The latest GSA Global Mobile Dialogue™ (GMD™) discussed "Building New Mobile Revenues with GPRS". A panel of leading industry experts contributed views and insights to an audience of invited guests, including suppliers, analysts, consultants and the media. The panellists were:

Christopher Nicholson		Independent European Telecoms Analyst, Oraca
Peter Reinisch		Vice President, GSA and Vice President, Siemens Mobile
Norbert Sagnard		Vice President, GSA and Principal Consultant, Logica Mobile Networks
Moderator		Discussions were moderated by Sally Bundock, Financial Journalist and BBC Television presenter

The panel agreed that the industry is now in a good position to reap the benefits of GPRS investments. The mobile phone market has achieved 70-100% penetration in advanced markets and most users are well accustomed to using their phones for services other than voice, thanks to the development of the short messaging service (SMS). Most operators have migrated their networks to GPRS, new devices are available in volume, and the first picture messaging/MMS services have started.

All elements are basically in place to drive new revenues. The experts agreed that the platform for growth with GPRS is a near-perfect model, while accepting that current market conditions are challenging. Current investment cycles are much shorter for GPRS; network equipment is depreciated within 3-7 years, rather than a historical 15-20 years. The panel warned, however, that the industry needs to focus on important business issues, especially Marketing.

Four basic steps for GPRS success were outlined:

-		evaluate the services which can utilise the attributes GPRS; especially see what is happening in the (fixed) Internet
-		optimise the billing model; "if you can’t bill it, kill it"
-		encourage and recognise the value of partnering; establish fair agreements for all parties in the value chain
-		ensure effective communication to the market, use the necessary strategic tools e.g. for customer segmentation

On the issue of service pricing, there is concern about the current market approach of charging customers for units of data, rather than flat rate tariffing, since customers need to be able to assess value for money. The panel suggests a majority fixed rate tariff model, with any exceptions being clearly indicated. The panel believes that the applications most likely to succeed will be:

-		picture messaging (expected to have a big impact on revenues)
-		integrated messaging
-		instant messaging
-		home security
-		information services
-		transactional services/m-commerce.

Global Mobile Dialogue™ #7
Cannes, February 20, 2002

How to Repeat SMS Success with MMS

The latest GSA Global Mobile Dialogue™ (GMD™) took place in Cannes at the 3GSM World Congress, focusing on the theme "How to repeat SMS success with MMS" - a topic that not surprisingly prompted a lively debate with some strong views!

Four guest panellists - Marsha Olch of AT&T Wireless Systems; Stuart Jeffrey of Lehman Brothers; Dave Lawson of Logica; and Volker Ziegler of Siemens debated under the temperate aegis of moderator Julian Bright, editor of Emap's ROAM magazine, in front of an invited audience of key industry players, analysts, media and GSA members.

The panel was in agreement that MMS represents a crucial market opportunity, as the first taste of mobile data services en route to 3G - and communicated a number of clear messages:

-		There is considerable enthusiasm for the concept of MMS but also a danger of over-hyping expectations versus deliverables
-		The industry should avoid the temptation to promise too much, too soon and concentrate on incremental steps that deliver a good user experience
-		Device simplicity and ease of use are absolutely paramount, as are interoperability issues and seamless roaming
-		The success of MMS is a key driver for future investor confidence in 3G services
-		Operators and vendors must focus on improving the dialogue process, finding new ways to blend technology development alongside new business models to create a successful environment for mobile data services.

GSA's motivation in establishing the GMD events is to create a forum for free and frank debate on relevant "hot" topics, identifying areas of common interest and providing an opportunity to air concerns and offer solutions. The MMS debate highlighted the importance of bringing operators, investors and suppliers together in a conducive environment, facilitating the process of communication. With the first commercial launches of MMS services scheduled for mid 2002, the GMD pointed to the need for a balanced evolutionary approach to build customer confidence. SMS' success was founded in part on the fact that it is simple to understand and use, and it works extremely well. MMS will meet market expectations only if it delivers the same experience.

Global Mobile Dialogue™ #6
Rio de Janeiro, December 3, 2001

How Will GSM Meet the Expectations in Latin America?

This latest Global Mobile Dialogue was held at the end of the GSA Seminar "Applications Adding to the Revenue Stream", at GSM Americas 2001. Industry experts who participated in this Global Mobile Dialogue™ contributing their insights and views were:

Peter Reinisch (Siemens), Leo Nikkari (AT&T Wireless Systems), Paulo Teixeira (Aircom International), José Geraldo Almeida (Motorola), Mario Calcagnini (SchlumbergerSema), Adrian Kelly (Logica), Stefan Jelvin (Ericsson), and Alan Hadden (President, GSA) who all presented contributions at the GSA Seminar, plus Ludovic Gaude (Nokia), and Special Guest Dr Richard Downes, Director for Latin America and the Caribbean of the Universal Wireless Communications Consortium.

With GSM well established throughout the Americas, and expected to enter commercial service in Brazil in Q1 2002, the experts explained from their own perspectives how GSM will deliver in the region, including:

-		opportunities to gain revenues from low income groups through prepaid services
-		availability of economic and viable solutions for transitioning of TDMA to GSM, as announced by several TDMA operators including AWS and Cingular Wireless
-		GSM's economies of scale, proven capabilities and performance, and off-the-shelf availability to quickly generate revenues (achieved through open standards, feature-rich, multiple applications already supported)
-		GSM's ability to deliver on services, which is what customers buy, coming form a multitude of platforms; very shortly some 80% of the world's mobile users will be GSM customers, which is what drives applications development
-		GSM's virtually global footprint, and international roaming.

The experts predicted that entertainment and sports services will be at the heart of demand for services in Latin America, with travel information meeting the needs of high-end users. Some uniqueness can be expected tailored for the specifics of the region. Many applications would leverage the phenomenal growth and success of SMS (Short Message Service) worldwide. Applications that can be expected will include TV/quiz shows, and interaction with favourite pastimes including e.g. football and samba. However a clear signal was given to operators to ensure they do not focus on technology, as the name of the game is marketing. That means segmentation, i.e. looking for the customers that operators want to serve, and to provide them with interesting, affordable and profitable applications. It means that operators will need partners with content and who can work with them to deliver the billing procedures. In the new value chain it is important that these partners can obtain their fair share of the revenues.

Availability of GAIT (GSM/ANSI-136 Interoperability Team) handsets was identified as a key element for TDMA-GSM transition, and for de-risking GSM investments. Latin American operators were encouraged to input their requirements to manufacturers to encourage earliest volume supplies.

The near-term availability of EDGE would deliver 3-4 capacity gains for packet services at lowest cost, bringing forward 3G services market access and revenues.

Global Mobile Dialogue™ #5
Paris, September 18, 2001

Theme: Succeed with Applications

Guest speaker: Xavier Blanc, Satama Interactive

The panelists and invited audience of industry analysts, media, and GSA members identified a number of market issues and concerns - particularly with regard to the future creation, branding, and marketing of mobile Internet services. With the first round of GPRS services about to go live in various countries, the GMD™ issued a wake-up call, encouraging the market to switch away from talking about technology and to concentrate on delivering consumer-oriented services.

Guest speaker Xavier Blanc, from Internet consultancy Satama Interactive, opened the proceedings by presenting the key findings from the GSA-sponsored Mobile Portals Survey, published quarterly. The latest survey charts the evolution of WAP services in the United States for the first time, as well as monitoring the regular cross-section across Western Europe - 72 mobile portals are included in total, representing 18 countries. The debate opened up to encompass the breadth and scope of the current WAP-based services offered by Mobile Portals, as well as the implications presented by the imminent advent of GPRS.

The third GMD™ to be staged by GSA this year, the Paris discussions highlighted the fact that the current service offerings follow very similar patterns. The bulk of independent and operator-owned mobile portals are predominantly offering the same mix of individually structured services, which tend to be WAP extensions of fixed Internet web sites.

The gulf between user expectations and the current industry offerings were clearly evident - users are not being clearly sold the benefits and value of GPRS. The message is, that if consumers are to adopt 2.5 and ultimately 3G, it is essential that mobile devices fit simply, easily and effectively into their lives - with applications and services dictating the usage, rather than the technology. There are rare examples of innovative operator approaches - with the key to success necessitating a clear focus on creating market demand and ensuring that sufficient capacity is allocated to deliver the quality of service promised. But there are no different service offerings evident so far on GPRS. Applications developers need to be informed more to appreciate its benefits.

The GMD™ concluded with the observation that mobile portals provide an excellent benchmark from which to draw an understanding of what customers want in future. Operators have access to a wealth of data - about the services users are accessing, as well as when and how frequently. This is the basis for developing the future success of 3G - personalisation, and educating users about the desirability and usability of future services, based on a new service-based business strategy that will involve partnering. All agreed that services must be made simple, i.e. usage and pricing. Operators need to recognise the need to partner with those who can deliver content at the required quality and be willing to share revenues so that all in the value chain may prosper.

Global Mobile Dialogue™ #4
Singapore, April 2, 2001

Theme: Achievable 3G Profit Margins

The fourth in the GMD™ series was held during the last session of the successful GSA regional seminar for Asia "Show Me the 3G Margin". A panel of experts comprising speakers at the seminar were asked their views on three key questions for the industry. The panel members were Wolfgang Groenen, Lucent, and Vice President, GSA; Sanjay Dhawan, Ericsson; David Knapp, Motorola; and Kristian Solberg, Logica. The moderator was Alan Hadden, President, GSA. The audience including several operator representatives contributed to a lively discussion.

Q.1  What are the key growth factors for 3G

Key drivers are the availability of attractive user applications and devices; in the latter case, these will appear with larger screens, fewer keys, and more functionality. PDA's have the potential to serve a huge market for business segments, and also for gaming applications. In the move towards a voice and data-oriented market, 3G delivers higher spectrum efficiency and capacity. Mobile multimedia messaging services are potentially very important as they would be offered exclusively via 3G access. Another key point is the setting of realistic expectations for the consumer, and to deliver. With regards to willingness to pay, research indicates that elasticity differs between countries and between cultures. The important task is for operators to help to create demand. The importance of indirect revenue opportunities was also stressed, e.g. generated from positioning data, and from mobile e-commerce. A very large number of content providers can be expected. Success for GPRS will be a key factor for 3G growth.

Q.2  Transition aspects: will incumbents delay full-scale 3G/UMTS for a few more years?

It was felt that there are pressures, such as licensing coverage obligations, and in some markets, the high fees paid for spectrum, which will ensure earliest roll-out. A more important question is how much capacity will be provided in the initial phase. This will be driven by customer demand and competitive pressures. For example, a greenfield operator is expected to come to market with a differentiating offer to incumbents, while incumbents will need to compete with these new market entrants. With regards to standards, operators need to ask themselves whether to deploy 3GPP Release 99, or whether it would be wise to wait for future releases, in order to decide the best way to protect their respective investments and thus take care of their evolution path. The dangers of delaying market entry were underlined. The availability of handsets is a crucial item for operators. Difficulties which might be expected by some suppliers could be offset by new market entrants, which will include PDA players. However, ensuring correct functioning on all networks, including interoperability when roaming, will be a risk for inexperienced producers as they build up production and testing capabilities.

Q.3  Which are the main 3G profit opportunities?

A paradigm shift is occurring towards future service competition, some services being applicable nationally, and others regionally. Operators can work on a business model assuming they are a "pipe" i.e. "access" supplier, and work out from there. The need to develop creative partnerships, e.g. with advertisers was highlighted. Other opportunities will come from transaction fees for third party services. Inherent 3G security capabilities combined with digital signatures will be powerful for the 3G operator. Although SMS has seen tremendous growth and already delivers important revenue streams, it can also be seen to be in its infancy. 3G brings evolution in the messaging environment and new highly profitable, low cost opportunities. Prepaid evolving to 3G services could also be a basis for new revenue and profit streams. Not forgetting that networks themselves, by evolving to incorporate 3G/WCDMA technology, will deliver higher capacity at lowest cost, thus further improving the bottom line.

Global Mobile Dialogue™ #3
Cannes, February 2001

Convenor Steven Titch reports on the 3rd in the GSA GMD™ series - "Trying Times Ahead"

The third in GSA's GMD™ series took place on 20th February, moderated by Steven Titch, President of Expert Editorial Inc., and Editor-in-chief of TitchOnline.com. An expert panel debated the "Trying Times Ahead" and how the industry is navigating the unfamiliar waters of a bear market, in front of a packed conference room. The panel comprised:

Eric Cariou		Principal Analyst, ARC Group
Eduardo Duato Salmerón		Director, Technology Innovation and Planning, Amena Retevisión Móvil
Alan Hadden		President, Global mobile Suppliers Association
Eric Jensen		Chief Executive Officer, ScoreBoard Inc.
Stuart Sharrock		President, Telemates Ltd., European Correspondent, Global Wireless

In summary, the GMD™ concluded that services and applications more than any other factor will determine the pace of 3G rollout. In a spirited discussion involving the diverse panellists and a responsive audience, panellists agreed that vendors will match their schedules to operator investment plans. Those operator plans are affected by both the current economic slowdown and the general cost of buildout, including the cost of spectrum, equipment, site acquisition and system optimisation.

The GMD™ addressed some of the issues contributing to the downturn in the industry, but concluded that the overall long-term outlook for wireless remains extremely healthy. Current woes, ranging from earnings shortfalls to postponed 3G licences to slower spending, are a short-term "glitch", attributable to the short-term approach of financial analysts and the media, although the effects of the slowdown may linger into the second and third quarter of next year. A slow upturn, however, may begin as early as the third quarter. While 3G will roll out in phases, starting in Japan this year, the experience gained with the introduction of GPRS and EDGE, will lessen the risk when it comes to introducing 3G.

Overall, panellists acknowledged that many of today's "trying times" stem from the dramatic restructuring that changes in the industry are forcing on telecom business models. These are not restricted purely to operators but extend to vendors and representative associations as well.

Global Mobile Dialogue™
Rio de Janeiro, December 2000

Theme: Key Issues for New PCS Operators in Brazil

Summarising the day with a Global Mobile Dialogue™ session at the end of GSA's seminar GSM: Business Opportunities, representatives of the world's leading GSM/3G supplier organisations offered their advice for new operators to enter the exciting market with GSM, which will bring new possibilities to develop the region.

The session concluded with the key issues for new PCS operators in Brazil

-		Be first: efficient planning, network rollout, to be met by choosing the right partners
-		Services and applications: differentiate and use proven GSM platforms and experience
-		Market segmentation: to meet the needs of customers

Global Mobile Dialogue™
Barcelona, October 2000

Theme: Mobile Multimedia - it's what 3G is all about

It would be dangerous to downplay the complexity of the transition period the mobile communications business currently finds itself in. Thought and discussion is required to gain a clear view of the way forward. This consideration was the backdrop to this Global Mobile Dialogue™. The debate produced some insights and even some pointers to the way forward.

The third generation mobile telephony market is not merely a step forward from the second generation market but a qualitatively very different market. For the first time, a mobile communications business is going to be driven not by the underlying technologies but by the applications and services it supports.

Unlike previous telecommunications technologies where the emphasis has been on finding the killer application, with 3G there will be a "cocktail" of killer applications. Because it is to be introduced across the world within a relatively short period, sensitivity will be required to differing cultural and local demands. At the same time, there will be services of interest across the world.

Until now voice communications has sufficed to generate operator profits. That will change with 3G. Operators will need new revenue streams to generate profits as voice is reduced to a mere commodity service. 3G will be something completely new - not just voice plus.

Another significant way in which 3G will differ from second generation is that it will be a consumer market from the start. Hitherto, mobile communications markets have started out by catering for high spending business users and gradually trickle down to the mass market. 3G mobile devices, however, will be for a mass market from the outset.

To be successful, 3G operators will have to be very commercially minded. They will have to find applications quickly that will get the money in fast. The pressure to do this will be all the more so because of the high licence fees so far extracted by some governments in awarding 3G licences. At least as much again is likely to be required to actually build the networks.

So where will the operators find the new revenues? Market acceptance of SMS is a big positive and can be built on. Advertising and sponsorship is one avenue. But the only way that is going to work is if operators can think in terms of content brokering and of what people really want - in other words less like network operators and more like publishers/media enterprises. Vendors have an important role to play here. They could, for example, provide operators with content/service packages which would allow them to differentiate themselves and compete better.

That still leaves the question, where will operators get their revenues from? Operators will become a channel for content provision and content brokering. There is a model for this with the I-mode service from Japan's NTT-DoCoMo, who receives a fee from all transactions over its service.

So if it all boils down to services, which will be the most attractive? Wireless gaming will be popular once device battery life and displays are improved. A potentially popular application may be picture messaging - this again depends on terminal characteristics. Another is find-a-friend, which relies on the availability of reliable, accurate location services. Location will drive many new services. Ticketing is also a potentially very interesting application - whether it be for the cinema or an airline.

If we are to come up with some sort of rule to indicate which applications will be successful one suggestion may be the three P's: Personalisation, Positioning and Push. Personalisation - people want things for them; everything else is just noise. Positioning - having things where and when they want it is a very important part of Personalisation. And Push means that you don't have to overcome peoples' inertia - never underestimate that.

Another key factor in coming up with successful applications will be coming up with more than just information - that's boring. What's needed is information that can be acted on - then and there. Other important factors will be trust, security and convenience, if M-commerce is to really take off. One thing particularly worth remembering is that this is a dynamic process - whatever new services we can imagine now, there will be at least as many again which we can't yet imagine. Another way for operators to generate revenues quickly may be to get others to do the work. Infrastructure sharing could be one way - allow roaming between networks from the outset. Another may be to allow others to sell network capacity - support virtual network operators.

Imaginative thinking is required. It may be tempting for incumbents to assume they know the business best, but they have been known to get complacent - and before they know it, they will lose market share. While incumbents have capital and branding, equity in either can be lost fast!

The main thing is to deliver on expectations. The power of disappointment has been shown by early Wireless Application Protocol (WAP) market experience. It is counter-productive to raise peoples' hopes unrealistically.

If second generation non-voice experiences have been disappointing, however, it has only been because second generation networks were not designed to support them. With 3G this will not be an excuse, however. 3G non-voice services must work from the outset. The focus needs to be on services and simplicity of use, not data rates.

An added bonus this time will be that 3G will be a global development. While previous generations of mobile telephony have at times fuelled technology wars, 3G is about timing - a race to market. Europe has been joined by China, Korea, and Japan in adopting W-CDMA, delivering their populations to global harmonised solutions. WRC 2000 resolved the issue of harmonised spectrum for 3G mobile services globally. The winners in 3G will be those who package and market services best.

The only question remaining is, who will make the most out of the opportunity?

Peter Purton,
Moderator

Industry experts who participated in this Global Mobile Dialogue™ contributing their views were:

Dr Bernd Eylert		Chairman, UMTS Forum (keynote address)
Alan Hadden		President, GSA
Mike Hibberd		Editor, Mobile Communications International
Peter Purton		Editor of Telecoms World and a frequent contributor to the Financial Times
Steve Titch		US-based industry analyst
Rainer Wegner		Ministry of Economics and Technology, Germany