From Scandinavia With Love

I was recently speak­ing at a con­fer­ence called Escan­di­navia 2000, which cov­ered the state of the Inter­net in Scan­di­navia. Dur­ing that con­fer­ence, I had a chance to speak to a num­ber of peo­ple about the state of wire­less in the Scan­di­na­vian coun­tries. Here’s what I’ve learned and how it can help those of you who are work­ing in the wire­less space in the United States.

The Hybrid World Lives!

Many of you may remem­ber the Feb­ru­ary 10th issue about Hybrid Com­put­ing. While talk­ing with Birger Steen, CEO of Scan­di­navia Online, I dis­cov­ered that the con­cept is not that far off the mar­ket. It is his con­tention that WAP-enabled phones are largely a pain in the back when it comes to inter­face. Hav­ing to key in every let­ter on the small phone key­board is far from the eas­i­est thing in the world. As a result, Scan­di­navia Online has devel­oped a set of ser­vices that allows users of their por­tal jump on their site and con­fig­ure their WAP view on the web. From his point of view, this is the best ser­vice he can offer now to wire­less users.

The point was reit­er­ated by a few peo­ple around the con­fer­ence that told me that going to the web to con­fig­ure a cell phone was the best way to deal with the small screen inter­face prob­lem encoun­tered by most WAP phones. Anne Ras­mussen, of WAPportal.net demon­strated how their com­pany plans to offer a sim­i­lar ser­vice in a hosted fash­ion for cor­po­rate sites and oth­ers. The word around Scan­di­navia is that if you want to find the best way to con­fig­ure a WAP phone, you have to go to the web via a com­puter to do so.

M-Commerce Huge … but not for Etailers

Another sig­nif­i­cant trend is the rise of M-commerce. In Fin­land, and to a lesser extent Den­mark, Nor­way and Swe­den, peo­ple can already use their WAP phones to buy from vend­ing machines. The vend­ing machine has a tele­phone num­ber on it. You dial that num­ber and a credit is added to the machine, to be billed on your phone bill. With the intro­duc­tion of secu­rity in the new WAP stan­dards, a few peo­ple were talk­ing about how in the future the ques­tion “will it be cash, check, credit card, or phone?” may not sound silly.

What they envi­sion is that WAP phones could become the new credit card.

A recent sur­vey found that in Scan­di­na­vian coun­tries, 82% of the peo­ple would go back to get their cell phone if they for­got it before leav­ing home, while only 64% would do the same thing if they for­got their wal­let. The basic con­cept is one that may be for­eign to those of us who live in the United States and revolves largely around the fact that GSM phones are equipped with a small iden­ti­fi­ca­tion chip called a SIM card. You can take the chip out of one phone and put it in another and you don’t have to worry about chang­ing phone num­ber or con­tact info.

Because of the emer­gence of such a way to do billing, some of the speak­ers at the con­fer­ence pre­dicted that the long run path for mobile phone oper­a­tors would be to merge with finan­cial insti­tu­tions as their ser­vices will increas­ingly resem­ble those of credit card companies.

How­ever, few peo­ple were opti­mistic about the prospects of etail­ers when it comes to mobile phones. “When I’m in a store buy­ing some­thing, I’m not going to go up on the web to check if it’s avail­able at a web store,” told me one atten­dant. “I want to get it now and not wait a few days for it to show up in the mail.”

As a result, the promise of m-commerce is good for soft­ware ven­dors (who will sell pack­ages that allow oper­a­tors to set them­selves up as cur­rency clear­ing­house) and mobile phone oper­a­tors (who could become the next big finan­cial force) but unfor­tu­nately, cur­rent etail­ers will not fare as well.

Con­tent is King… in a Wire­less Republic

The promise of adver­tis­ing sup­ported con­tent on wire­less phone has been hailed by some as a new way to sup­port con­tent sites. Unfor­tu­nately, few con­tent providers will sur­vive in the wire­less space as demand for those ser­vices does not seem to meet expec­ta­tions. Talk­ing with peo­ple from the Scan­di­na­vian arm of large Amer­i­can com­pa­nies who have tried to go the wire­less route as a dis­tri­b­u­tion chan­nel, I dis­cov­ered that there was not much demand for those ser­vices. “Sure, peo­ple do check the price of their stock on the phones but they still call our voice line to place their order,” said one exec­u­tive from an online trad­ing company.

As a gen­eral rule, the demand for con­tent seems to be lim­ited to a few areas: enter­tain­ment (bars, clubs, and restau­rants loca­tors), finan­cial (stock prices) and sport-related (lat­est scores). How­ever, many of the peo­ple involved in those areas told me that they were still look­ing for a proper busi­ness model. The loca­tors are look­ing at a coupon-like scheme, whereas bars can offer a spe­cial coupon and peo­ple can go to a bar and show the phone coupon to get a rebate on drinks (“It appears that beer is the hot wire­less app” quipped one pan­elist). Finan­cial ser­vices and sports ser­vices are cur­rently look­ing at pos­si­ble sub­scrip­tion based mod­els or at deals with oper­a­tors whereas they would share a por­tion of the rev­enue they are gen­er­at­ing for the operators.

CN U RD THS

On the other hand, com­mu­ni­ca­tion in the hot wire­less app. SMS has clearly become the hot app when it comes to wire­less ser­vice across Scan­di­navia and across Europe. Because oper­a­tors are charg­ing lower rates for data ser­vices than they are for voice traf­fic, short mes­sag­ing has become the quick­est way for peo­ple to get in touch. A new lingo is start­ing to pop up around SMS as peo­ple are try­ing to econ­o­mize the num­ber of key­stroke they type (SMS mes­sages are lim­ited to 160 char­ac­ters). As a result, the head­line for this sec­tion would trans­late from CN U RD THS to Can you read this?

Con­ver­gence in the Making

I also talked to a bar­tender who told me that the pre­vi­ous night a woman was in the bar look­ing for some of her friends and asked him if he could change the TV chan­nel to a par­tic­u­lar tele­text page (in a lot of Euro­pean coun­tries, TV chan­nel use the extra band­width to carry data. As a result, while watch­ing the BBCyou could switch to the BBC tele­text chan­nel and read the lat­est news, etc… on there). The chan­nel this woman was using allowed her to con­verse with sev­eral of her friends in a TV-based chat room by using her phone and an SMS gate­way. True con­ver­gence in my book but the prob­lem here is where rev­enues for an online oper­a­tor are. Unfor­tu­nately, the only oper­a­tors who will make money on this will be the phone oper­a­tors who are rack­ing up extra data min­utes of usages.

Smaller, Faster, Cheaper

The good news, from a user’s point of view, though, is that those ser­vices are com­ing in a smaller pack­age. A lot of the phones I saw over there would put our Amer­i­can phones to shame. On aver­age, Euro­pean phones are now weigh­ing about 2.78 ounces (79 g.), a form fac­tor of 3.9 X 1.75 X .6 inches (101.5 X 44.5 X 17 mm.), and a bat­tery life that allows for either 150 hours of standby time or 4 hours of talk time. Of course, they come equipped with voice recog­ni­tion (so you can have the num­ber dial based on a name you give to it), pre­dic­tive text input (a new set of tools for SMS which allows the phone to pre­dict what word you’re going to type based on your input), and are WAP ready. The most inter­est­ing thing is that they usu­ally are priced under $200 which makes me feel that we’re over­pay­ing in the US.

The future is now?

The new thing around that space, though, is not a smaller phone or a bet­ter way to do e-commerce but a new set of ser­vices around higher speeds of access. The first step in that direc­tion is GPRS, which offers about 20kb per sec­ond and has been rolled out around Europe. This is seen as a way to dis­trib­ute such ser­vices as music and bet­ter news on the phones. How­ever, the real dis­cus­sion is cen­ter­ing on UMTS which promises wire­less through­puts of 2Mb per sec­ond or more. Por­tions of the UMTS spec­trum have already been allo­cated in the United King­dom, Ger­many, France, Spain, Nor­way and Fin­land, with the rest of Europe mov­ing quickly on allo­cat­ing this space. UMTS pro­po­nents envi­sion the use of wire­less video con­fer­enc­ing and a bet­ter Inter­net expe­ri­ence to result from this new development.

Euro Fight­ing

One of the big chal­lenge in terms of doing busi­ness in Europe is loca­tion. Because most of the Euro­pean coun­tries are too small to cre­ate an actual mar­ket for dig­i­tal ser­vices, Euro­pean oper­a­tors usu­ally have to pro­vides sites in mul­ti­ple lan­guages, and sup­port mul­ti­ple cur­ren­cies. As a result, Euro­pean etail­ers tend to be in favor of the Euro, which would make their lives a lit­tle eas­ier. How­ever, as the cur­rency is slowly deflat­ing in the cur­rency mar­ket, oppo­si­tion to the Euro is grow­ing across Europe. On Sep­tem­ber 26, Den­mark is hold­ing a vote on whether to join the Euro­zone or not and this elec­tion is seen across Europe as a big test for the Euro’s power.

The rea­son it the Dan­ish elec­tion is so impor­tant in Europe is that if the Dan­ish vote fails, England’s upcom­ing vote will prob­a­bly do so too. As a result, there is a lot of con­cern across Europe about this elec­tion. Many etail­ers I met in Copen­hagen told me that they were try­ing to orga­nize them­selves to push for adop­tion and work across bor­ders when it comes to those elec­tion. Danes I talked to told me that British con­ser­v­a­tive politi­cians (who are opposed to join­ing the Euro­zone) had been lob­by­ing in Den­mark. This is a race that etail­ers both in Europe and the United States should pay atten­tion to as it will most prob­a­bly dic­tate the via­bil­ity of the Euro as a cur­rency and, if the Euro suc­ceeds, could mean less headaches to all of us.

Going beyond Eco­nomic mat­ters, sup­port or lack thereof could mean either an accel­er­a­tion or a slow­down for eEu­rope, a new ini­tia­tive by the Euro­pean Union to become a force in the infor­ma­tion age by nor­mal­iz­ing rules related to e-commerce across the dif­fer­ence mem­bers of the EU and offer­ing incen­tives to com­pa­nies that want to bring net ser­vices to the EU mar­ket­place. Among the ini­tia­tive sup­ported under eEu­rope are net access in pub­lic schools and pub­lic cen­ters, lower access costs for busi­nesses and indi­vid­u­als, agree­ment on com­mon spec­i­fi­ca­tions for a smart card infra­struc­ture, finan­cial sup­port for emerg­ing tech com­pa­nies and a num­ber of social sup­port and gov­ern­ment ser­vices becom­ing avail­able to all via the Internet.

All and all, what eEu­rope would mean is that coun­tries would work in the EU gov­ern­ment to set up rules about the Inter­net. I do not need to tell any­one read­ing this that it would be bet­ter for those of us in the indus­try as we would not have to lobby sev­eral gov­ern­ments in order to get the proper sup­port for our industry.