The Other Challenge of 3G
By Carlo Longino, Tue Jan 29 00:00:00 GMT 2002

Marketing mobile data services will pose quite a challenge for operators.

As operators build out their networks, their cost of delivering service has plummeted. Most mobile voice markets are at a point where airtime is a commodity – a product with zero inherent costs and 100% profit margins. The playing field is essentially level, where price and coverage – once the key factors in selling their service -- are no longer competitive metrics, so the key becomes service differentiation, whether real or perceived.

There’s little difference, in most cases, between the services carriers offer. Innovations don’t remain so for long, as operators constantly scramble to make sure their offerings equal those of their competitors. Even in countries with multiple wireless standards, carriers all offer essentially the same services.

But new challenges are emerging as markets – and mobile data services - evolve. The advent of 3G will bring a number of new carriers to market, and these companies must quickly establish a presence to hope to compete with incumbent competitors. As other operators are spun off or sold, they (and their buyers) must often build awareness of a new brand. And as these companies fight for customers, selling users on mobile data services will also be key to revenue growth.

This scenario offers up quite a marketing challenge. When there’s parity among the other elements of the equation, marketing becomes the key for growth – and in some cases, survival.

Divide – and conquer

Although i-mode is built on a sound technological foundation, marketing has proven an essential element of the service’s success – both in how NTT DoCoMo sells it to consumers, in its pricing strategy, and in luring content providers and the customers to top-notch content.

i-mode came about when DoCoMo re-engineered its mobile network to use packet switching in an effort to increase its capacity. This created a challenge for the company to capitalize on the new networks’ data capabilities and convince customers to use data services, whereby DoCoMo could charge per-packet for the information delivered. Ever-mindful of usability, DoCoMo marketed i-mode as something unrelated to – and easier to use – than the Web.

While European carriers were busy trying to educate users on just what exactly WAP was (and completely failing by describing it as “the Internet in your pocket”), i-mode was selling itself on the services it offered rather than its techy features. “Many people don't realize how effective NTT DoCoMo has been at educating consumers about the benefits of i-mode,” says Tim Clark, the senior strategy manager for business integrator Ion Global’s Japan practice, and the editor-in-chief of the Carlo Longino is a freelance writer based in Austin, Texas. His previous experience includes work for The Wall Street Journal, Dow Jones Newswires, and Hoover's Online.