Research Notes

The retirement of WAP services

The Birth Of The New 3rd Generation Mobile Services Will Hopefully Make Very Proud Grandparents Out Of The Traditional WAP Services.
For grandparents it is a big event in their lives watching their grandchildren arrive in the world and the older generation often hope that the new generation will have better conditions in life than they had themselves. Soon the traditional 1st generation mobile services will become grandparents to the new 3rd generation mobile services and there is a good possibility that the new mobile services will have better growth conditions than the older services had when they originally launched. But there is very good reason for the young and inexperienced to learn from the older generations’ experiences – and mistakes!

It is both interesting and a challenge to be the first to try something nobody else has ever tried before, but being a pioneer is seldom easy. In the same way the mobile operators’ launch of their 1st generation mobile services was both enthusiastic and exciting, but that did not mean that the launch was easy or successful.

Amongst the 1st generation mobile services were the first WAP services that the mobile operators, maybe with a little too much pioneer spirit – mistakenly announced as the new mobile market revolution even before they were launched. The mobile users had therefore enormous expectations towards these new WAP services. The lack of good business models ensured however that the launch of WAP services around the millennium were nothing less than a flop.

However much has happened since the early mobile services pioneering days and those first WAP services are now in the process of becoming “grandparents”. The mobile value chain is in the process of handling a hopefully successful launch of 3rd generation mobile services.

Basically the first three generations of mobile services differ in the following ways:
1. Generation mobile services: No integration with the mobile operators’ internal systems.
2. Generation mobile services: Integration with the mobile operators’ billing systems.
3. Generation mobile services: Integration with the mobile operators’ service platform environments.

The most distinctive characteristic of the 1st generation mobile services is that they are in no way integrated with the mobile operator’s internal technical systems. The mobile operators solely distribute the content providers’ mobile services via their mobile network; apart from that the content provider is independent of the mobile operator. This also means that the content providers’ 1st generation services are not integrated with the mobile operators billing system, so end-users cannot be charged for their use of services via their telephone bill. The lack of integration with the operators’ billing system was one of the biggest reasons as to why WAP services did not become a success when they were launched. The lack of ability to charge for the services meant that the content providers had no financial incentive to develop and market attractive WAP services and without that incentive WAP did not stand a chance.

2nd generation mobile services became a reality the moment the content providers were able to sell mobile services via the operators billing systems. Being able to bill created the possibility for content providers to have an attractive financial business model in connection with developing and marketing mobile services, which became especially apparent in connection with for example the still increasing markets for Premium SMS services and i-mode services.

For both the mobile operators and content providers, the integration between mobile services and billing is however only the first step in the integration between the mobile operators’ service platform environments and the content providers’ mobile services. It is also widely agreed that the future success of the 3G network is dependent on a much larger integration than simply being able to charge customers for use of services!

The 3rd generation services of the future will therefore be characterised by having a very close integration between the content providers’ mobile services and the mobile operators’ service platform environments. The mobile operators’ internal service platform environments will consist of a great number of different service platforms that will handle for example customer identification, location, e-mail, wireless Instant Messaging, gaming, streaming, roaming, DRM, financial transactions, billing etc. Having access to these service platforms will give the content providers enormous possibilities to develop much more advanced and user-friendly mobile services – which is very necessary if 3G users are to increase their use of mobile services.

In other words the success of the launch of 3G networks is directly dependent on a successful launch of 3rd generation mobile services – and vice versa!

Strand Consult has just completed a new report that analyses in depth precisely this important interaction between the service platform environments and the next generation of mobile services. The new report ”How to get success in the 3. generation VAS market”, is directly focused on a great number of the essential challenges that the mobile market is facing in relation to the importance of the service platform environments for the continued expansion of the market for mobile services. The report contains an in depth analysis of 10 different existing service platform environments with specific focus on each platforms advantages and disadvantages. This is especially interesting as the complex service platform environments will be the backbone in connection with developing, producing, delivering and marketing the future 3rd generation mobile services.

Both content providers and mobile operators have learnt a great deal about developing, producing and marketing mobile services since the launch of the 1st generation mobile services. These experiences will help ensure that the 3rd generation services have an easier growth than their grandparents – because the first WAP services had an unnecessarily tough childhood. It is especially up to the mobile operators to ensure that the content providers have a strong financial incentive to develop new and advanced third generation mobile services. Without that incentive we could loose two generations – 3rd generation mobile services and 3rd generation mobile telephony.

the 3. Generation Value Added Service Market

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