Dec 13, 2004 12:00 PM,

Multimedia's mobile metamorphosis

by Jason Meyers

Rod Randall has a vision of where wireless ultimately will fit in the overall scheme of telecom networks and services. It looks like this:

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“Let's say there's content I'm interested in, and I have not only entertainment-quality video and audio but also broadband Internet access and telephony running on my triple-play access. If I add a mobile service to that, it becomes very interesting — especially if I were to take entertainment video, games and music and make that available selectively over my mobile network.

“The whole mobile network becomes more valuable but also the mobility becomes a valuable asset that has never been available to the home-based triple play. It provides a connection between the two, and as a result, increases the viability of both.

“Then, as you start to integrate the advanced concept of presence into the whole story — where the network can understand the status of my presence — it becomes even more interesting: If I'm present in a Wi-Fi enabled location, I'm getting certain applications and features pointcasted to me, but if I'm present in an expensive roaming environment, I'm getting a different set of features with more selective capabilities.

“If you integrate mobility with intelligent presence capability and with the concept of content distribution — whether it's over a traditional cellular network or a Wi-Fi network — it presents very interesting ways to deliver content.

“Finally, combine all of that with the idea of a TiVo-like storage capability that is increasingly now available in mobile phones. If you have mobility, cheap storage, high-resolution graphics and broadband, multimodal wireless access, that becomes a very interesting connection to content.”

That must be what it's like to be inside the head of a wireless-focused venture capitalist — someone who not only has to constantly stay on top of all the next new things in mobile technology but also constantly think and rethink about how they all fit together. That's what Randall does for Vesbridge Partners (the networking-centric offshoot of the former St. Paul Venture Capital), where he is a senior managing director.

Where Randall and Vesbridge fit in that rapidly materializing mobile future is in the technologies that make its delivery possible — as Randall puts it, companies seeking to meet unmet needs.

“We like to not necessarily be the investor in content itself, but in the infrastructure that will enable that content,” he said. “For example, I believe there will be content owners that will launch MVNOs, and our investment with Visage is consistent with that play.”

Randall's reference is to Visage Mobile, the mobile virtual network operator enabler (or MVNE) that provides infrastructure and back-office support to content providers and other entities that hope to become purveyors of wireless services without building the underlying network support necessary to do so. St. Paul incubated Visage; the company is still part of Vesbridge's wireless portfolio, and Randall is on the Visage board.

“The relationship certainly goes beyond money, although that's much appreciated.,” said Tom Bobich, senior vice president of marketing and product development for Visage Mobile. “Rod has deep telecom expertise and is particularly active in connecting us with other sectors of the industry.”

Visage completed its B round of financing in early October and is currently readying for a commercial launch.

“That will put us out there as a full-featured MVNE,” Bobich said.

The momentum of the MVNO sector is marked not only by Visage's progress but also by some highly visible mobile launches, including one from ESPN — which was not supported by Visage but is an example of the kind of wireless effort Visage can support, Randall said.

“That's indicative of the kinds of things that will begin to happen at an accelerating rate, because the barrier preventing it from being doable has been systematically eliminated by Visage,” he said. “By having an underlying MVNO platform that's ready to go for brands to be able to launch a service is something that's never been heard of before.”

There again, Randall said, multimedia content is the critical element. And, with the availability of broadcast capabilities like the MediaFlo platform Qualcomm recently announced it is developing, distribution of content has the potential to be even more targeted.

“Being able to add a broadcast and a multicast overlay to a mobile network decreases the cost of delivering high-value data content — in other words, large files,” Randall said. “A media brand like an ESPN can use something like the MediaFlo scenario to broadcast content out without having to send an individual message to everyone who's interested. That will make it dramatically less expensive to be able to deliver broadcast content directly to the handset.”

Meanwhile, he said, the existence of an MVNO means that content could be provided pre-packaged and pre-programmed for specific subscribers — subscribers the provider already knows would want to receive them.

The total immersion approach that Randall takes to understanding and investing in the mobile industry is an essential part of Vesbridge's overall strategy, according to Zenas Hutcheson, a Vesbridge senior managing director who oversees investments in the enterprise IT, Web services, security and storage sectors. All the members of Vesbridge's investment team are active in business development on behalf of their portfolio companies, helping them understand customer requirements, he said.

“After the downturn, we're back to a phase where companies actually have to be built,” Hutcheson said. “That starts with having a knowledge of the end-user market and people with operational backgrounds. We want our guys to be players. They have to understand what wireline and wireless carriers need and what the big impacts are on large enterprise networks.”

In addition to those areas already mentioned, Vesbridge also has portfolio holdings in areas such as optical and access equipment and communications software. It all fits with Vesbridge's outlook on the high-tech investment environment, which Hutcheson conservatively described as offering “great rewards for the courageous few.”

Randall, for one, believes the wireless sector will be among the most rewarding — perhaps somewhat obviously, since that is his primary area of involvement and investment. But it's a sentiment that is echoed increasingly throughout the telecom industry, particularly as onetime wireline-only technology and service sectors like voice over IP (VoIP) and video overlap more and more into the wireless realm, and mobile becomes progressively more dominant in the voice realm.

The best way to understand how it all fits together is to turn once more to Randall's organized stream-of-consciousness method of explanation:

“Some of the more enlightened mobile operators have begun taking the view that they could link the mobile and broadband together — that they could have a mobile service that also has a linkage into the broadband voice scenario using VoIP. If the mobile service also offered dual-mode Wi-Fi/mobile phones, they get the beneficial effect of better coverage in the home and VoIP's lower-cost access when you're on Wi-Fi. In that scenario, it becomes easier to deliver very high-volume content when you're in high-bandwidth distribution environment.

“Voice is moving incrementally to wireless. I don't think it will ever go 100% wireless, but the natural proclivity is to have voice being more mobile and personal.”