Seybold: Increasing wireless broadband usage

Increasing wireless broadband usage

By Andrew M. Seybold

Increasing wireless broadband usage is one of the most important items on the agenda of AT&T, Sprint Nextel and Verizon Wireless (and soon T-Mobile as it rolls out its own UMTS network). These network operators have invested billions of dollars in building out wireless broadband capabilities, and yet only a small fraction of their average revenue per user is derived from data services.

AT&T reported a total ARPU of just over $50 per month and data revenue makes up only $9 or 18 percent of that revenue, Verizon's reported ARPU is just over $51 and its data ARPU percentage is 21 percent, or just over $11 per customer, and Sprint's total ARPU is $59 with data revenue of $11 per customer, making up 18 percent of its total ARPU.

Don't get me wrong, the percentage of revenue based on data usage has been growing each quarter and it is up considerably year-over-year, but these data numbers include SMS and MMS as well as broadband data. If the broadband data numbers were reported by themselves (which they are not), the percentages would be considerably smaller.

What does this have to do with content? Well, content is what drives data usage. The wireless world is divided into two camps. One is made up of those that believe that serving up the Internet on a wireless device with browsing, searching on Google, etc., and downloading audio and video from the web will drive up data usage. Then there are those who believe that a smarter wireless Internet, one that does not rely on browsing to receive the content we want, will drive additional usage. Who is right? Probably both camps are correct.

The number of iPhone customers who are browsing the web on a regular basis is an impressive percentage of the number of iPhones that have been sold, but a very low percentage of all of the phones in use today and hardly enough to have much of an impact on ARPU numbers. But the Internet companies have convinced many in the wireless industry that browsing for information is the highest and best use for wireless broadband--a desktop experience in the palm of our hands. Yahoo! does not seem to believe that, or at least not as much, since it has done a nice job on its new intelligent wireless browser. It remains to be seen if web browsing will, in fact, continue to be the main factor driving broadband access. Remember that today, 74 percent of wireless customers don't use data services because "they are too hard to figure out."

Another problem with data usage is the sheer amount of applications and information out there. Network operators realize it is difficult to find what is available. A lot of work is being done on intelligent search engines and even voice search, but it is still almost impossible for the typical customer to find out what applications and services are out there.

If we can assist the network operators in persuading more people to try wireless wide-area broadband, everyone in the content or applications business will have a larger total available market so they should be able to sell more products and make more money. So not only are the network operators vested in getting their customers to use more wireless wide-area broadband, the content and applications community should be as well.

How do you start? Perhaps by analyzing the types of applications and content you are presently providing to the wireless community. Do you simply use SMS, MMS and/or a WAP browser to deliver your content? Do you do that because it is easier than building applications to deliver the content to the multiplicity of wireless devices in the world so you pick the lowest common denominator? That makes sense, or at least it did, but I propose that you look at ways to make your applications smarter and, therefore, more in demand. How do you do that?

One way is to figure out a way to go the Internet in the background without requiring customers to use a browser. There are some applications that already do this--those that find the nearest ATM or restaurant, and others--but how about making things a little more interactive. Recently on a panel about operating systems I was moderating, the gentleman from Google said that it made no sense to him that he could not simply highlight a name and address in his address book and with one keystroke have that information sent to Google Earth so the person's location would automatically be entered into Google Earth. My example is that I don't want to leave my calendar to look up a flight using a browser, I want my calendar to be connected in real time to a back-end that will automatically find the status of the fight and the weather at my destination and update my calendar with any changes.

As an industry, we all want the same thing: more customers making use of data services. This will drive growth on the networks and provide a better income for those building the applications or providing the information, even if the payment method is by advertising. I maintain that to grow this type of data usage, we have to be smarter about it and not simply take today's Internet wireless.

Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide.

To learn more about Seybold, go to www.andrewseybold.com [1].