Original URL: http://www.theregister.co.uk/2006/10/13/nokia_t-mobile_usa_mobile_web_2/

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

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By Wireless Watch

Posted in Mobile, 13th October 2006 00:21 GMT

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.

Nokia WidSets

Nokia would disagree with T-Mobile about the potential of mobile TV, but will certainly be eyeing part of the carrier's business in its 3G and Web 2.0 activities. The most advanced handset maker in its grasp of these emerging ideas, the Finnish giant has launched a framework for automatically feeding content to handsets and other devices - "bringing Web 2.0 to your mobile device", as Tom Henricksson, director of Nokia's Emerging Business Unit, puts it.

The WidSets technology delivers functionality more commonly found on PC-based systems, where internet behavior is increasingly user-driven, collaborative and community focused.

A key aspect of Web 2.0 is the web site that searches out and amalgamates content from many other related sites, and this is the main aim of WidSets. "It goes to other internet sites and gets feeds from them, but [users] determine what internet services they want to have visible on your phone," explains Nokia. WidSets allows users to build a content library that may include RSS syndication feeds, blogs and photo upload sites that are multicasted to Javaenabled devices.

It updates selected content and forms a 'symbiotic' relationship with the web to allow both the device and the web to work together, explains Henrickson. "You have exactly the information you are interested in, but in a cost-optimized way on your handset," he added.

This is another breakthrough that builds on many of Nokia's recent obsessions. Web 2.0 plays to the advantage of such vendors in that it puts the focus and intelligence on the network itself, and the user interface/browser, rather than the server (something of which Intel, with its wireless strategy, has been highly aware). So Nokia has been working on developments such as more intelligent and mobile-friendly browsers, in its joint development with Apple, and on 'human centered' design for its next generation of 'multimedia computers', as it now calls its most advanced handsets.

This means allowing the handset to go a step beyond the role Nokia assigned to it a few years ago, of being a single hub connecting a user's whole lifestyle from work to digital content to communication; and becoming the key tool for a user's full participation in the virtual community.

In terms of applications, Nokia sees location awareness as critical to social networking, and is working with a widening selection of Web 2.0-oriented software houses. These include embedding the Flickr client in the Gallery application on some handsets, and working with MySpace. As with Web 1.0, though, most early players are struggling with ways to monetize their investments, and Nokia is no exception.

WidSets should appeal to end users and enterprises, providing a single Java dashboard for all content and the ability to create or suggest their own widgets to enhance the platform. But the company admits it is harder to work out how to generate revenue from this, beyond a hoped-for boost to handset sales - though advertising is an obvious option.

Nokia will also need to decide on whether to collect this revenue itself or leave it to cellcos to do. It has recently - with the launch of its own music download store, for instance - showed signs of wanting to provide content and Web 2.0-style services directly, under its own brand, partnering with companies like Yahoo but sidelining the role of the cellco as content provider.

The balance between vendor and operator brands, and the position of both in the increasingly complex mobile value chain, are two of the ongoing critical themes of the current telecoms world, and Nokia will be hoping that its Web 2.0 weapons strengthen its own bargaining power.

The focus on such concepts not only aims to keep Nokia in its number one spot for mobile devices but also to accelerate its shift towards software, rather than hardware design, as its key differentiator. Software platforms can be licensed, where appropriate to the vendor's model, and their elements can often be developed once and adapted to different markets, such as enterprise and consumer.

They also create a far larger barrier to entry for challengers than handset design on its own - an area where Nokia has made various missteps, such as ignoring the clamshell for so long, and where the whole sector is subject to constant leapfrogging, with associated spiralling R&D and design costs.

Jarkko Sairanen, VP of corporate strategy, said in an interview: "In the short term we'll make money from selling devices... whether that will be changing over the coming years remains to be seen."

Copyright © 2006, Wireless Watch

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