Customers the key, says mobile phone executive

By PAUL BRISLEN

Telecom and Vodafone are building new cellphone networks in the next five years at a cost of around $1 billion.

But to make a return on their investment, a visiting expert says they must do something that doesn't come naturally to them - they must give up controlling customers and instead let them call the shots.

Paolo Baldriga, head of marketing and multimedia for Italy's number three mobile phone company Wind, is in New Zealand talking to the industry about Wind's experiences.

Baldriga said the push to launch new third-generation (3G) network services was hampered by a blinkered view of what content customers really wanted.

"I came to Wind from pay TV and there we owned the customer from end to end. Everything they did they did through us.

"We told them what was available, we provided the funding for programming, we controlled everything and I expected to do that with the mobile phone as well."

Instead, he said, the opposite was true.

A controlled, limited content base meant fewer customers using the network less often.

"Instead we decided to allow any content provider to deliver content they wanted to sell over our network.

"We became just another channel for them, they became just another content provider for us."

Wind began a revenue-sharing agreement with the content providers.

"They receive 60 to 70 per cent of the subscription charge and the network operator keeps all of the traffic charges."

Vodafone's general manager for infotainment and new ventures, Kieren Cooney, doesn't disagree with Baldriga but thinks the mobile market in New Zealand is at a much earlier stage.

"It's similar to the internet in the early days. There was no one model that was working. The market needed to be seeded and AOL came along to do just that."

America Online offered users a limited, cut-down version of the internet we know today as a kind of introduction to the World Wide Web.

"It created a good experience for the customer and gave them an easier introduction to the internet."

Cooney said that eventually AOL had had to change its model as users had outgrown the need for it and he could see that happening in the mobile data market, but not just yet.

"It's even more complex with the mobile market because you have different phones with different capabilities in different places trying to access different kinds of media."

Vodafone's approach, to offer a "best of breed" suite of content in the form of Vodafone Live, would be taken to the next step once the 3G networks were up and running.

"Your phone might be capable of video so you'll want to see streaming video, hear full-quality music and play games but my phone can only cope with still images and the sound quality isn't as good, so I'll get a different experience."

Cooney said that difference would be automatically handled by the 3G network and gave network operators and content providers a whole new world of possibilities for customers.

Telecom's general manager new media & business development, Ralph Brayham, said Telecom was trying to forge a path somewhere between the two extremes of open and closed content.

"We can't be so arrogant as to suppose we know what every customer wants to see on their phone."

Brayham said Telecom's approach to content provision was to balance ease of use with access to content.

"You've got to try to find the right balance between making it easy for people to get to the news, weather, sport or whatever and offering them as wide a choice as possible."

Brayham said there were two types of content - downloadable content such as ring tones, games and video, and non-downloadable such as email.

Telecom wanted to make it as easy as possible for its customers to access their email via mobile phones so Xtra's email service was the only one offered over the cellular network.

For downloadable content, however, Telecom was eager to work with a range of content providers.

One of the key restrictions was the phone itself.

"The screen size and navigation via the keypad are limitations."

Consequently some of the high-use content, such as the weather, would be offered through pre-programmed shortcuts.

"It's not going to change from one provider to another so you'll only want one source for that."

Telecom would offer a simple shortcut to the weather because users want easy access to that.

"However, if you look at our WAP portal, prominent on our home page is Google and that allows users to find whatever they feel is most appropriate."