Discussion Papers

Nr. 222: Franz Büllingen, Peter Stamm

Mobiles Internet - Konvergenz von Mobilfunk und Multimedia
Nr. 222 / Juni 2001

Summary

Mobile Network Operators are promising a brand new world of mobile data services with regard to WAP, GPRS or UMTS. After the unprecedented success stories of the mobile telephony as well as the Internet during the last years, which exceeded all previous forecasts, enormous expectations about the convergence of both arose. When the German UMTS licences where auctioned last summer the expectations had to be quantified. This revealed the network operators’ gigantic willingness to pay. Since then, much scepticism has been spread about the future market success of the mobile Internet.

A sound analysis of future fields of applications for mobile data services yields the following findings. On the one hand, for numerous services a high ability of end users to pay may generate a high demand. On the other hand, and even more important, interdependence between mobile Internet and nearly all other industries, especially media, retail, and banking will arose due to M-Commerce. Conventional distribution channels partly will be substituted and processes of production will gain more efficiency. Forecasts only looking at increases and shifts in private and business telecommunication budgets underestimate the overall revenue possibilities.

The introduction of mobile Internet is not a single step of innovation but a long lasting evolutionary diffusion process. This process will include the continuous improvement of network performance as well as the permanent development of services and applications. From consumers’ point of view, the degree of attractiveness and functionality of services are crucial for their success. The technology behind the service is not an interesting issue for the user.

The market players face enormous challenges. They have to manage the up-grade of their GSM networks and the construction of the new UMTS networks. New mobile data services have to be developed as well as suitable co-operation networks with partners from inside and outside the telecommunication industry have to be built up. And last but not least they have to open up the market potentials for mobile Internet. With six future mobile network operators and probable market entries of MVNOs, there will be little space left for inefficiencies.

There’s no doubt that the mobile Internet is a very promising market segment in the long run. Those network operators will gain a competitive advantage and participate in the evolving markets, which succeed in differentiating their business strategies and function as a successful system integrator more than other MNOs.

Only German language version available.

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