Wireless Web World.

BellSouth gives new meaning to "www," introducing Latin America's first cell phone Web service.

WHETHER IT'S AN EXTENDED COFFEE BREAK AT WORK OR a chance encounter with friends during an all-night dance marathon, Argentines love to socialize at cafes, discos and neighborhood plazas. Study after study shows that they spend less time than less-affluent Latin Americans surfing the Net, apparently refusing to forsake a big night out for gabbing in virtual chat rooms.

But now, Movicom-BeilSouth believes it has the magic formula to entice Argentines to become full-time cybernauts. Instead of bringing them to the Internet, the unit of BellSouth Corp. is bringing the Net to them. In March, the Argentine cellular phone company became the first Latin American wireless operator to launch a cell phone Internet service.

"The idea is for the cell phone to complement the mobile lifestyle of our clients, many of whom are young professionals who have grown Internet dependent at work and want access to it on the go" says Movicom's Internet manager, Maria Zavaiski.

Movicom will initially subsidize the US$200 purchase price for the Motorola phones and expects the Buenos Aires gadget-hungry public to flock to the new devices. Company officials hope that at least a quarter of its estimated 1.4 million users will purchase the phone within 18 months. Movicom would not reveal, however, how many clients have already contracted the new service, which allows users to send e-mail, keep dates in a Web calendar and read the latest news, sports and entertainment on a phone's screen.

"In Great Britain, British Telecom was able to reach a 25% penetration in a year, but since Argentina is a less affluent market with fewer Internet users, we think it will take us about 18 months," predicts Zavalski.

Movicom's head start will give it an edge over its major competitors--market leader Personal, an affiliate of Telcon; Italia and France Telecon; Telef[acute{o}]nica Unifon, part of Spanish group Telef[acute{o}]nica; and CTI Movil, backed by U.S.-based GTE. It will be able to develop local applications and e-commerce alliances with local vendors. Zavalski says the company is already negotiating agreements with local banks and retailers.

Prepaid penetration. The introduction of cell phone Web service comes at a time when Argentina's wireless market isn't as robust as it once was. Overall subscribers grew by some 30% last year, but combined sales by cellular phone companies barely budged from 1998's total of $2.6 billion, explains Enrique Carrier, telecom analyst with local consulting firm Prince & Cooke. That's because cell phone companies have been marketing cheaper options such as prepaid plans as a way to penetrate less wealthy socio-economic groups.

Customers buy prepaid telephone cards to avoid gabbing over budget with their cell phones. When they use a card up, they simply buy another. There is no other charge. For cell phone companies, the result has been a drop in average monthly income of $55 per line last year, versus $99 in September of 1998, says Carrier. He estimates that about 60% of overall subscribers, and 80% of new customers opt for the prepaid scheme.

Moreover, all wireless companies have announced plans to launch a similar Internet service, although Movicom is the only one that has actually done so to date. Currently Movicom's Web portal allows users to perform only limited functions such as sending and receiving e-mails, maintaining an online personal agenda and accessing Wireless Application Protocol (WAP) Web sites, which are scarce in the Spanish language. Movie schedules, stock prices, and weather forecasts are among the most frequently consulted items, says Zavalski. The handsets also allow customers to contact the nearest police station, summon taxis and ask Movicom representatives online questions.

Competitors, however, say Movicom's cell phone Web service is at such an early stage that its technology differs little from their existing one-way messaging services.

But Movicom and its parent BellSouth believe that once customers try their mobile online services, they'll never want to go back to conventional cell phone messaging. "The measure of success will be which companies best keep up with customer demand," says Jim Bacon, vice president for wireless product development at BellSouth International.

The cell phone companies are definitely betting that cell phone Web service will be something customers demand. Argentina's 4.5 million wireless subscribers will be the first--but definitely not the last--Latin Americans surfing the Net on a cell phone during their daily commutes. In Mexico, leading wireless operator Telcel announced recently that it would launch mobile data services this summer in partnership with Sweden's Ericsson. And BellSouth, the region's leading wireless provider with 7.2 million subscribers, plans to gradually extend Movicom's trial run in Argentina to the other nine markets where it operates, including Brazil, Chile, Ecuador, Guatemala, Nicaragua, Panama, Peru, Uruguay and Venezuela.