local area information such as maps from the Cmo machines. The machines come equipped with printer, speakers and a display panel. To access members-only services, users must first register on an i-mode site “Coca-Cola Moments”. Once at the machine, users pass their mobile phone over the sensor for product and user verification in order to take advantage of the services available.

The Cmo system and server will be made available to other service providers. This means that companies providing membership services and Cmo machines at their sites will be able to adapt the Cmo user interface for their particular needs and branding requirements. Partnerships with various content providers are planned in order to expand the range of services.

Source: NTT DoCoMo, Total Telecom News.

Box 2.9: The credit is in the pocket KDDI’s Wireless credit card

KDDI and four credit card companies will begin a trial credit card payment service with CDMA2000 1x handsets in 2002. The handsets for the trial service have UIM (Universal Identity Module) cards containing credit card information. An infrared port on the handset allows information to be transmitted to the point-of-sale terminals (POS) in most shops. This handset can also be used for shopping on the Internet: by performing mutual authentification between the handset and the online shop server, a greater degree of security should be ensured. In the future, a totally new mobile commerce market is expected to emerge as online shopping increasingly substitutes visits to physical outlets. Application services such as GPS, e-mail and electronic coupons will doubtless all play a role in this transformation of the shopping experience.

The secure transmission will use a standard developed by VISA based on IrFM (Infrared Financial Messaging) technology. KDDI opted for infrared technology rather than Bluetooth, due to security reasons. The UIM card will use SSL (secure socket layer), a secret key, and Java applets.

At the present time, under 15 per cent of adults own credit cards in Japan, and thus the number of mobile users that can avail themselves of such services is limited. However, in the future, banks and operators plan to extend this payment service to the large population of young mobile phone users, in the context of the evolving “next generation UIM technology”.

Source: ZDNet Japan, April 2002.

precursors of an emerging trend, known as “pervasive computing”. Pervasive computing refers to the presence of numerous, casually accessible (and sometimes invisible) computing devices. These can be mobile or embedded in the environment, but constantly connected to the Internet and other network structures.

2.5.3 Business applications

Mobile phone networks have drastically changed the way business is done. Plumbers, for instance, used to rely on answering machines to receive calls during the day and could only return calls in the evenings. Often, they could not respond quickly enough to an emergency because they were on the road and out of reach.

Mobile networks have extended communication to the remote job site: plumbers can now use a mobile phone wherever they work to make appointments or solve urgent problems.

Mobile networks have extended communication to the remote job site: plumbers can now use a mobile phone wherever they work to make appointments or solve urgent problems.