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• The mobile internet in Europe and Japan.
• is Europe trailing?
• Presentation for O2 Mobile Communications The
  present and future
• seminar. Brussels, 15 Oct 2003
• Richard Tee, researcher EC/DC Infonomics

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Overview
1. Introduction 1.1 Examples of the mobile
internet 1.2 Introduction to the mobile
internet 2. Developments in Mobile Telephony 3.
Mobile internet services in Japan 3.1
Explanations for success 3.2 Problems and
interests 4. The mobile internet in Europe 4.1
Protocol based approach 4.2 Service based
approach 4.3 Platform based approach 5.
Conclusion
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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What is the Mobile Internet
Examples i-mode, Vodafone Live,
Microsoft Smartphone SMS, WAP, MMS
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Introduction to the Mobile Internet

• Mobile is not wireless (e.g. desktop PC with WiFi
  is wireless internet,
• not mobile internet)
• Other examples mobile internet devices PDAs with
  WiFi connection.
• Current focus is on phone-type devices
• Main research goal
• To map current mobile internet developments in
  Europe and Japan
• Method
• - Literature study
• - Interviews with people from mobile operators,
  content
• providers, software developers, researchers,
  analysts, venture
• capitalists, consultants (interviewed in Japan
  and Europe)
• - Interviews with mobile internet users

1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Developments in Mobile Telephony

• Changes in Network types
• 2G - 2.5G - 3GEurope GSM to GPRS to
  EDGE/UMTSJapan PDC (or CDMA) to W-CDMA (or
  CDMA2000)
• Changes in Usage
• Shift from voice-only to Voice/SMS. New
  initiatives WAP, EMS, MMS, i-mode, Vodafone
  live, 3, T-Zones and more
• Changes in Devices
• Emergence of new types of devices. E.g. camera
  phones, color screens, expansion cards, new types
  of phones such as Microsoft Smartphone, Nokia
  N-Gage, Smartphones/PDAs such as Sony Ericsson
  P800

1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Mobile internet services in Japan
Three mobile operators, three mobile internet
services
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion

• Main applications
• Email, ringtones, screensavers, games and
  horoscopes, information browsing
• Price example i-mode
• Monthly fee 300 yen ( 3 euros). Use of service
  range from 0 to 300 yen per month. Users pay for
  data sent and received (0.3 yen per packet ( 128
  bytes). This equals approx 2 eurocents per
  kilobyte
• Mobile services successful, especially when
  looking at number of active users

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Mobile internet services in Japan
Why did these services take off? Several types
of explanations - Technical differences -
Cultural differences - Market Structure
differences
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Technical explanations
Network types Packet switched vs. Circuit
Switched (packet switched networks allow for
easier per packet billing. Circuit switched
easier to bill by time) Docomo and KDDI use
packet switched, J-Phone initially used circuit
switched. - Rather than packet network packet
billing as key factor Markup languages HTML
based vs. WAP based languages Docomo and J-Phone
used HTML based languages, KDDI used HDML, which
is WAP based
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Cultural differences
Japanese more sensitive to technological
gadgets? Some examples (e.g. Tamagotchi, Sony
Aibo robot dog, pre warmed electronic toilet
seats) Key question is the mobile internet an
example of this? - Given popularity of
ringtones, downloadable screensavers and other
SMS applications no reason to assume
European market (esp. young people) is
fundamentally different Differences in commuting
habits?
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
Source Ministries of Transport
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Market Structure differences
Low PC internet diffusion? Also supposed inverse
relation fixed/mobile internet in
itself disputable
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
Source International Telecommunications Union,
2000
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Market Structure differences
Micro-payment system revenue sharing model
Central billing platform created by operator.
User receives monthly bill from operator 91 of
subscription fee goes to content provider, 9 to
the operator. All traffic revenues go to
operator Originator mobile phone
specifications - Operator releases and brands the
phones, not handset makers - Operator is able to
set technical requirements and can
coordinate these with the service - Operator sets
maximum fees for content providers and
controls the contents of the portal Conclusion
mainly market structure differences, rather
than technical difference have played key role in
success of mobile internet
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Problems and interests

• Role of the operator coordinating, controlling
  or dictating?
• Operator decides on
• Phones
• - technical requirements- screen type, size-
  other issues, e.g. antenna
• Content
• - official/unofficial- maximum fee
• For handset makers profits not primary issue
• Also few content providers are profitable
  (except for top tier)

1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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The Mobile Internet in Europe

• First mobile internet developments all based on
  protocols
• rather than Japanese service-based approach
• - SMS
• - EMS, Smart Messaging
• - WAP
• Main developers of protocols have been handset
  and
• equipment manufacturers (e.g. Nokia, Ericsson,
  Siemens,
• Motorola)
• Only ubiquitous protocol has been SMS
• European operator point of view Lack of
• coordination/control?

1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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New mobile internet initiatives
Three types of initiatives - Protocol based
MMS - Service based i-mode, Vodafone Live,
T-zones, 3 - Platform based Microsoft
Smartphone, Symbian/Series60, others (Linux,
Openwave, SavaJe) (NB categories not
necessarily mutually exclusive)      
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Protocol Based Initiative MMS
MMS (Multimedia Messaging Service) allows users
to send and receive messages using various media
formats such as text, images, audio and video
(Marketed as follow up to SMS) Advantages Featur
ed on most newer handsets Relatively easy for
users to understand Disadvantages Like SMS,
possibly lack of coordination, in principle
designed as user to user system (ad hoc
browsing) Possible solution standardization
through eg Open Mobile Alliance Difficulty
very large consortium, with many parties with a
variety of interests (including Microsoft, NTT
DoCoMo, Vodafone, Nokia, Qualcomm, Sun and many
more)
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Service based solutions i-mode, Vodafone
Live, T-zones, 3

• Initiated by European operators, using a
  Japanese approach
• Examples
• i-mode Europe (released in NL, Belgium, Germany,
  France and Spain)
• Vodafone live (released in several countries in
  Europe)
• T-zones by T-mobile (in several countries)
• 3, the 3G from Hutchison (UK, Italy)
• O2 Active (UK, Germany)
• Difficulty coordination with major handset
  makers.
• Also branding issues (handset brand v.s. network
  brand)

1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Platform based initiatives Smartphone
Microsoft Smartphone Generic name for any phone
equipped with Microsoft operating system. First
Smartphone released by mobile operator
Orange (called SPV). Other operators and vendors
have pulled out at the last minute (e.g.
T-Mobile, Samsung) Difficulty few major handset
maker have announced to support Microsoft (fear
of Microsoft dominance). Exception
Motorola Response - Handset makers joined under
the Symbian platform (est. 1998) UPDATE
Microsoft agreement to work with Vodafone on
mobile web services
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Platform based Symbian/Series 60
Symbian alliance of all major handset makers,
led by Nokia (Motorola recently pulled
out) Symbians goal to provide a generic
operating system based on open standards that can
be adjusted by individual handset
makers (basically a long term solution that might
benefit all vendors) Thus far only one open
platform released, Series 60 (from Nokia). Also
licensed by Siemens and Ericsson Difficulty
operators are competing outside Symbian but are
forced to cooperate to compete against Microsoft
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Conclusion
Is Europe trailing? - Not necessarily. However,
it cannot be denied the level of service in Japan
is much higher than elsewhere. The
European approach is can be regarded as more open
(or less coordinated) and therefore more
dispersed Main challenge for Europe Find ways
to generate sustainable, data-intensive, content
creation Possible solutions - More cooperation
between mobile operators (alliances already
forming) - Emergence of significantly dominant
platform(s). E.g. Microsoft, Series60, Vodafone
Live, i-mode - In addition need to increase
brand awareness of operators services (will be
challenge with one dominant vendor in
particular)
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion
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Thank you Questions and Comments? Contact E-mail
Richard.Tee_at_infonomics.nl Report
Contextualizing the Mobile Internet available
at (via Publications) http//www.ecdc.info
1. Introduction 2. Developments 3. Japan 4.
Europe 5. Conclusion