Study finds trend toward simple wireless services

LOS ANGELES -- Telecom experts generally believe that information on demand and services that increase user convenience and efficiency are more promising avenues than entertainment on a wireless device, according to a new report by the Center for Telecom Management at the University of Southern California (USC) Marshall School of Business. The experts were not optimistic about m-commerce within the next year, citing obstacles like pricing, infrastructure deployment, and the need for new devices as a few of the challenges that need addressing before the potential of m-commerce can be realized.

Further, the telecom experts predict that new products and services that evolve from e-mail, messaging, and voice applications will drive 2003 mobile Internet growth in the United States.

The Telecom Outlook Report (TOR) on Wireless, the latest in a series of industry analyses by researchers at USC, projects 2003 to be a boom year for short message services (SMS) -- text messaging between mobile phones or to an e-mail address -- propelling continued growth of mobile wireless.

The TOR experts said that 34 percent of all SMS would be accessed through mobile devices next year. Nearly 30 percent of multimedia message services (MMS) conveying animation, photos, and audio and video files will be accessed via mobile devices in 2003.

Success of mobile Internet

However, researchers warn that the success of the mobile Internet depends on strategic long-term partnerships between network operators, service providers, and content providers.

"No one company is equipped to offer end-to-end service," said USC's Elizabeth Fife, the report's author. "Partnerships are a strategic component in the development of wireless applications and services that will find a broad market."

Mobile data service must be simple, convenient, secure, and reliable. This entails looking closely at how people use their wire devices today, and extending these behaviors to a broadband environment, reports Fife.

The experts surveyed believe that ring tones, games, chat services, and other amusements lacking productivity benefits are not the keys to mass-market wireless adoption in 2003. The overall global market will move forward with useful and easy services and devices.

According to Fife, "It is the simple kinds of information and communication-based services that still have greater potential over the next year, rather than high-speed data services--including entertainment related services, wireless shopping, multimedia, and video-based services."

Fife adds that the experts do not view third-generation (3G) networks as part of the immediate plan to grow mobile wireless subscription in the United States. The apparent reason is a lack of demand in the United States for mobile communication compared to Europe or Japan, where deployment will likely happen first. 

Unclear about 3G

Still unclear to the experts is whether 3G will provide anything compelling enough to consumers and businesses to justify hefty investments. While successes in Finland, Japan, South Korea, and elsewhere may offer some clues for the U.S. market, the report's consensus discourages too close a focus on strategies and business models that have bolstered wireless markets abroad. Pricing and revenue models are largely not transferable, and American consumer habits and biases are unique.

The Telecom Outlook Report on Wireless advocates a clear need to understand how customers live and use their wireless devices to improve everyday convenience.

The report analyzes m-commerce consumer market forecasts, business models to support wireless data revenues, the enterprise market, device connectivity, international comparisons, and wireless network infrastructure. It is published by the International Engineering Consortium (IEC).

Impact of September 11

Last August, Fife authored another report on the impact of the September 11 terrorist attack on the telecommunications industry. She studied corporate travel and the use of video-conferencing as a substitute for travel. In her report, telecom experts said that electronic communication like video-conferencing was not a viable subsitute for face-to-face interaction. "Travel on a national and global basis was predicted to dip temporarily, but was expected to retain its importance for the conduct of business," Fife said.

USC's Center for Telecom Management is the world's only research and education institute within a top-ranked business school devoted to the networked digital industry and the customers they serve.

Fife is Research Fellow at the Center for Telecommunications Management (CTM), Marshall School of Business, University of Southern California, and Editor of CTM’s annual Telecom Outlook Report. She received her Ph.D. in International Relations from the University of Southern California. Her research on innovation and IT issues in the Race and Esprit programs of the European Union is being published in her forthcoming book, “Building Knowledge Networks in the European Union” by Ashgate Publications.