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Revenue Sharing: A Shot in the Arm for WAP
Revenue Sharing: A Shot in the Arm for WAP

WAP was first launched commercially in the UK during late 1999, by Orange. Since then, all the other UK MNOs have followed suit with their support, and despite the widespread panning WAP has taken in the press, there are now in the realm of 1-million WAP subscribers in the UK - not too bad for a consumer technology less than two years old.

Nevertheless, a consistent criticism of WAP is the lack of useful services available through phones today. In fact this criticism itself encompasses two points: first, there are few robust and useful services out there; and second, WAP services are by their nature difficult to find.

The latter is inevitable with today's handset technologies. WAP browsers typically use small displays, have a home page that will default to the appropriate MNO's portal, and sport primitive mechanisms (the phone keypad) for entering URLs of other sites. All these considerations - and the fact that, as WAP becomes more widespread, we can assume less technical knowledge on the part of the average WAP user - make it important for content providers to negotiate placement for their services with the telco portals. Our experience at Future Platforms shows that a single such placement can have a massive impact on traffic. In other words, few WAP users will go out of their way to find your service.

However, blame for the first criticism (the lack of useful services in the first place) can be apportioned to the telcos themselves. Since the first days of WAP, there has been no easy means for a content provider to realize revenues from the service, with the exception perhaps, of advertising - an ailing and distinctly unfashionable revenue stream at the moment. Operators have procrastinated over providing a revenue share of call charges (sometimes claiming that technical difficulties prevent accurate measurement), and have repeatedly referred to a time six months in the future when this will be possible... for nearly two years. This leaves content providers in limbo. How can they justify spending time and money on providing WAP applications when there's no ROI?

For this reason alone, it's easy to see why WAP portals have been historically poor. With a limited amount of content available (and short shrift given to providing an incentive to companies to provide more), portals have a limited menu of options to offer mobile subscribers. Limited thought seems to have been given to their integration and arrangement as well. If I've indicated that I want to read about the weather, do I really care who supplies me with the information? Do I need to spend more time choosing between different providers of news stories before I ever see what those stories are?

Compare this approach to that taken by NTT DoCoMo when they established their i-mode service. Partnerships were arranged with a number of content providers in a variety of sectors (e.g., health, financial, sports, etc.) with the result that by the end of 2000, there were more than 20,000 content sites available on i-mode - all in less than two years from the launch of the service. A quarter of these had gone through an approval process (where they are judged on service quality, utility, and robustness) with DoCoMo and, as a result, can generate revenue. DoCoMo takes a 9% cut for its trouble.

The disdain that UK operators display for content providers can perhaps be explained by the burgeoning desire for telcos to see themselves as media companies. Shifting bits of information around isn't glamorous, despite the fact that it pays well and, in this context, it's understandable (even if not justifiable) for telcos to keep third-party content providers (who in this context are dependent on, or perhaps even competitive with them) at arm's length.

Yet their repositioning as media companies has never been convincing, and telcos have yet to prove themselves capable of being more than "bit shifters." With new network technologies being deployed over the next few years, surely they'll find it increasingly difficult to concentrate on their media aspirations without compromising the quality of their network rollouts?

What's the solution? It's obvious. Emulate the model that has worked for i-mode, and allow anyone to realize revenue quickly and easily through their WAP services, driving production of a second-generation of WAP sites that can be prioritized by the content providers - ensuring their utility and robustness. Build customized and branded operator portals from the resulting portfolio of decent applications (ensuring that WAP sites must meet certain standards before they can get the valuable placement on operator portals). Drive WAP usage, generate revenue for the telcos, and convince onlookers that consumer data services can indeed be useful in everyday life.

How better could the telcos persuade a skeptical public to embrace 3G?

About Tom Hume
Tom Hume is cofounder and director of Future Platforms, a UK company
focused on developing Internet services for consumer devices.
tom@futureplatforms.com

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