Wireless Carriers face Challenges Moving to Data World
The wireless industry has a big job ahead making an effective transition from the voice world to taking advantage of data and new services, wireless industry officials said late Fri. in a panel at the Consumer Electronics Show in Las Vegas.
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“To make a product work… you have to make it simple and compelling,” said Dan Kranzler, chmn. of Mforma and a former manager at McCaw Cellular during the start of wireless service. “We have not been that successful in wireless in getting the technologies to work right and the content to work right to have something that’s really simple and compelling for our users.”
For the first time wireless customers are showing willingness to use their phones for something besides talking, and carriers have to be ready to respond, Kranzler said. The key is ease of use, he added. “I can get 5,000 different ringtones for my Verizon phone or I can get 1,000 different games,” he said. “I bought this device for simplicity, for convenience. I'm not going to wander through 1,000 games to get a game.” Kranzler said 3G networks will allow consumers to use their phones differently and avoid dropped calls, but he questioned how much time users will want to spend using mobile devices. “The average mobile user wants to have an experience in between 30 seconds and 4 minutes,” he said. “That’s it. If I can’t get the experience started in 3 1/2 minutes it doesn’t help me.”
Tim Eckersley, senior vp, Nokia Americas, said the wireless industry faces challenges similar to those of the industry’s early days in convincing subscribers they can use their phones for data as well as voice. For example, he said, wireless carriers have yet to explain to most subscribers in a way they understand the value of the cameras that come with many phones.
“In the early days of wireless it was about convincing end-users that they could make phone calls using something other than a land line,” Eckersley said. “We have much of those same issues still in front of us. The fact is that more than 60% of devices that were sold in N. America in 2004 had cameras in them, yet we find that most of the users are not using those cameras.”
Virgin Mobile CEO Dan Schulman said carriers need to make certain they're offering customers the products they really want at the right price. “What is the experience of the application?” he said. “Consumers may want to download music straight to their phone but if it takes them 10 minutes to download a song then they don’t want to do it even if the cost is 29 cents. You've got to basically take a look at what application do they want, what is the experience and what is the pricing.”
Schulman said giving customers what they want can take advantage of extremely simple technology, such as the “rescue ring” Virgin offered to its youthful audience. The rescue ring allows a subscriber, for example, on a blind date to set the phone to ring at a given time to provide an excuse to escape.
“It was the simplest of technologies -- you didn’t need a high speed network,” he said. “But we found a unique switch to what was existing. The experience was good. It met a need that our customers had. The pricing was negligible.”
Jim Straight, head of data for Verizon Wireless, said data service is starting to take off for more than just the youth market. “Today there’s 170 million mobile phone users in the United States,” Straight said. “At Verizon Wireless alone one out of 3 of our customers is using data services. The last month alone we did 10 million downloads and these are games and different types of applications. We're seeing photos sent by the million. We're seeing text messages. We're seeing business users.”