Wireless Internet and, increasingly, wireless portals are the new breed of value-added services that mobile operators are turning to as a means to differentiate services and increase revenues - and they are not alone. Terminal suppliers, ISPs, content providers, financial services companies, big brand retailers and many more, are all jumping on the bandwagon. However, market consolidation and the rise and fall of techno-savvy dot coms create uncertainty about who will lead this market and whether or not the consumer will pay. In a new report from independent research and consulting company Ovum, current and potential players are advised to develop wireless portal strategies and partnerships now - focusing on the core aspects of place and personalization.
"As the mobile market transforms, wireless portals will expand the use of the Internet, making it an `anytime, anyplace' phenomenon," says Eden Zoller, Ovum senior analyst and author of the report Wireless Portals: Business Models and Market Strategies. "Users will be able to access services and content that leverage the unique features of mobility, such as location, that fixed Internet portals can not provide."
Ovum finds that various types or organizations are vying for a piece of this market, each with its own unique value proposition and inherent challenges. For terminal suppliers, wireless portals mean a market for smartphones and other advanced Internet ready terminals. For ISPs and content providers, wireless portals mean a new value-added service for both existing subscribers and new customers, especially cellular users that do not subscribe to their services. Software vendors like IBM, Microsoft and Oracle will also take advantage of this new market to make mobile Internet part of their end-to-end solutions.
The appearance of new players in the wireless market will dramatically change the existing supply and the concept of customer ownership. As the wireless portal market matures, old notions of a single service provider owning the customer will be replaced by a case of `who does the customer want to own' or buy into.
The report is quick to point out that partnerships are key. "No single organization in the supply chain can offer a full portfolio of wireless portal applications and services on its own, " confirms Zoller. However, for some operators, building a branded wireless portal is not the best option. Such portals require a strong brand presence, high level technical expertise and financial resources to build and market. For some operators it will be best to concentrate on their core competencies and act as a facilitator for other service providers.
Ovum notes that established fixed Internet portals such as AOL, Yahoo! and MSN are in a strong position. They are experienced content aggregators with well-known brands, good distribution channels and subscriber relationships in the fixed Internet world.
A major question the industry must ask itself is: are users willing to pay for wireless portal services? According to Zoller the answer is yes, but only for high-value services where the benefits and enjoyment outweigh the cost. Generic content like weather and news reports will become a commodity and service providers must add value through personalization, packaging and by linking content to location, e-commerce and advertising. "Context, not content, is king," observes Zoller, adding that service providers must set realistic expectations of what wireless portal applications will achieve. Additionally, while technologies such as WAP, and platforms such as Bluetooth, create multiple options for vendors, upgrades to existing networks and the move to 3G are still the most crucial enablers of wireless Internet.
Ovum predicts that global revenues for wireless portals will grow from $747 million in 2000 to $42 billion in 2005. Revenues will initially grow slowly, but accelerate from 2001 onwards when operators upgrade second generation and start migrating to third generation systems. A breakdown of total revenues shows that advertising, placement fees, e-commerce and content subscriptions will reach close to $17 billion in 2005. Operator revenues from wireless portals, comprising call stimulation, access charges and subscriptions, will be worth $25 billion in 2005.
About the report
Wireless Portals: Business Models and Market Strategies is available from Ovum now and costs $3695, (pound)2095, (EURO)3355 or A$4995. Authored by analysts Eden Zoller and Dan Ridsdale, the report includes business models, forecasts and market scenarios for a wide variety of organizations formulating Wireless Portal strategies. For further product information contact Ovum at (800) 642-OVUM or visit www.ovum.com.
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