C17DavidBraue

Consensus IT Writers Awards

WAP was introduced in Australia to great fanfare two years ago. But the response since then has been underwhelming. David Braue analyses WAP's evolution and outlook.

It's two years since Optus launched Networker, Australia's first WAP (wireless application protocol) service, anticipating it would become a major money-spinner as customers rushed to upgrade their handsets.

Not even the once-colossal WAP hype machine, however, managed to avoid the failure of one of high-tech's biggest blunders. Despite the early optimism of Optus, Telstra and Vodafone, virtually none of us are using our mobiles to check stock portfolios, read horoscopes, and get instant sports updates. Most of us, it seems, would rather use our phones to call people, then get information off the Net when we get home.

The lukewarm response has seen a flurry of companies distancing themselves from the embattled standard technophiles once eagerly anticipated. Earlier this year, ANZ publicly criticised the technology after terminating its WAP banking trial due to low demand. In September, Westpac conceded that just 500 people were using its WAP banking service every month. Both banks have stopped further development of WAP services until demand picks up.

"We did give WAP a go but haven't really seen a demand for mobile Internet banking," says ANZ spokesperson Rita Zonius. "We've done the groundwork and if there was renewed interest in mobile banking in future, we'd be quite well positioned to roll out the technology."

Carriers, accustomed to defending their interest in WAP, have built up a battery of excuses for its failure. It's hard to get handsets, they say. There aren't enough applications available via WAP yet. Charged by the minute, it was simply too expensive. It was too slow for customers, who became disillusioned after struggling to use tiny screens and keypads to interact with something that was nothing like the Web they knew.

These all sound like problems the carriers should have addressed well before launching a clunky, marginally useful and expensive service for customers. After all, it's not like people don't like wireless data services: in Japan, carrier NTT DoCoMo's iMode service has been a runaway success, offering information, games and other tools to more than 23 million Japanese customers - a sixth of the population.

So why isn't it working here?

Rosemary Sinclair, managing director of the Australian Telecommunications Users Group, believes carriers have simply have failed to convince an uninterested public to care about wireless data.

"At the moment we're having the wrong discussion about 3G," she explains. "All the promotion has been around mobile data, but consumers say 'what is that?' It's not sounding very attractive. When international direct dialing was introduced, it wasn't described as a 64-kilobit switched telephony undersea service. Technologists talk technology until the marketers take over, and I'd really like to see more marketers in this space."

For now, however, carriers seem determined to keep throwing technology at the problem. Faster GPRS (general packet radio service) is now live on all three major mobile networks and plans are underway for lightning-speed third-generation (3G) networks to debut in early 2003.

Determined to be first to market with 3G, Hutchison Telecommunications last month sold its GSM mobile customer base to Optus in a deal that will provide $53 million towards 3G construction. Last week, Hutchison's parent company, Hutchison Whampoa Group, ordered more than one million video-capable 3G handsets from NEC in an attempt to head off some of the supply problems that have plagued WAP and GPRS.

Ironically, it's SMS (short message service), those 160-character messages flying around the world, that may be the saviour of wireless data. Realising that SMS is a winner with consumers because it's simple and easy, carriers hope it could be the thing that makes consumers crave more powerful - and profitable -- wireless services.

"The sorts of things that were around a few years ago weren't really provided on sound commercial footings," says Greg van Mourik, general manager of wireless multimedia with Telstra's OnAir wireless division. "We're now putting a lot of priority on applications that exploit SMS as a means of introducing customers to the sorts of things they can do with their mobiles. This isn't a one-shot type exercise where you do something in one month and it works or doesn't. It's an evolution and a series of things that have to be done over time."

MMS (multimedia message service), an enhanced messaging standard that supports pictures and longer messages, will be the next step in that evolution when it debuts early next year in mobile phones from Nokia and Sony Ericsson. That standard relies on the improved speed and flexibility of GPRS, which is slowly gaining ground in the business community. The country's first GPRS application has recently emerged as the ACT Police trial a system using wireless handsets to instantly check vehicle details.

Other real-world applications remain sparse, however, even among businesses with the means to fund potentially beneficial wireless efforts. It's clear that carriers have a lot more work to do if they want wireless data to succeed among budget-minded Australian consumers.

Australian developers are less concerned about the technology as about the relationship they have with mobile network operators. NTT DoCoMo, for example, pays content providers most of the revenue gained from use of its iMode services, taking just a flat fee of about 9%. That has encouraged developers to offer all manner of novel and useful applications, giving subscribers more than 1600 applications.

In Australia, by contrast, mobile carriers have closely guarded the keys to their networks. Initially concerned that offering access to too much WAP content would confuse customers, WAP operators have generally steered their users to narrowly defined menus of content provided by specific partners. Getting a toe in the door - much less actually having a WAP application hosted over a carrier's service -- can be difficult for innovative small Australian developers.

"If a small wireless applications developer in Australia comes up with an idea, they've got to jump through all sorts of hoops to see if a carrier is even interested in working with them," says Steven Thomas, managing director of IS Australia, which developed the ACT Police's tracking system. "In Japan, the applications developer actually gets a substantial component of the ongoing fees. It's more of a question of management philosophy for Australian companies, and I think the culture will be forced to change as wireless bandwidth increases, which will drive consumer demand."

Ben Swan, CEO of wireless software development house Waplications, agrees. "We've been most focused around SMS and services in that space. The model is good, but I think the carriers have a lot to add in offering revenue and airtime. A lot of the time they just don't have the technology to manage that."

Carriers also face practical challenges, such as finding the money to build up handset inventories, buy wireless network equipment, and hire the staff needed to make it all work together. These are the things carriers really need to worry about, says Thor Johnson, senior manager in the Deloitte Consulting's global communications practice, which advises carriers wanting to get into wireless communications.

In future, operators will need to have niche skills internal to the organization, he says, and some level of sophistication in identifying root problems. "That kind of skill isn't really present in terms of mobile data, and that means underlying processes and technologies need to be updated."
That takes time, money and effort on the part of the carriers. In the meantime, content providers are keeping their expectations low. Financial services company Merrill Lynch HSBC, for one, offers wireless share trading but has so far found customer response "below expectations," says e-commerce manager Jeff Cook.

"It was never designed to take over from the Net," he says. "We made it an accessory to our Internet offering. I still believe wireless has an incredible future, and we have to move away from PCs. It's a shift in thinking. But it's a few years away and there are a lot of hurdles to overcome." 

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