GPRS – Following in the tracks of WAP?
|In 1869 the construction of the first transcontinental railroad was completed when the railroad from the East met with the railroad from the West at Promontory Summit – linking the United States from East to West.|
But as you can see on the photo, the locomotives were already there, they had been there all through the building of the railway, transporting workers, supplies and material to the front line as the railroad tracks were being laid!
Just an amazing five days later the first passenger train service started! Although there had been immense hurdles of all types in the building of the railroad – it only took five days before the railroad tracks were in use – they were merely the transportation method for the train – the train was the service that was marketed and sold to the customer. The prices ranged from first class tickets with stylish service at $111, second class tickets at $80, with a little service and third class tickets without any service worth talking about at just $40 dollars – three different services and price ranges for different types of customers – sounds like innovative thinking!
By now you have probably guessed where I am heading so many years later. You don’t even have to go further back than to the launch of WAP to remember that you cannot market and sell a communication protocol, which is what WAP is, by itself – there has to be services – like a railway train that has a function or use before customers will use a railroad track – or WAP!
Likewise for GPRS to be a success there are three main elements that we believe need to be up and running other than the actual GPRS infrastructure – which has been working for over a year in many countries:
· Content and Services
· Business and revenue models
· Differentiated pricing on GPRS data traffic
So WAP was ovesold. Nobody disagrees much with that. And of course, nobody in their right mind would like to make the same mistake twice, and expect to keep their job the second time around!
Having agreed that WAP was hyped up more than when the USA put the first man on the moon – the difference being that the USA actually did put a man on the moon and WAP actually wasn’t really “The Mobile Internet”, but merely a communication protocol for services that were almost non-existent because there were no revenue sharing models to entice service creators and content providers to create any innovative WAP services.
With the distant memories of the transcontinental railroad with train services in operation five days after completion and the not so distant memories of the launch and poor success of WAP, how are the Mobile Operators doing with their marketing and sales of GPRS?
Before we answer that, lets just recap why GPRS is fundamental to the future existence of the mobile operators. GPRS gives the mobile user the advantage of being “always online” at higher speeds, but only actually paying for the data transmitted and received – not how long it took or how long the user was online. So although WAP and GPRS are two different things, the user experience of WAP on GPRS instead of on GSM / Circuit switch data and the newer emerging technologies like MMS and Java, will be a whole different ballgame on GPRS and will run faster, more smoothly and efficiently and of course – only at the cost of the actual data size, not the time you spend online. Customers should not have to care how content and services actually are transmitted to their mobile phone, what is important to customers are the benefits from services and content and the ease of use – another reason why the focus should be switched away from technologies like WAP and GPRS and over to content and services.
It is important to understand, that teaching the mobile users the many benefits of the two abovementioned main features of GPRS, is what will make users want to buy a GPRS enabled mobile phone – and later on 3G – mobile phone. Not so much by selling the two features or GPRS in itself, but by the new types of mobile services that the users will be able to enjoy with GPRS. Thereby letting operators get on with making money as fast as possible to reimburse the huge investments, they are spending on 3G (UMTS) licenses and infrastructure.
What are the marketing lessons learned from WAP? Not to oversell? Yes, but that is only one of the lessons. Another is that teaching mobile users how to spell WAP is not necessarily going to make WAP a huge success. The biggest lesson has been, that the actual services available on WAP were quite few (mainly due to the total lack of revenue sharing models on offer from the operators), not very innovative and difficult to market.. Add to that the disappointment about the user interface and speed of WAP and it is little wonder that WAP failed.
So back to GPRS – how is the marketing of GPRS and the new GPRS enabled phones going, over a year down the road since the first operators launched their GPRS offerings and many terminal manufactures now have GPRS enabled mobile phones on the market?
Well… suppose that the operators had learned their lessons from WAP, they would be advertising all the great mobile services – yes, also WAP based services – that run on GPRS – how well, smoothly and fast they work and how much time the mobile user can save or how well the user can be entertained or informed by these new services – that is to say – if there were these new, innovative and entertaining services available.!
On the other hand, suppose they had not learned anything from WAP, they would be running the same campaign as for WAP, just replacing the letters WAP with GPRS and the slogan “The Mobile Internet” with “Always On” – because you are now “always on” the Mobile Internet!
Although they basically chose the latter, the marketing of GPRS has been almost non-existent to the extent that most mobile phone owners today have actually no idea whether they should buy a GPRS telephone or what to use it for. There are only few services as the Operators struggle to get their revenue sharing business models in place and of course refuse to even contemplate any sort of revenue share on actual data traffic – something that the South Korean Mobile Operators actually do offer! Some ads for new GPRS enabled mobile phones do not actually even mention that the phone is a GPRS phone and many customers who have a GPRS enabled mobile phone have not activated the GPRS function!
Another reason why the Mobile Operators would profit from getting customers to switch to new 2.5G advanced mobile phones is that our research from South Korea shows that voice traffic actually increases on advanced mobile phones. For example, if you ever did receive an MMS photo on your mobile phone of a grizzly bear actually eating your friend’s tent as you look at the photo, what would you do? Call him of course!
The biggest challenge for the Mobile Operators right now is get content and services available over GPRS and market them, together with the content owners and service providers. Also, the Operators will have to look at differentiating the price of data traffic depending on the type of data service – another thing that already has been implemented with success in South Korea, where the data traffic price for video is cheaper than for example sending e-mails! A few mobile operators have started taking this approach and are starting to focus on services – rather than the actual technology.
All this would add up to GPRS becoming much less important from a marketing point of view. GPRS would merely be the transportation method – not the product.
The latest report from Strand Consult “How to make money on mobile services” a picture of the current & future Market for Mobile Services in Europe shows that in 2005, non-voice ARPU (average revenue pr. user) will account for 32% of the mobile operators earnings and have a total value of Euro 23 billion. Of that, under 2 billion will come SMS based mobile services and the rest from new technologies based on MMS/WAP and JAVA.
The report takes into account the mobile operators sluggish approach to GPRS and those services that will function much more optimally on a GPRS platform and goes through in detail all the prerequisites from all the players in the mobile marketplace that need to be in place, before the new mobile services market really can take off.
Carl Williams is Vice President, Media at Strand Consult and advises National and International Media Companies on how to optimise their Mobile Strategies and make money on mobile services. Carl Williams has worked both in the Media and IT sector.