tma/blanko/ /1 Blanko ‘98 The role of content in the future of mobile operators Timo Ahomäki Sonera Ltd

tma/blanko/ /2 Agenda  Background  Service examples  Identifying and positioning content for mobile use  The business models  Developing partnerships and co-branding  Issues in customer care  Conclusions

tma/blanko/ /3 Background  First there was voice...  The growing penetration opens new possibilities The general concept of VAS includes anything from voice mail to electronic commerce  Content services are the latest form of VAS Huge success of SMS is a key driver New enabling technologies ranging from WAP to UMTS are bound to explode the market  Content services will play a major role in the future success of any operator

tma/blanko/ /4 Service examples: Billing info  Typical “telephone company service”  Current GSM bill balance using short messages Configurable: Itemised/non-itemised Available for Nokia TTML and standard phones  Priced at FIM 0,99 / query  Alternative to a free IVR system  Extremely popular and growing

tma/blanko/ /5 Service examples: Textus  WWW-based general interest services Weather, lottery, teletext, jokes, etc. Available for Nokia TTML and standard phones  A flat fee of FIM 1,89 / search  Agreements with the content provider are required for copyright reasons  Popular and growing fast

tma/blanko/ /6 Service examples: Weather  Content provider: Weather Service Finland  Local weather forecasts using short messages 450 towns in Finland, about 50 abroad Available for Nokia TTML and standard phones  Extension of WSF’s WWW-based service  Priced at FIM 3,50 / search WSF earns about FIM 1,50 / fetch  Launched in June and growing steadily

tma/blanko/ /7 Identifying content for mobile use  Content should be useful but not too expensive  Entertainment always seems to be a good bet Jokes, horoscopes, etc.  Users appreciate good value even at higher price Weather Service Finland, Railway timetables, etc.  Sonera has a bias towards “useful” services Expensive entertainment services can be risky Ideally, some sort of barring facility is required

tma/blanko/ /8 Positioning content to market  Three basic categories Operator services: Billing info, directory, etc. General interest services: Jokes, weather, teletext, etc. Content provider products: Weather, banking, retail, etc.  A single service may have instances in many categories. (e.g. WSF) The subscriber needs a way to identify the “price class” of a particular service  Migration between categories is natural

tma/blanko/ /9 Two possible business models  The traditional telephony model Earning logic is based on the premium-rate telephony’s “pay- per-view” model Operator intensive, easy on small CPs  The traditional internet model Earning logic is based in monthly fees and/or advertising Operator’s role is smaller, CP’s role is greater  A hybrid of the two?

tma/blanko/ /10 Billing issues  Business model has big impact on billing complexity really cool applications are usually impossible to bill  The premiun-rate telephony model seems to work Platforms seldom support premium-rate SMS Lots of improvisation required to make working solutions  WAP brings huge challenges to billing  Start simple, compromise on fine detail and concentrate on quality and reliability

tma/blanko/ /11 Who owns the customer?  The entity that bills the subscriber? Operators traditionally strive to gain control through billing The times are changing...  Sonera has adopted a mixed model: CPs own their services and market them independently Sonera bills the subscriber on a “pay-per-view” basis CP’s are free to use any other type of earning logic  Customer ownership is split between many parties

tma/blanko/ /12 Partnerships  An operator can not develop a complete service portfolio alone  A content provider cannot develop a successful service with just one operator  A one-to-one partnership may not be enough!  All parties may need to compromise their individual ambitions in favour of a successful package

tma/blanko/ /13 Co-branding  Co-branding may be an efficient method to get started with new types of services Requires some form of risk/revenue sharing  Successful arrangements go way beyond joint marketing efforts  Co-branding seems to suit best for general interest and very specialized services

tma/blanko/ /14 How big will it be?  Estimates range from moderately big to enormous!  UMTS will eventually change the way we think about mobile services UMTS will not necessarily be a revolution business-wise WAP and GPRS offer a smooth growth path towards UMTS  Content business is still in it’s infancy Everybody is trying to learn how to do it Those who are afraid of making mistakes will fail

tma/blanko/ /15 Conclusions  The future looks bright but the business opportunity is there now Users are interested in information services Users are prepared to pay for useful services Service creation is 10% technology, 90% business planning  Start early, progress in small steps, make mistakes