tma/blanko/23.10.98/1

Blanko ‘98

The role of contentin the future of mobile operators

Timo Ahomäki

Sonera Ltd

tma/blanko/23.10.98/2

Agenda

Background Service examples Identifying and positioning content for mobile use The business models Developing partnerships and co-branding Issues in customer care Conclusions

tma/blanko/23.10.98/3

Background First there was voice... The growing penetration opens new possibilities

The general concept of VAS includes anything from voice mail to electronic commerce

Content services are the latest form of VAS Huge success of SMS is a key driver New enabling technologies ranging from WAP to UMTS

are bound to explode the market

Content services will play a major role in the future success of any operator

tma/blanko/23.10.98/4

Service examples: Billing info

Typical “telephone company service” Current GSM bill balance using short messages

Configurable: Itemised/non-itemised Available for Nokia TTML and standard phones

Priced at FIM 0,99 / query Alternative to a free IVR system Extremely popular and growing

tma/blanko/23.10.98/5

Service examples: Textus

WWW-based general interest services Weather, lottery, teletext, jokes, etc. Available for Nokia TTML and standard phones

A flat fee of FIM 1,89 / search Agreements with the content provider are

required for copyright reasons Popular and growing fast

tma/blanko/23.10.98/6

Service examples: Weather

Content provider: Weather Service Finland Local weather forecasts using short messages

450 towns in Finland, about 50 abroad Available for Nokia TTML and standard phones

Extension of WSF’s WWW-based service Priced at FIM 3,50 / search

WSF earns about FIM 1,50 / fetch

Launched in June and growing steadily

tma/blanko/23.10.98/7

Identifying content for mobile use

Content should be useful but not too expensive Entertainment always seems to be a good bet

Jokes, horoscopes, etc.

Users appreciate good value even at higher price Weather Service Finland, Railway timetables, etc.

Sonera has a bias towards “useful” services Expensive entertainment services can be risky Ideally, some sort of barring facility is required

tma/blanko/23.10.98/8

Positioning content to market

Three basic categories Operator services: Billing info, directory, etc. General interest services: Jokes, weather, teletext, etc. Content provider products: Weather, banking, retail, etc.

A single service may have instances in many categories. (e.g. WSF) The subscriber needs a way to identify the

“price class” of a particular service

Migration between categories is natural

tma/blanko/23.10.98/9

Two possible business models

The traditional telephony model Earning logic is based on the premium-rate telephony’s

“pay-per-view” model Operator intensive, easy on small CPs

The traditional internet model Earning logic is based in monthly fees and/or advertising Operator’s role is smaller, CP’s role is greater

A hybrid of the two?

tma/blanko/23.10.98/10

Billing issues

Business model has big impact on billing complexity really cool applications are usually impossible to bill

The premiun-rate telephony model seems to work Platforms seldom support premium-rate SMS Lots of improvisation required to make working solutions

WAP brings huge challenges to billing Start simple, compromise on fine detail and

concentrate on quality and reliability

tma/blanko/23.10.98/11

Who owns the customer?

The entity that bills the subscriber? Operators traditionally strive to gain control

through billing The times are changing...

Sonera has adopted a mixed model: CPs own their services and market them independently Sonera bills the subscriber on a “pay-per-view” basis CP’s are free to use any other type of earning logic

Customer ownership is split between many parties

tma/blanko/23.10.98/12

Partnerships

An operator can not develop a complete service portfolio alone

A content provider cannot develop a successful service with just one operator

A one-to-one partnership may not be enough!

All parties may need to compromise their individual ambitions in favour of a successful package

tma/blanko/23.10.98/13

Co-branding

Co-branding may be an efficient method to get started with new types of services Requires some form of risk/revenue sharing

Successful arrangements go way beyond joint marketing efforts

Co-branding seems to suit best for generalinterest and very specialized services

tma/blanko/23.10.98/14

How big will it be?

Estimates range from moderately big to enormous! UMTS will eventually change the way we think

about mobile services UMTS will not necessarily be a revolution business-wise WAP and GPRS offer a smooth growth path towards UMTS

Content business is still in it’s infancy Everybody is trying to learn how to do it Those who are afraid of making mistakes will fail

tma/blanko/23.10.98/15

Conclusions

The future looks bright but the business opportunity is there now Users are interested in information services Users are prepared to pay for useful services

Service creation is 10% technology, 90% business planning

Start early, progress in small steps, make mistakes