Shake 'n' Bake

Wireless Internet access is all the rage, at least within the industry. Quickly deploying a full-service data package helps get consumers excited, too.

Now that wireless data finally is becoming reality, the race is on for service providers to deliver the most robust, technically unconstrained services as quickly as possible. For most, this effort has meant turning to third-party companies that specialize in Internet-content aggregation and integration while remaining invisible to subscribers.

The wireless-data service bureau is shaping up as yet another piece of the technology pie that wireless providers are electing to outsource. Several companies, including InfoSpace.com, Motorola, Phone.com and Wireless-Knowledge, have jumped into the fledgling wireless-Internet market and inked agreements with several wireless providers.

Many of these companies operate under a soup-to-nuts approach where they supply providers with all of the hardware, software and back-office support necessary to provide wireless data. What makes third-party companies particularly attractive is that most wireless providers have little experience with integrating the outside companies' hardware and software. In fact, among the providers that Wireless Review surveyed, all were using their own engineering teams to oversee wireless-data deployment and maintenance.

Ready, Set, Go
With its December 1999 acquisition of Saraide, InfoSpace.com currently has deals with more than 24 service providers worldwide, most platform-agnostic.

"The carriers simply can't do this themselves. They don't have the infrastructure," said Joni Hanson, InfoSpace.com director of investor relations. "It has taken us four years to develop what we can offer, and they can't innovate fast enough. If you think about it, why would they want to?"

Indeed, faced with daunting churn rates, service providers welcome the ability to provide enticing services such as personalized, 1-click access to stock quotes, weather, selected Web pages and, eventually, shopping.

Alltel just launched wireless-data trials in Little Rock, AR, and Charlotte, NC, using Phone.com's Up.Link server software. It plans to offer the service in most of its top-tier markets by the end of the year, but it will begin in acquired markets that already are using the Phone.com standard, as well as former Southwestco properties such as Phoenix.

"We talked about creating an in-house system, but to expedite the trial and get something up and rolling, the Phone.com solution was by far the best way to go," said Joe Gardner, Alltel manager of wireless data and handsets. "To restate an old quote, 'Creativity is great, but plagiarism is always quicker.' As technology evolves in the future, we will get more plug-and-play applications that our internal groups may be able to work with and develop or tweak one way or another, but for now this is clearly the way to go."

The same goes for US West Wireless, which recently partnered with InfoSpace.com for the launch of its BrowseNow service.

"There are a number of applications and services we do very well," said Jamey Mills, US West Wireless product manager for wireless Internet services. "But on the content side, that business is at this point better served by players that are already established in that area."

InfoSpace.com's range of cross-platform solutions also attracted US West Wireless. Besides its wireless business, US West also operates an ISP, is moving into broadband delivery and is developing an Internet-over-television service called WebVision.

"InfoSpace brings a rich set of products we can deliver to customers in a customizable fashion on the big and small screen, and the key is they are ready to go," Mills said.

Whither (Or Wither) the Brand?
Amid the growing debate over who owns an Internet customer, the motivation to outsource becomes even more attractive when a wireless provider can deliver new services that remain branded, or at least co-branded, under its own name.

Such is the promise made by just about all of the service bureaus, which promise a more controlled environment than simply dumping subscribers into a watered-down version of a Internet aggregator's site, such as Yahoo! or AOL, that carries its own strong brand.

"When a carrier chooses to go with InfoSpace, all the information gathered belongs to the carrier," Hanson said. "We are never in competition with the company for branding. We are able to offer them services that allow them to reduce churn and harness back to power of devices so they can get more money into their revenue stream."

The potential diluting of its brand isn't an issue for Alltel, although at present customers accessing data via their wireless handsets will see the Phone.com name on the portal when they initialize their handsets.

"It is not a concern for us at this stage," Gardner said. "With almost any Internet service you go through, once you get outside the normal portal offering to another site, you're going to get that name on the site. We will get into co-branding later as we discuss our commercial agreement."

One clear way to combat the watering-down of a brand is to keep a tight rein on customer relations.

"You really want to remain the single point of contact for the customer," Mills said. "Whether it is wireless data or something else, if you provide good service, they are going to stick with you."

All in the Family
Although the outsourcing trend is picking up steam, not every wireless provider, particularly those that already operate as ISPs, is comfortable taking too large a chunk of the business out of house.

BellSouth, for example, had planned to use the InfoSpace.com platform if phones were ready for roll-out last year. When shipments were delayed, it elected to go back to the drawing board and develop a wireless service with its existing Internet partner, TKTK, in which the company owns a stake. A version of BellSouth's MyWay.com portal will roll out in second quarter in GSM/WAP markets and launch this summer in TDMA markets.

"The corporation didn't feel it made sense anymore; we are taking a more integrated approach," Carlton Hill, BellSouth director of Internet initiatives, said of the decision to bypass a third party. "We are a landline ISP, and we are about to be a wireless ISP for all intents and purposes, so it makes sense to have our own content partnerships and do our own applications hosting. Corporately, we do have all the pieces in house, whether you are accessing the Internet through a home PC, a wireless phone or a pager in days to come."

However, Hill doesn't rule out the idea of teaming with an outside company down the road, particularly as WAP services take off.

"On the wireless side, our particular piece of the stake is about to grow so dynamically and rapidly that there may very well be some great, new bell-and-whistle that I can go out and add to the service rather than develop from the inside," Hill said. "We have the flexibility to do that. We are not wed to one place."

Olson (catholson@aol.com) is a freelance writer based in Alexandria, VA.