A technological revolution in the development of mobile phones has begun to hit the high street. But most consumers remain unaware of the effect GPRS (general packet radio service) will have on future mobile phone users.
According to research by NOP World, only one-fifth of the population has heard of the term and even fewer understand the benefits the system will bring.
In real terms GPRS means users are “always connected, always online”, eradicating the need to dial up each time they want to access mobile Internet services available through WAP (wireless application protocol) or to check their e-mail. Initially, GPRS handsets will deliver data two to three times faster than the GSM system through which WAP is currently accessed.
Last month, BT Cellnet and Vodafone launched GPRS services aimed at the high end of the pay-monthly consumer market – although low-end pre-pay products are likely to become available before Christmas. Eventually all handsets on sale will have GPRS capability.
The industry is banking on mobile phone users, already struck by a wave of WAPathy, upgrading their handsets to GPRS and eventually to third generation mobile phones operating on UMTS (universal mobile telecommunication system), once the system reaches critical mass some time between 2003 and 2005.
But the industry is cautious about over-playing the benefits of GPRS having been stung by hype surrounding WAP – as epitomised by BT Cellnet’s Silver Surfer campaign, which was criticised for giving the impression that users could surf the Internet as they do on their PC.
However, the industry is also aware that in order to recoup the money it is paying for 3G – &£22.5bn for the UK licences – it has to find a way of reaping new funds from data transmission in an already mature voice market.
GPRS presents a challenge, as consumers will be charged not for the time they are connected to the mobile Internet, but for the amount of data transmitted. BT Cellnet offers a value bundle for consumers costing &£7.99 per month, which gives 1MB of free downloads every month, equating to 1,000 free WAP pages or 400 e-mails.
Ian Carrel, senior consultant with the Wireless Implementation Group at Cap Gemini Ernst & Young’s Telecom Media Network, says: “Although there is some evidence that people will pay for content on the Internet, it is questionable whether people will buy bulk access to data on their mobile phones.”
Estimates vary as to the number of active WAP users, but some industry experts put it at just under 1 million in the UK.
Vodafone refuses to reveal how many of its 12.3 million UK customers are WAP users, but says seven per cent of its UK revenues came from data services, including text messages, for the year ending March. BT Cellnet claims to have 11.2 million customers using voice services, of which 1.5 million customers have mobile Internet-enabled phones. One 2 One says it had 8.9 million subscribers at the end of March and in January 145,000 active WAP users. Orange UK in April claimed 11 million customers, but the last published figure for active WAP users in March was 265,170.
GPRS – a stepping stone to 3G – should be where the debt recovery programme starts, but it is likely to be a slow process.
Motorola UK consumer marketing manager Amanda Fisher says: “GPRS is the revolution, 3G the evolution. But it’s like any other technology based industry. It takes time for it to become the norm.”
Vodafone is the first network to embark on an advertising campaign, created by WCRS, which is solely related to GPRS. Aimed at the corporate market, it uses the term GPRS, but in the body copy explains the benefits of the system.
Liz Darran, a Vodafone account director at WCRS, says: “What we are trying to do is to make sure that there is a very tangible benefit in real terms [for GPRS] and to keep the language very human and not overly technical.”
But NOP World research, conducted in April, shows awareness of the term GPRS, even among potential corporate customers, was just 50 per cent, compared with 97 per cent for WAP and 59 per cent for 3G. Among small to medium-sized businesses (less than 500 employees) awareness of GPRS was 29 per cent, WAP 84 per cent and 3G 33 per cent. A separate poll of consumers conducted in February showed that awareness of GPRS was 21 per cent, WAP 84 per cent and 3G 29 per cent.
NOP World’s research director specialising in mobile markets, Colin Strong, says: “Even when people are aware of the term GPRS there is still a lot of confusion about the differences between GPRS and GSM, with most people focused on speed rather than the “always on”, which is perhaps a more important development.”
Strong warns the industry may fail to manage people’s expectations, as it did with WAP, and give consumers an unrealistic impression of data transmission speeds.
He says that the way forward is for the industry to sell the benefits of what is available on the mobile Internet rather than talk about the technology.
Fisher doubts the industry will use GPRS-specific marketing campaigns.
Instead, she says advertising campaigns are likely to encourage consumers to use mobile Internet services such as games, news portals and banking services.
The big stakes will be in the business market, targeting workers who are often away from their offices. BT Cellnet has already embarked on an advertising and direct marketing campaign for its mobile Internet portal for businesses, which provides trading platforms and information services initially for the financial services community and the construction industry. Its messaging service, ConnectedMail, allows users to receive e-mails, voicemail and faxes through a single inbox via their handset, PC or PDA.
Vodafone is also targeting the business community and last week introduced a service providing corporate customers access to their Microsoft Outlook system to check e-mails, calendar and contact information.
Handset manufacturers will also package products that can be marketed to those with different needs.
Sega has teamed up with Motorola, and Ericsson has partnered with Sony to develop mobile phone handsets with functional enhancements for playing games.
Steve Walker, UK marketing director for Ericsson’s consumer products division, which has already launched a GPRS phone, says: “Mobile Internet is not driven by one particular technology, there will be a number of enablers such as WAP together with GPRS and others like Blue Tooth [enables compatible products to transmit data without wires].”
It remains to be seen whether new applications and devices created to target key consumer groups will provide much-needed additional revenues for the networks that have banked their future on expensive technological advancements such as GPRS.