Data to star at CeBIT 2002, full operator preview from EMC
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by Dan Dickinson, Research Analyst
The German GSM operators and UMTS licence holders say that mobile data will be the overriding theme at CeBIT 2002. The trade fair and exhibition being held in Hannover in March 2002, which the organisers have said has attracted record numbers of exhibitors, will also be the first chance for operators who have partially or wholly rebranded to meet the industry and public. On the application front MMS will feature significantly, not least given Nokia's reported statement to journalists that there will be no new Nokia handsets without an MMS capability.
CeBIT 2002 is likely to see a number of 'live' demonstrations of UMTS and its multimedia services, although the operators are remaining secretive for competitive reasons as to how and what exactly they will be demonstrating. The infrastructure suppliers, Panasonic and Nokia, are both reported to be presenting UMTS demonstrations using networks constructed at the exhibition site.
Some in the industry have predicted that 2002 will be the make-or-break year for one of the six UMTS licence holders, so the reaction to CeBIT 2002 presentations may well be an important 'litmus test' for the future of at least one of the operators. All the UMTS licence holders will be no doubt enthusiastically marketing future UMTS products, while behind the scenes some will be looking very closely at their business plans again. Talk of consolidation in the German market is not new but new alliances may seem more real after CeBIT 2002. Sonera, with its own financial problems and Telefonica could pull the plug on Quam. Telefonica, for its part, may well be interested in getting a more secure foothold in the German market by acquiring VIAG Interkom through mm02. KPN could be tempted to finally offload E-Plus, a move which given France Telecom's problems with MobilCom might awaken the interest of the French operator.
T-Mobile (GSM-900 network operator and UMTS licence holder)
T-Mobile will use CeBIT 2002 to emphasise brand changes and its move towards an international T-Mobile brand. It will also be presenting its online portal which is centered around a number of so-called 'T-Zones', which include sport, finance, travel and entertainment. The aim is to further build the T-Mobile brand on the international stage as a data brand as well as making the portal 'more attractive for mobile subscribers'. It is expected that a billing system to charge for the content from 240 providers will be developed later in 2002.
Mobile data solutions will be the main focus for its exhibition demonstrations, with T-Mobile aiming to show 'what is possible today over GPRS and what will be possible over the next six months'. The operator said that entertainment is 'a big issue' and that the demonstrations include the downloading of Java games. Other 'hot topics' it will attract subscribers with are handsets with colour displays and polyphonic ringtones. It will also 'demonstrate UMTS voice and data transmissions'. On the corporate front, T-Mobile will emphasise data downloading and secure transmissions.
Vodafone (GSM-900 network operator and UMTS licence holder)
Vodafone will be completing its 'Aus D2 wird Vodafone' rebranding campaign, which will see the brand renamed simply Vodafone. (The legal trading name remains Vodafone D2 GmbH). The operator said the use of colour in mobile data would be its focus for CeBIT 2002, with downloadable games and MMS featuring heavily. The Sony/Ericsson Communicam handset will demonstrate how pictures can be emailed. Coloured WAP navigation will also be demonstrated and is expected to be launched in H2 2002. There will be a live UMTS demonstration showing live pictures from a news programme. Vodafone will also announce the launch of GPRS roaming services in Europe, but has no yet specified with which countries.
E-Plus (GSM-1800 network operator and UMTS licence holder)
i-mode will be the centre piece of E-Plus's presentation and will be according to the operator 'the main competitive difference' between it and the other operators. The technology is due to be launched by E-Plus in Q2 or Q3 2002 () with handsets supplied by NEC (). It may be commercially launched at CeBIT 2002 if any remaining bugs are ironed out in time. The operator has confirmed that it will give more details on handsets, tariffs and services for i-mode. It is likely to be one of the most eagerly awaited launches with both the industry itself and consumers waiting to see if i-mode is as successful in Europe as it is in Japan, where it is used by an estimated 30 million NTT DoCoMo subscribers.
E-Plus will also be featuring GPRS content and handsets, but has confirmed it is unlikely to make a 'large UMTS presentation.'
VIAG Interkom (GSM-1800 network operator and UMTS licence holder)
Like T-Mobile, VIAG Interkom will use CeBIT 2002 as a launch pad for its rebranding campaign, with the operator appearing under the slogan 'VIAG Interkom is O2'. It follows the strategy set out by mm02 (formerly BT Wireless) to build an international brand for its subsidiaries across Europe. The GSM-1800 operator like the other operators is concentrating on mobile data. It said one of CeBIT 2002?s highlights will be the Internet-Pocket PC O2 xda which doubles as a mobile handset. 'Applications especially developed for the O2 xda are the main focus of attention'. The applications include games and location based services. MMS is also expected to feature significantly.
VIAG said it would also be introducing new 'billing patterns' for mobile internet services. These include premium services with content providers levying a charge. Retail 'sponsorship' of call charges, which allows subscribers to make purchases in online shops without having any connection charges, will also make an appearance.
VIAG will also be targeting business subscribers by highlighting its GPRS IP VPN network as well as presenting BlackBerry functions (). The operator will also be demonstrating a third corporate mobile communication option which runs in conjunction with Microsoft?s Mobile Information Server 1.5.
MobilCom (GSM Service provider and UMTS licence holder)
The row with France Telecom/Orange over UMTS commitments is likely to cast a shadow over MobilCom during CeBIT, at least as far as the industry concerned: MobilCom and Orange have exhibition stands in the same hall, which according to MobilCom spokesman, Matthias Quaritsch, 'could be very interesting depending on what happens in the days running up to CeBIT.' The exhibition-going consumers are unlikely to be interested in the two companies' very public spat.
MobilCom has branded as 'top secret', exact details of what it will be showing on its stand, although it has told EMC that 'demonstrating the benefits of mobile data musing GPRS and UMTS' will be the focus of its marketing. The service provider has confirmed that it will demonstrate 'live UMTS without WLL' with a 'number of multimedia applications'. It is also promising the unveiling of new handsets. Spokesman, Matthias Quaritsch said, 'CeBIT 2002 is very important as it finally gives the network operators and handset manufacturers chance to bring mobile data to life. For the last one and a half years UMTS has been a very abstract concept especially for consumers. We are now hoping to show them that it is very real, useful and fun. In this way we can assure the industry that the money invested in UMTS is being well spent.' MobilCom said that 18% of its turnover was generated by data in 2001, a figure it wants to increase to 52% by 2010.
The service provider, along with Vodafone, put the pressure on the other UMTS licence holders in January 2002 when it said it hoped to open its network by Q3 2002 (), a target which MobilCom has since hinted is not realistic given the lack of available handsets.
Quam (GSM MVNO and UMTS licence holder)
After its problematic launch in November 2001 (), Quam will be concentrating on both raising its profile and winning new customers in a bid to boost its subscriber base ahead of the launch of UMTS. CeBIT 2002 may well be the last real chance for Quam to establish itself amongst subscribers in Germany. The MVNO already has very competitive GSM tariffs, but could go for broke by undercutting the established operators still further. It is promising new entertainment services as well as new prepaid 'features'. It added that it will be targeting small and medium sized businesses.
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EMC Insight: Pricing Strategies for Mobile Content (published October 2001)
emc-database.com
Summary of key points
The mobile data market is in its infancy. Services so far adopted, such as SMS and the BlackBerry email, have been successful because they offer a clearly defined, unique service: users buy a service rather than a quantity of data.
The complexity of the i-mode charging model has not been a barrier to uptake - the average Japanese i-mode user knows how large their bill should be per month even if they have no idea how many 'packets' of data have been transferred.
GPRS operators are divided over the importance of using an easily-understandable charging metric: some argue that users have no difficulty paying electricity bills calculated in kilowatt-hours. Others say the charging must be transparent.
The majority of operators have launched GPRS services priced in 'bundles' of megabytes because it is the easiest initial option. The cost per megabyte decreases the higher the volume purchased, as with voice minutes purchased in 'bundles'.
EMC examined 74 GPRS tariffs and found the average cost of data transfer for different monthly volumes was shown to range from $64.30 per MB for 0.1MB transfer to $8.20 per MB for 5MB transfer.
Most operators have so far introduced only one set of tariffs and have yet to make even their first revisions. As the volume and variety of content grows, operators will increasingly need to differentiate prices on the basis of content and services and to introduce multiple charging parameters.
Tariffs have initially been shaped to suit the business sector in particular, framed around applications where the mobile handset can act as a modem offering users access to corporate LAN. The consumer applications and content available to date have differed little from those offered over existing 2G networks.
GPRS operators' current emphasis on 'owning' the customer and access to content is likely to give way to a more open approach particularly in the case of small operators who lack a strong brand.
Billing vendors suggest that in late 2001 that they are lacking directional input from operators regarding the pricing parameters to be used, but that systems, once upgraded can cope with any charging structure
EMC recorded a fall in world ARPU from $64 to $39 per month during the period 1996-2000. However, it is too early to provide certian predictions of data service take-up and the effect of that on revenues using the current relativley unsophisticated charging models so far announced.
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