I-MODE ANTICIPATION GRABS MOBILE INTERNET SPOTLIGHT

Carriers emphasize substance over style with emerging wireless data

The wireless industry is waiting for the day AT&T Wireless launches services like i-mode, the world's most successful wireless data service offered by Japanese mobile giant NTT DoCoMo, which owns 15% of the U.S. operator.

DoCoMo President Keiji Tachikawa told attendees of last week's Cellular Telecommunications and Internet Association's Wireless 2002 conference in Orlando that AT&T Wireless would launch i-mode service on its GPRS network by the second half of this year. And the pressure is on. Some industry watchers believe the success of the U.S. wireless Internet market hangs in the balance.

“There is so much mystique and pressure,” said Andy Willett, vice president of data services and mobile multimedia services for AT&T Wireless. “People think it's going to be able to cook and serve dinner. It's impossible to surpass the expectation of the analyst community.”

Expectations are high because DoCoMo is the world's most successful wireless Internet provider, adding more than 31 million users during the last three years while letting customers download streaming video and play games with rich graphics on color screens and Java platforms.

AT&T Wireless' offerings will include e-mail, messaging, calendars, contacts and entertainment using a dual-mode browser that incorporates DoCoMo's chtml browser and a WAP browser. But Java services probably won't be available this year, Willett said.

“People need to remember that DoCoMo launched on a monochrome screen,” he said. “These services will also get better.”

Other U.S. carriers also are working to reset the expectations of wireless data. Operators in Orlando talked about reasonable data speeds, showcased services available today and warned that wireless data offerings won't change the industry overnight.

“I've always said that the industry ought to be looking at wireless data as an evolution, not a revolution,” said Cingular Wireless President Stephen Carter.

Cingular was the first U.S. operator to offer downloadable ring tones last June. Within six months, downloads jumped from 1000 per month to 350,000 per month, Carter said. Likewise, Cingular customers sent 100,000 short messages before the carrier marketed the service.

Sprint PCS CEO and President Charles Levine forecasts a slow but steady increase in average revenue per user (ARPU) after Sprint PCS launches high-speed 1X technology this summer.

“We could be pleasantly surprised,” Levine said. “3G will drive incremental voice and data.”

Wireless high-speed connectivity for laptops already is a compelling application for Verizon Wireless, which launched 1X in select cities earlier this year. Sources close to the company indicate Verizon is selling about 2500 Sierra Wireless PCMCIA Aircards per month without advertising the service.

Analysts have theorized that the wireless Internet might not be as successful in the U.S. because computers outnumber mobile phones. In Japan, where PC penetration is low, customers use mobile phones as a primary way of accessing the Internet. So CTIA attendees were pleasantly surprised when KT Freetel President and CEO Yong Kyung Lee reported ARPU increased threefold after his company launched 1X technology throughout Korea, despite a 50% penetration rate of connected computers.

“High-speed computer users want high-speed wireless Internet,” Lee said.