Did We Forget About the End-User? Reaching the Mass Market by Overcoming the 'Hype' of Mobile Data.

SAN JOSE, Calif. -- The following is an article written by Brent Iadarola, senior industry analyst for Frost & Sullivan's Mobile Communications Group.

As consumers become increasingly cynical of the failure of mobile carriers to deliver the compelling mobile data experience that was so loudly promised, a wave of realism is infiltrating the mobile marketplace. With lackluster interest and adoption of an assortment of new mobile data offerings, many are questioning whether the market for 3G and related next generation services such as MMS will be "evolutionary", as opposed to "revolutionary."

A number of trends are materializing with the maturation of mobile data networks, devices, applications and integration channels. Most notably, a hot market with a lot of hype has yet to gain the momentum that was originally anticipated. While mobile operators have made strong "business cases" for new mobile offerings, reality suggests that carriers have had significantly more difficulty in converting the technology into a compelling end-user experience.

In many instances, the hype of mobile data services has created misconceptions that have led to a "let-down effect" for early adopters. Consumer surveys indicate that this appears to be particularly prevalent in countries with high "wired" penetration rates, as the use of mobile data is often compared with experience on the fixed Internet. While maturity can serve as an advantage with respect to technology infrastructure, it can actually serve as an inhibitor to the adoption of mobile data services, as consumers are often unimpressed and disenchanted with the slow, cumbersome wireless version.

The Roadmap to Adoption

So how can today's mobile carriers efficiently and effectively introduce new mobile services that will penetrate the mass market and meet or exceed user expectations? First and foremost, carriers must not lose sight of their core competencies -- voice services and messaging. The lion's share of revenues for mobile carriers worldwide is still primarily derived from voice. In 2004, voice traffic accounted for approximately 95 percent of total network traffic. And, the majority of the remaining 5% of revenues was primarily driven by text messaging. Thus, it is critical to acknowledge that existing person-to-person communication services, specifically voice calls and texting, represent the benchmark in terms of reliability and usability. When new features and services do not match up to the baseline of these already proven solutions, the result is often user dissatisfaction.

Secondly, value added offerings, whether voice or data, must meet a clear market need and at a price point that the end-user is willing to pay. Consumers are requiring that services are user-friendly, easily compatible with the mobile interface and, most importantly, actually relevant to them by filling a real need or solving a problem. These requirements, coupled with ease of delivery and the ability for the subscriber to effortlessly initiate an application or service, will be critical to stimulate adoption. In fact, a recent focus group of mobile users revealed that 67 percent of the consumers surveyed would not use a new service on their mobile phone if the solution was not easy to understand and use.

Third, as carriers are now faced with the difficult task of evaluating the various service offerings that can generate sustainable revenues that exceed user expectations from both a performance and usability perspective, it is becoming increasingly apparent that an application that is released too soon or before the technology can adequately support the application may never be able to recover from an initial negative experience for the customer. MMS may be dangerously close to this reality already. On the other hand, a carrier that releases an application too late risks losing customers to competitors that elect to deploy services and achieve first mover advantages. Thus, the carrier must meticulously position services to be released in line with the maturity of the market, understanding that timing is critical, as the users' first impression of services always have lasting effects.

Finally, failure to achieve interoperability will remain an enormous barrier for the broad adoption of next generation mobile services. Currently, there is a vast array of incompatible network standards, operating systems, browsers, and devices that make large-scale convergence for many mass-market offerings, such as MMS and push-to-talk, extremely complex. Standardizing the rich mix of network technologies and the interchange of data with applications platforms is a major challenge and is likely to require the cooperation of all market participants. Definitive standards are highly unlikely to emerge in the near-term. Thus, carriers must solicit solutions that can supercede interoperability limitations.

Solutions That Make the Cut

In this environment, HeyAnita's Rapid Message Service(TM) (RMS) has emerged as an innovative solution that addresses the range of today's market challenges. The service is essentially a voice enhancement to text messaging where mobile users can exchange voice messages without the need to engage in a live telephone conversation. Recipients of RMS are notified of the sender's name via text message. The RMS can then be listened to at the recipient's leisure and a reply can be sent with the click of a button. Since the solution is based on recorded voice instead of text, RMS eliminates the need to type messages on a cell phone keypad, optimizing ease of use. This addresses a major text messaging adoption hurdle in the age 25 and older market where texting has not achieved the same penetration levels as with teenagers and young adults. For the carrier, RMS provides a valuable tool for driving premium-messaging revenues from both existing and potential SMS text users.

More significantly, the solution is agnostic to both the carrier network technology and the user's handset technology. This avoids the interoperability issues that have plagued so many next generation services. In contrast to other messaging solutions that have rolled ahead of their time, such as MMS, RMS is realistically aligned with the current stage of the global market environment and has been architected to leverage next-generation data transports as they mature. In sum, RMS has emerged as one of a very few viable solutions for mobile operators to deliver on real market needs, drive premium messaging revenues from both existing and potential SMS text users, leverage the voice and data infrastructure investments they have already made, and exceed user expectations from both a performance and usability perspective.

Ultimately, operators that can satisfy their customers with relevant, cost-effective services will reap the rewards in the form of churn reduction, enhanced average revenue per user (ARPU), and the development of a culture within the installed base that is receptive to new mobile solutions.

For more information on this topic, or to schedule interviews with Frost & Sullivan industry analysts, please contact Dustin McVey ([e-mail]) at 210-247-3830.