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IT
Mobile Internet
Mobile phone operators have been thriving in this market ever since they were launched about five years ago, as the companies benefit from a sleek business model that allows them to push down implementation and operating costs and enjoy profit margins. However, as Connex and Orange are finding it more difficult to acquire new post-paid clients and at the same time revenue from voice calls is leveling off, a new source of cash is needed to transform the boom into sustainable growth over the coming years. |
A premium quality service
As in other markets, GSM operators have decided premium quality data services might just be the way forward. As UMTS licenses caused operators to incur huge expenses, mobile phone operators in Eastern Europe, Romania included, stuck to 2.5G data solutions such as GPRS plus the Wireless Application Protocol (WAP). The question that is up in the air is whether there is still a market for such services and to what extent such services hold out a promise for extra revenue.
WAP-enabled mobile phones allow the user to browse specially designed sites on the Internet. Initially, mobile phone operators believed they could cram information and pictures into the mean mobile phone display. As data transfer speeds could not exceed 9,600 kbps and display resolution could not actually accommodate any real picture, mobile phone companies had to give up the whole concept of selling WAP as Internet access and reposition this on the market as a sort of mobile directory. All three GSM providers have set up their own WAP portals. Andra Calin, corporate and data services manager with Orange, told Business Review: "Orange WAP consists of a series of applications and content to meet the needs of mobile customers. You can keep updated with the latest business and finance news, check out the Central Bank's exchange rate or find a restaurant to eat out at. Orange WAP also allows users to check their email accounts on the go." Recently Orange launched an all-you-can-eat scheme for WAP. For a flat charge of $4 per month customers have unlimited access to WAP pages. WAP in itself is just content and mobile phone customers can access it through two technologies. One is the regular CSD access that only requires that the handset has a built-in WAP browser. The other one involves General Packet Radio Service (GPRS), a high speed always-on IP connection. Connex charges USD 10 cents per minute and 7 cents peak and off-peak hours for accessing WAP services through traditional dial-up technology. Prepay users have to pay double that. Orange's WAP Unlimited is based on GPRS technology and does not keep track of the volume of data one transfers. Connex has two different ways to charge for accessing WAP through GPRS, but both involve paying for the volume of traffic: either $0.04 per 10KB with no monthly fee or $0.02 per 10 KB with a monthly $3 flat fee.
Romeo Ganescu, product manager at Connex's service development, told Business Review: "The most popular applications on Connex WAP are games, especially U win, a quiz and also WAP email. Connex Freestyle, the entertainment service, is also popular on WAP as well as financial information, TV listings and weather forecast."
Cosmorom, the other smaller GSM player, does not offer GPRS access, but its traditional WAP offer is cheaper than similar services from the two major players. "Cosmorom charges $0.09 per minute for WAP access but the first 30 seconds are free. We also charge per each second after the first 30 seconds. Tariffs for pre pay users stand at $0.15 per minute. One can send and receive emails, get notification for every new received e-mail via SMS by accessing CosmoWAP, Cosmorom's own WAP portal," Mihaela Radacina, BTL specialist expert and PR with Cosmorom told Business Review. Other Cosmo WAP features include press digests, weather forecasts, horoscopes, biorhythms and jokes.
However complex these products are, they have yet failed to draw the large audience mobile phone companies might have been hoping for. Before GPRS access was introduced, WAP was slow and cumbersome to use and consumer reviews worldwide do not single out WAP as a user-friendly service. Instead of becoming a mass phenomenon on the heels of SMS, WAP is still a niche product. What is more, according to high ranking officials working with mobile phone carriers in Romania, the percentage of data calls carried over GSM networks is still in the meager range of 0.2 percent. By comparison, the CDMA operator in Romania claims 20 percent of its calls are in fact data ones.
The market is limited and one of the reasons for this is that information on the Internet is basically a commodity which can be retrieved most of the time free of charge in a more convenient way than pecking at mobile phone keypads. What is needed is a range of value added services which users are willing to pay for. One such service that is available on WAP in Romania is an online cinema booking system (Hollywood Multiplex in Bucharest Mall). The problem is that users have to pay separately for this service.
GPRS seems much better positioned for accessing regular Internet pages, but in this case it becomes too expensive for the Romanian market, with an average of $2 per each 1MB that is transferred. Increasingly, most sites come with eye-catching Flash applets that are difficult to gauge and having control over how much one pays can become tricky regardless of the cost control tools that come with the service. Even though the latest handsets boast full-color and larger displays they cannot yet measure up to accessing the Internet with a notebook /PDA and a CaTV or fixed wireless Internet access solution.
Ganescu of Connex argues: "For GPRS, our minimum guaranteed speed is 13,400 kbps and the highest is 53,600kbps. The network itself can accommodate much higher speeds. The limitations rest with the handsets. The good part is that you can still take regular voice calls when online through GPRS, as the Internet connection goes on stand-by mode automatically and resumes instantly the moment the voice call is over."
For the time being, operators try to sell GPRS services to companies with specific needs for mobile data communication. Anda Calin of Orange points out that, "Based on GPRS it is possible to develop a number of applications to meet the needs of various companies. Such services may include maintenance of data bases in real time, access to the office email account and access to all resources on the company's Intranet (documents, applications and so on). Last but not least, GPRS makes possible telemetric applications: security systems, connection to ATMs, management of car fleets and remote monitoring of equipment."
Ganescu says his company's sales force is keen on disseminating smart solutions for GPRS Internet access: "Many of the companies that chose VPN GPRS picked a solution to get on to the Internet through a GPRS-enabled phone and Pocket PC Compaq ipaQ 3970. We chose HP as a partner in this area because the solution offers cutting-edge Bluetooth technology. VPN GPRS can therefore offer secured access to data bases and corporate emails."
Even so, mobile Internet through GPRS cannot actually compete with ISPs that command the lion share of the corporate Internet market and for the time being the entire market ISPs address is a mere $25 million.
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