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Nokia and T-Mobile USA pin their hopes on mobile Web 2.0

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Analysis The US cellcos, traditionally behind their Asian and European counterparts in advanced mobile trends, are making up for all that by being the first truly to embrace the mobile internet and Web 2.0.

This could, ironically, provide a major opportunity for that most European of vendors, Nokia, which is leading the charge to bring Web 2.0 ideas and behavior to the mobile platform, and sees its developments as an important weapon in its battle to improve its US performance and spread its wings into new operator bases.

Perhaps because they have always been the laggers in rolling out specifically cellular data and content services, the large US carriers have been far quicker to take on concepts from the PC/open internet world.

The Japanese and Korean operators have more advanced content, but have clung to their walled gardens; the Europeans are still looking to define 'pre-4G' content in terms ofthe specific capabilities of their 3G technologies, and to embrace open platforms like Wi-Fi only grudgingly.

It is left to Sprint Nextel, and now T-Mobile USA, to lead the charge to turn the internet model to the commercial benefit of cellcos - rather than fending it off for as long as possible like their European neighbors and so risk being swept away by a new breed of operators coming from the wireline or media worlds, with their own wireless internet services based on WiMAX and Wi-Fi.

Sprint Nextel has talked at length about supporting a new generation of services and functionality with its parallel EV-DO and WiMAX roll-outs, and has a grasp, unusual, among cellcos, of the potential ARPU and customer retention boost that could come from playing to emerging consumer trends such as usergenerated content, social networking and other aspects of socalled Web 2.0 that are now gaining strength on the PC platform.

T-Mobile’s 3G plan

If Nokia is the most advanced of the vendors in appreciating how to extend Web 2.0 from laptops on to cellphones and other mobile devices, Sprint has been the flag waver among operators, particularly with its plans to support a wide range of client platforms, such as music and TV players.

Now T-Mobile USA is bidding for the crown too, with some details of its plans for its newly acquired AWS spectrum for 3G-plus. As in Europe, T-Mobile argues that it has been better to wait to launch 3G when the market is ready, rather than be first to market and get caught up in the inevitable wave of hype and disappointed expectations (of course, in the US it also had the small problem, until last month, of entirely inadequate spectrum holdings for a national 3G roll-out, and had fallen back on strong customer service in 2G, and convergence with its extensive Wi-Fi hotspot network, to retain differentiation).

Now that T-Mobile is poised to build a nationwide UMTS system, it says it will focus its 3G services firmly on Web 2.0 applications such as MySpace and YouTube. It will spend nearly $2.7bn on the network roll-out, in addition to the $4.2bn it laid out on AWS spectrum in the 1.7GHz and 2.1GHz bands.

As at Sprint, next generation devices with multiple media capabilities will be important, and in outlining the plans, T-Mobile USA CEO Rob Benotton pointed to Apple's new Leopard operating system as an example of the platforms that would underpin mobile Web 2.0.

"As can be seen with Apple's new Leopard operating system, the richness of email communications is just beginning to discover elements beyond the printed word, moving to dynamic and personally tailored image-rich communications," he said, sparking speculation that by singling out Apple, T-Mobile was hinting at an imminent deal to offer an Apple 'iPhone' device.

T-Mobile International's CEO Rene Obermann said: "We're looking at the area of user generated content, where we could leverage or basically mobilize the trends which we can see on web sites such as MySpace, YouTube or others, as well as data management scenarios and consumer mobile email."

The German-owned operator is keen to avoid one trap - trying to change consumer behavior rather than appealing to the way that users actually want to work and play. This makes T-Mobile more sceptical of mobile television than Sprint, since it believes that watching television on the move is as unproven as a behavior as many stillborn 3G applications.

Instead, Obermann believes applications like MySpace reinforce existing user habits and would transfer entirely naturally to mobile operation. "We want to leverage existing behaviour. When it comes to mobile music and TV, I wouldn't consider them big revenue generators," he told journalists. Of course, the other challenge for T-Mobile will be to avoid another mistake of early 3G players and, more recently, MVNOs - that of ignoring the importance of low cost voice in favor of the latest gimmicks.

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