Although wireless companies are banking on third-generation (3G) wireless systems to catapult them into new markets, new business models, not new technology, will drive wireless growth. According to a new Report from Forrester Research, Inc. (Nasdaq: FORR), carriers must leverage simpler infrastructures with the power of the Internet to drive mobile eCommerce. To profit from mobile eCommerce, carriers need to develop new partnerships and pricing models in order to deliver highly relevant and action-oriented content to mobile users.
“Carriers have it all wrong,” said Mark Zohar, senior analyst in Public Network Research. “They are readying to make significant investments in 3G infrastructure before they figure out the applications and business models that will drive future growth and profitability. Customers want thin, mobile, and simple applications that are personalized, action-oriented, and location-relevant.”
To enable mobile eCommerce, carriers need infrastructure upgrades to enhance the data capabilities of existing cellular networks. Forrester believes, however, that these advances can be achieved without 3G technology, as there is no market for real-time videoconferencing applications or multimedia services on mobile phones. In addition, 3G involves forklift upgrades of entire networks with deployment costs in the billions of dollars.
Mobile eCommerce will evolve over the next three years as providers enhance their data capabilities and migrate from pure voice services to mobile information and, ultimately, mobile eCommerce. Smart carriers will partner with innovators to deliver compelling content to mobile users while unrestricted and open access to the Internet is ensured. These carriers will also pursue new partnerships and distribution channels to leverage the brand and reach of online content providers. Since carriers don’t have the experience or core competency to provide and support mobile Internet services on their own, they will partner with mobile data specialists for service bureau functions, customer support, and Web-based technologies.
In addition to developing new business partnerships, carriers will focus on usage and location-based services — versus content — to flourish in the mobile eCommerce market. With average revenue per user leveling off, carriers will benefit from bundling new mobile data services with voice services. Mobile data services will allow carriers to differentiate their offerings and increase customer retention rates as customers personalize Internet content and services for their phones. As demand for location-based services takes off, carriers will find new revenue sources in charging customers and content providers usage fees for accessing these services.
“Business travelers will be the early adopters of new mobile data devices and services, because they value mobile access to critical information,” added Zohar. “To attract and retain business travelers, carriers should comarket and distribute new Wireless Application Protocol phones and develop travel-focused content such as flight updates, hotel scheduling, and driving instructions.”
For the Report “The Dawn Of Mobile eCommerce,” Forrester interviewed 12 of North America’s leading wireless carriers and found that 50% of respondents consider 3G technology very important to the growth of their companies, while 83% have not determined pricing and billing for advanced mobile services.