MOBILE INTERNET/COMMERCE/WAP

The ‘i’ in "i-mode" stands for ‘information’. However, in Japanese it also implies "anywhere". Though I would prefer to call it the "intelligent mode", simply put it means "Internet-mode" for mobiles. Japanese are known to derive the best out of a technology and make it almost a daily necessity—not just a gizmo or gadget. Similar is the story of "i-mode", the new avatar of mobile phone in Japan.

NTT DoCoMo launched "i-mode" in February 1999, and if its 7.3 million subscribers are any indication, it is more than successful. A careful study of the service shows how a technology can be quickly adapted to meet a growing consumer need. Everyone is talking about how mobile and Internet are affecting our daily lives. And the sooner the two come together the better it will be.

A large majority of Japanese families still cannot afford PCs at home due to space, cost, and other limitations. So "i-mode" provides a very convenient method of not only gaining access to the Internet, but also exploiting the tremendous opportunity thrown by e-commerce, better called the "m-commerce" (or mobile-commerce) in our context.

Instead of paying for airtime like in voice calls, users pay only for the data sent and received, and for services subscribed which are offered by now around 500 providers in Japan. The list of "i-mode" content providers already reads like a "who’s who" of Japanese leading businesses. DoCoMo charges users roughly ¥1,200 per month to access the service, with each e-mail message of 250-260 characters costing roughly four cents. More significantly, DoCoMo collects nine percent as commission for handling billing on behalf of i-mode’s official site operators. Keji Tachikawa, CEO of DoCoMo, estimates that a user base of five million will generate around $1.5 billion in fee from subscriptions, transmitted data, and its nine-percent commission.

Popular services include mobile banking (like Sanwa and Sakura banks), stocks and shares (like Daiwa Securities and Nikko Securities), credit card transactions, news, and yellow pages (from NTT itself)). Quite predictably, the two most popular services are the games and karaoke information.

The key thing is also the simplicity of usage. The user activates the service by pressing a special "i-mode" button on the handset. The connection is continuous (until the handset’s battery needs re-charging) and the menus are also easy to navigate—it takes only two clicks to obtain the latest share price.

Operators could match DoCoMo’s success by implementing its service model, which charges both users and content providers for using the Internet over an existing mobile telephony infrastructure. However, if the users find a service difficult to use, the network operator is likely to suffer, i.e., if new content service truly differentiates network operators, bad content could increase churn.

The m-commerce opportunities are immense and are everywhere. Your cell phone becomes your personal ATM, allowing you to check the balance and transact. It can be used to know the latest entertainment in the town and book tickets for your favourite shows. You need not hunt for your secretary desperately to book air ticket and hotel for an unexpected business trip. "i-mode" makes your cell phone your 24-hour real-time travel agent. If you are new in the town and you need to find a good restaurant, "i-mode" acts your guide. Not only that, it even helps you book your table there. And the special discounts once in a while are a bonus.

The basic needs that generally drivers m-commerce are:

• the need to purchase quickly (like train tickets) while mobile
• the need to buy merchandise (like gifts) in free moments in otherwise a busy day
• the need to conduct time-critical financial transactions such as transferring money between bank accounts, paying bills, or stock trading

As life gets busier leaving little time for shopping, and given the fact that access to PC/Internet may not be easily available all the time, m-commerce appears to emerge as
convenient tool. And so is the m-Internet (or m-Net) for information, learning, entertainment, etc.

In effect, "i-mode" operates as a packet-based data service running over DoCoMo’s PDC network utilizing a system developed by DoCoMo known as PDC-P. In terms of infrastructure, the PDC-P system consists of a packet gateway which connects to other networks such as the Internet, plus provides access to a packet subscriber processing centre which carries packet to the mobile handset via the base station.

The crucial difference between "i-mode" and other technologies such as WAP is the fact that "i-mode" avoids intermediaries such as a dedicated server to interpret between the existing HTML-based Web world and the mobile world. "Compact HTML" (the language of "i-mode") is very simple for existing Web designers to create, whereas with WAP, designers have to learn WML even though it is supposed to be simple. Although "i-mode" connections look slow compared to the potential speeds of over 150 Kbps offered by General Packet Radio Service (GPRS), users point out that the system utilizes compression and response times are, therefore, acceptable.

The key reason for "i-mode’s" success is that DoCoMo views it as a service rather than a technology. It also has plans to migrate users over to a 3G version of the system once WCDMA networks become available.

SFR, the French mobile operator, was the first operator to give m-banking access to its customers using pre-WAP technology and rolling out commercial services with BNP, CCF, and Credit Mutuel. Some banks allow customers to view their bank/credit card accounts, transfer funds, and even pay bills online. These banks also offer marketing services through their WAP applications (order a chequebook, apply for a new service, call account representatives, etc.). Banks are expected to increasingly provide online banking transactions such as money transfers and bill payments.

In its WAP online offering, SFR features around 20 applications (e-mail, ticketing, news, sports, horoscopes, etc.). Banking is at third position in terms of consumer usage. Although this is just the infancy of WAP online banking, these positive first results are starting to convince banks to fully integrate WAP-banking in their overall strategies.

Online stock trading is another useful application on cell phones. Schwab launched online stock trading for Bell Mobility customers. Just before that, New York firm w-Trade had launched an online stock trading application with AT&T Wireless and Phone.com on the PocketNet phone in Chicago.

And if Unimode from Indian "Gray Cell" and "Wipro Smart" are any indications, WAP means a big opportunity for India too!

Niraj K. Gupta, from my cell, Voice and Data, July 2000.