By Marc Phillips

The pace and impact of wireless Internet access in the Asia Pacific region will underpin one of the most monumental economic shifts ever seen in the new economy. With over 350 million global wireless Internet subscribers connected by 2004 and 150 million of them in the Asia Pacific region - according to IDC - this growth surpass fixed Internet access users.

eCEO's should be aware that this is twice as many wireless users as the USA and Western Europe have and greater than the 40 million wireless users in Japan by 2004. The successful companies in Asia in the 21st century need their businesses to become leading examples of wireless businesses for the rest of the wired world.

One of the most important things that today's CEO needs to understand is the inflection point that will occur in the next 2 years. That is, the number of wired on-line users (which is currently around 100 million people in the global economy) is surpassed by the same amount of wireless Internet users in the Asia Pacific region alone!

Despite the hurdles of wireless Internet usage is currently facing in terms of handset compatibility - whether a phone or a personal digital assistant - we should see the phone win out.

A recent survey conducted in major Chinese cities by web site operator Linktone.com has found nearly half of urban Chinese intend to buy wireless application protocol (WAP) enabled cellphones. This is despite the country's fledgling WAP services. The survey of more than 7,000 people was conducted in Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou and it found people to be generally excited by the mobile Internet revolution. In Beijing, more than 90 per cent of respondents showed interest in the Internet access functions of WAP cellphones, and 72 per cent said they intended to purchase WAP cellphones priced under CNY3,000 (US$362.30). The other 28 per cent were willing to consider more expensive models. In Shanghai, more than 65 per cent of those surveyed stated that they would buy WAP cellphones within a year.

To meet this challenge, eCEO's need to be aware of the emerging mobile Internet business models. Lets take a look at some of the successful wireless business models to date as these provide a roadmap for eCEO's.

Vindigo is an example of a successful text based business model in Asia. They offer a point-of-interest advertising service on palm pilots. Consumers are able to use Vindigo’s website to decide where they will eat, shop and play. Vindigo’s editorial is independent from its advertising and there are no fee’s for inclusion on the website. Vindigo share their revenue with the providers of the content. An example of the service available through Vindigo is a chain of chicken shops nationwide. Through Vindigo, you can send a message to anyone looking for food who is within three blocks of one of the franchises. You can give them directions to that restaurant and even offer customers an electronic coupon.

Much has been written about Japan's i-mode wireless service provider. NTT DoCoMo has chosen numerous content aggregators as partners in the i-mode offering. Official websites are given very generous revenue sharing arrangements and this helped NTT DoCoMo establish dominance and scale right from the start, rather than trying to be greedy with the cash flow from content.

Paid Character downloads - Bandai

This Japanese manufacturer is best known for the tamagotchi virtual pet and has formed a division called “Networks” which develops mobile content. It has become one of i-modes most popular content providers, attracting 1.7 million i-mode customers to its content. The most popular service offered is paid character downloads which currently has 1.25 million subscribers.

A division of Bandai Network has developed “wireless wondergate” a wireless add-on device that connects its best selling electronic gaming device to the mobile phone. Through wondergate, users are able to download games from the Internet. Bandai charges a per use or monthly subscription fee for its entertainment services (eg, 100 yen per month for character downloads). Bandai pays the operator 10% click through commission. Gross margins for such services are in the 50% range and Wondergate currently sells for $100 in Japan.

The above transactional revenue stream favours both parties as the carrier is not investing in the product development and Bandai receives guaranteed traffic for an agreed up front commission.

Fee for services integration - EdgeMatrix Singapore

In my opinion, I still believe it is the systems integrators who will be able to pick the low hanging fruit as they wrap systems around wireless software. One of the most important areas of growth will be the Wireless to Business market as corporations seek to extend access of their Local Area Network (LAN) to their mobile field force.

One company that has taken this advice is the Singapore based company, EdgeMatrix, which is a leading e-business software solution provider operating in both the online and wireless space. Their services include professional Internet services, broadband and e-commerce applications and wireless value-added software solutions. At the moment the focus of the business is towards the wireless environment, introducing several wap-based infrastructure products such as a WAP gateway, browser and a WAP portal platform. EdgeMatrix’s target clients are Telcos, local companies and government-linked organizations. The current revenue is earned from on-line systems integration/consulting fees, however they expect to shift towards mixing revenue between licensing fees and product sales of its wireless products over time.

Another company positioning itself as a middleware developer for operators with specific capabilities in WAP translation and reformatting is WAPworkz. They are also building a WAP-based applications/portals (held on their proprietary middleware) for operators and corporate customers. WAPworkz earns its revenue from software licensing fees and systems integration charges. The company hopes to establish an Application Service Provider model on its middleware and mobile commerce revenue sharing agreements in the future. WAPworkz currently operates in Taiwan, Korea, Hong Kong, Denmark, Spain, Sweden and Malaysia through strategic partnerships and has successfully sold wireless solutions to Telcos in these countries.

The ASP wireless model is still in its infancy and offers a tremendous revenue stream for operators located in Asia.

Real Time Location Services - Rotis

Wireless Internet connection has held the kudos of being able to deliver location based services. For instance, you're mobile phone receives a message saying that the store you just walked by has a sale on tennis racquets. One company leading the charge is Rotis, a Korean based company striving to be the leading traffic information system in Korea for telcom operators and government institutions.

Some of the traffic technologies that have been developed include intelligent traffic information systems, automatic vehicle location services as well as real-time traffic analysis systems. Rotis has wired all roads in Seoul metropolitan area with two lanes or more, giving it the unique competitive advantage of being the only company to offer these dynamic traffic and location services in Korea.

Customers will be able to use Rotis via various means :-

- Access using mobile phones to get optimal route computations, dynamic map, directory services, reservations services and point of interest facilities

- Access using the companies voice information system to get real time traffic reports

- Access Rotis Internet traffic information services through roadi.com’s homepage for businesses and rotis.com for consumers.

The Revenue generated is derived from government institutions and mobile operators. Rotis receive a fixed annual fee for providing traffic information services.

I-SOFT has moved its area of focus from web-based technology into the area of Mobile Internet solutions and applications. I-SOFT has formed strategic partnerships with global mobile content providers to provide Internet application services in the global arena. The company also develops multi-player online games for mobile phone users as part of its mobile entertainment suite and 3g supported multimedia contents.

The principle business areas of the I-SOFT include:-

- Mobile Internet solutions

- Mobile Internet systems integration

- Mobile Internet entertainment

- Mobile Internet Multimedia solutions and applications(using mpeg-4)

- Mobile Internet portals.

The revenues are received from five key sources including:-

- Fees from the development and sales of wireless Internet solutions and services

- Fees from the development of wireless portal sites for domestic and global telcom operators

- Fees from the provision of multiplayer Internet games for mobile phone users

- Advertising and marketing revenue by selling space to businesses who wishes to access I-SOFT’s mobile portal user base

- Fees from the sale of mobile Internet supported MPEG-4 and associated fees generated from MPEG-4 based application services.

I-SOFT has a vision to develop, market and support infrastructure software and applications for the mobile internet market and combine the internet with wireless technology.

The primary business focus for Infoislive, which is based in Singapore, is to provide entertainment related wireless applications and supporting services to various mobile operators in Asia and Europe. Infoislive also conducts a side business by developing Middleware and Personal Information Manager applications that support various wireless platforms including WAP and I-mode ‘Gamesislive’ a wholly owned subsidiary of Infoislive provides a multiplayer, multilingual games village with WAP/WEB/I-mode interfaces for mobile users.

The majority of revenue earned by Infoislive comes from the one time sale of applications to operators, plus the fee for customization and maintenance. The rest comes from a service fee in hosting its own application for operators.

Infoislive plans to become a wireless internet application service provider that allows end users to access its applications and software services from its server through the wireless internet. They are expecting to generate revenue through collecting a monthly subscription fee from the end user for selected content, with a revenue split of around 80/20 between the operators and themselves.

Based in Singapore, WAPhead! develops end user applications on behalf of wireless operators as well as back-end solutions such as security, billing, WAP gateway and a wireless broadband distribution platform. They offer a wireless portal that supports both Chinese and English for mobile phones and handheld PDA’s. At the moment WAPhead! offers 100 native WAP applications mainly in areas of games, transactions and messaging as well as developed numerous infrastructure software solutions. The company has contracted with operators to share revenue based on subscription and utilization of its applications.

Billing is one of the key killing weapons that the telecommunications carriers have not unleashed yet. Billing applications provide telecoms companies with the opportunity to create convenience for the user.

In summary, there are some definite challenges for companies that want to implement and exercise their strategies in the wireless market. Business-to-business as an e-commerce mobile revenue model is restricted. We are seeing leading analysts forecast that the fifty percent of the non-accessed data revenue will come from the business-to-wireless area. I personally believe the business-to-wireless is an area that is due for the most rapid uptake and female professionals who view their mobile phone as a fashion accessory is an untapped.

(source: Ovum, May 2000)