Data applications dig deeper into wireless

The proliferation of mobile communications and the Internet has created opportunity for wireless service providers to integrate voice and data on wireless devices.

These Internet-enabled tools are pushing carriers toward the adoption of a new suite of applications to deliver content, localized services and messaging.

Because carriers may not be able to do it alone, a new market niche has blossomed to provide the information and e-commerce services that wireless users are demanding.

To increase its strategic positioning and geographic reach, InfoSpace.com will acquire wireless ISP Saraide, which services Canada, Europe and Japan. The merged company is expected to expand its wireless services to more than 21 carriers worldwide.

"The combination enables us to provide their customers with our services and take advantage of their existing relationships," said Steve Shivers, general manager of InfoSpace.com's wireless and information appliances group. "We can provide more carriers with what they need to push wireless data forward. This way the carrier will grow the breadth of services it offers."

InfoSpace.com's wireless Internet services, which are device-independent, include personalized content, commerce capabilities, secure transactions and communication features such as instant messaging and e-mail.

While @mobile.com also offers wireless instant messaging to its customers that use current generation or wireless application protocol (WAP)-enabled handsets, all of InfoSpace.com's services provide a platform that lets wireless carriers support more than just WAP. In addition, the platform also supports PQA's for Palm VII, and protocols such as VXML, HDML and SMTP. The services also are compatible with a variety of gateway technologies such as WAP gateways from Ericsson, Nokia and Phone.com.

The company's advanced wireless Internet services are gaining momentum, with AT&T, BellSouth and Sprint looking to adopt them.

Seeking to pass on as many services as possible, the company also recently acquired Prio, which provides an enhanced e-commerce infrastructure that integrates online promotion technologies with a merchant's existing credit card processing infrastructure.

"The consolidation issue will be something we will continue to see in this space," said Barney Dewey, an analyst with The Andrew Seybold Group. Because this market still is developing, it may be hard to predict how things will play out. However, InfoSpace.com's two acquisitions represent the company's use of its capitalization to gain a favorable position. In addition, the moves will put pressure on other players, such as Phone.com, in the online services space, Dewey said.

Saraide's investor roster is stocked with many high-profile names, including Ericsson, GSM Capital, Microcell Telecommunications, Nortel Networks and Omnipoint Communications. GSM Capital has several large carrier investors, such as Aerial Communications, Deutsche Telekom, ESAT Digifone, France Telecom, Singapore Telecom and SmarTone.

The wireless world today is like the ISP market five years ago, Shivers said. Those that increase the value of their offerings survive. "They cannot be just a pipe. They need to provide services that enhance their relationship with customers," he said.

Not everyone can play in the apps arena, however. "From a carrier standpoint, it does not make sense for everyone to recreate the wheel," Shivers said. "Content and commerce will be available on the phone if carriers build off of our platform and then customize it."

Carriers already are getting the message. BellSouth recently teamed with MyWay.com in an effort to give its Internet customers access to their personalized portals via broadband and wireless connections, including interactive pagers, wireless phones and personal digital assistants. The carrier will participate in advertising and commerce revenues and receive a minority equity stake in the company.