GAMES AND MUSIC SAID TO BE BIG WIRELESS OPPORTUNITIES

One U.S. wireless carrier alone generated more than 10 million min. of air time through wireless games in first 3 months it offered games, Goldberg said, and “tens of millions of dollars of revenue” annually were being generated: “That’s a lot of air time.” He said min. per user per month were higher for wireless games than for any other application.

Wireless “will be an incredibly exciting way to deliver music and content” once higher speed networks, such as 2.5G and 3G, are available, Diggins said: “The opportunities are absolutely astounding.” Some of services can be financed through location- based ads, he said, but it also will be easier to check that users pay for music because it will be easier to protect copyrights as content passes through wireless switches.

Even though current low-data-rate networks can’t handle streaming audio, Diggins said music artists and wireless companies should begin partnering for text-based services, such as fan messaging: “Now is the time to do it with text. Get into the game any way you can.” At very least, Diggins said, starting text-based services can allow companies to begin creating databases of potential customers and even generate some revenue. Goldberg agreed wireless would be attractive delivery method for music once 3G arrived and said music could even be incorporated into wireless games.

New uses for wireless won’t be limited to teenagers, speakers said. Digital Bridges CEO Kevin Bradshaw said biggest users of wireless games in London were taxi drivers, and Diggins said long distance commuters in Japan also were big users. Goldberg said statistics showed that adults 25-44 devoted more wireless time to games than did teens and said that wasn’t surprising because they had more wireless phones. -- Michael Feazel

CTIA Notebook…

Ecuadoran wireless carriers are awaiting govt. decision on which bands country will use for 3rd generation wireless services following report released by telecom regulator last week on IMT- 2000 feasibility, Carlos Blanco, pres., BellSouth Ecuador, said at Latin American Conference at CTIA Wireless 2001. “The spectrum [choices] we are talking about are very clean so we are not going to have problems implementing” final decision, Blanco said. Citing recent economic hard times in Ecuador, he was less bullish on immediate prospects for 3G there than his counterparts elsewhere in region. Wireless penetration in country is 4.5% and Internet penetration is only 1%, Blanco said. Due to economic crisis, Ecuador hasn’t been as aggressive in opening its telecom markets as its neighbors in Latin America. Blanco said one alternative for smaller countries such as Ecuador was to rely on 3G platforms used by larger countries in region to provide services. Meanwhile, Carlos de la Rosa, vp-planning and coordination for Brazil’s Telefonica Celular, stressed importance of continuing to focus on prepaid subscribers, even when offering high-speed data services through 3G. He also suggested operators could blur line between postpaid and prepaid services by tailoring offerings to way different groups actually used service. “Clients are going to pay for what they use and not the connection,” he said. Several speakers said that despite future of wireless data in region, voice would continue to be important, particularly as mobile provided first-time phone connections to broaden telephony access in some underserved areas.

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AOL believes market for wireless data devices is just beginning to take off, said Frank Sandtner, AOL vp-gen. mgr.- mobile communications. He said there were 6 million wireless data devices in 2000, but figure was expected to grow to 67 million by 2004. AOL rolled out its AOL Communicater wireless data device in Nov., he said, and early results are good. Device handles only e- mail and instant messaging because AOL’s business plan is to focus on simplicity, Sandtner said. Targeting same wireless data market, Kyocera showed prototype of wireless phone with full Palm functionality at show.

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Churn remains significant problem for wireless industry, Telephia consulting firm said in new report. Its initial results showed that 27% of wireless customers had changed service within last year, including 12% who switched to new provider and 15% who dropped wireless. Churn rate varies significantly among markets, Telephia said, ranging from 8% switching carriers in L.A. to 16% in Dallas. Separate Telephia study showed wide differences in wireless penetration among 10 largest U.S. markets, ranging from 36% in L.A. to 48% in Boston. Overall average penetration in large markets was 40%. Figure still was well below 70-80% penetration in Europe, indicating there’s “still a tremendous opportunity for growth in the wireless voice industry,” Telephia Pres. John Oyler said. ----

Number of CDMA wireless customers topped 80 million by end of 2000, CDMA Development Group announced here, and Exec. Dir. Perry LaForge said opportunities for growth would continue with 3G deployment in Americas and Asia-Pacific region. Biggest growth in last year was in Latin America, where CDMA was up 193% to 15 million customers, group said, with 74% gain in N. America to 29 million and 28% in Asia to 35 million. Group also said it completed work on algorithm for voice encoder for cdmaOne and CDMA2000 systems.

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While mobile subscribers in China are expected to increase 45-50 million annually in next several years, wireless data services such as Wireless Application Protocol probably will take relatively small slice of new subscriber numbers, Desmond Shum, CEO of China’s CNwireless Consulting, said Mon. Speaking at CTIA China Conference at group’s show, he attributed low expectations for mobile data use to current lack of business model for such services. Still, as broadband access grows in China, more Internet users are expected to access Web through wireless devices, Shum said. Because western part of China has experienced faster economic growth than more rural eastern region, demand for broadband access is expected to increase faster in latter, he said. Number of mobile subscribers jumped by 42 million in China last year, representing 1/8 of wireless users in world, although country still has overall penetration rate of only 6.7%, he said. Subscriber base in China is forecast to reach 130 million by year-end, he said.

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Leap Wireless said it agreed to buy Backwire and Spotcast Communications, price undisclosed. Backfire publishes customized e-mail newsletters and one-to-one content. Spotcast developed technology for personalized mobile media delivery service. Leap said it would incorporate both into its location-based myAladdin wireless technology, which it acquired in Dec.

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About 3/4 of wireless customers are “generally satisfied” with their service, but only 41% said they are “very satisfied,” Yankee Group reported in mobile user survey. Firm said results showed that wireless carriers were “not blowing them away” with quality of service. Overall, Sprint PCS, Verizon Wireless and AT&T Wireless got highest customer satisfaction ratings, study said -- www.yankeegroup.com.

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Technology Notes: (1) Lucent said it installed Sun Netra Compact PCI servers for its Internet protocol services as part of $500 million deal announced in 1999. Servers also are to be key part of Lucent transition to switching center for 3G services, it said. (2) Cellphone capable of handling MPEG-4 streaming video was demonstrated by Emblaze Systems, formerly GEO Interactive Media Group. First deliveries are to be in Asia and Europe, with U.S. deliveries later, company said. Samsung-built phone is compatible with 9.6 kbps data rate and can provide improved video as 2.5 and 3G systems with higher data rates become available. (3) IBM will be main provider of embedded software for Intel chips for wireless devices under new contract announced here. Among software is to be IBM’s WebSphere. Terms weren’t disclosed.