Power to the People
By Peggy Anne Salz, Tue Oct 22 00:00:00 GMT 2002

Communities are increasingly moving to wireless thanks to the rise of mobile intermediaries, new technologies and pay-as-you-go schemes that empower users - and pose a new threat to operators.


Due to their size and scope
mobile operators are best equipped to support large corporations in
their efforts to target even larger segments of mobile users. The
marriage of the two has effectively blurred the line between community
and commercialism – and brought the market mega-size SMS campaigns that
claim to promote close user interaction, but in reality bare a striking
resemblance to spam.

This is precisely why mobile communities
have had such a slow and disappointing start. “Operators can’t implant
the idea of a community or force one to spring up around whatever TV
series, sport or consumer product they happen to be pushing at the
time,” notes Jan Michael Hess, head of Mobile Economy, an independent
consulting and software development company based in Berlin. Operators
have gone for quantity and not quality, he argues, and have so far
failed to spark the interest and excitement that makes a mobile
community such a tight-knit, loyal, and potentially lucrative, customer
group.

Ironically, it’s the smaller companies, organizations
and clubs that can boast a community of passionate users who share an
interest - and a burning need to communicate it to their peers. Until
now this segment of the market was at the low end of the food chain –
and lacked the clout to request a customized service let alone ask for a
share of the revenues. However, the advent of payment schemes such as
premium and standard rate SMS and the emergence of a new breed of
so-called “cross-operator” providers, companies that direct SMS traffic
over any network at their disposal, are changing all the rules.


Size Matters

“No one has
really been looking at helping the little guys – the small portals, the
small companies and the small non-profit groups – to harness the power
of SMS,” says Fabien Ro(umlaut)hlinger, founder and CEO of W+R Software
GmbH, a German start-up specialized in SMS management tools. “Our role
in all of this is to empower mobile communities and be the company that
links users together.” W+R’s flagship product is software Röhlinger
calls the “mobile equivalent to [Windows] mail merge” because it allows
users to manage the delivery and storage of up to 5,000 SMS messages
from a PC. To further spice up its offer W+R recently released a version
of software that allows users to send logos and images – without an MMS
handset. Future software releases will allow the user to manage delivery
from a handheld device.

To date W+R counts over 670,000
registered users – a total growing at a rate of approximately 3,500 per
day. Customers range from family businesses to popular discotheques.
Surprisingly, strong growth is also coming from private individuals
anxious to streamline mobile communication within in their own peer
groups. One W+R customer, a local volunteer firefighters group, uses the
software to organize regular meetings as well as recreational
activities.

But it’s not just small groups. W+R also counts a
growing number of enterprise customers including 40 German portals and
customers including GMX.net, a leading German-language portal,
Ricardo.de, the German answer to Ebay, and Bertelsmann, a global media
giant headquartered in Germany. “Software like ours creates a more level
playing field and allows Internet communities to get more mileage out of
wireless,” Röhlinger says. W+R’s business model even allows its
customers to earn money based on how much community members use the
service. “Our software turns free SMS into a business model that doesn’t
burn money, but rather makes money.”

Come
Together


“Bars, cinemas and discos all have
their own communities – and it’s spreading like wildfire,” observes
Alexander Moulakakis, a business development director at Minick AG, a
mobile enabler headquartered in Hamburg and Zurich. The trend is
reminiscent of the early days of SMS, he observes. “SMS flourished
almost in spite of the operators’ efforts to rein it in – and mobile
communities are going the same way.”

In addition to supplying
services to small companies and communities, Minick also notes a rise in
demand from broadcast and media companies. “The first step to creating a
tight mobile community is to get these people acquainted and talking to
each other,” Moulakakis says. In this scenario chat and flirt become the
equivalent of killer apps -- and provide the glue that can hold groups
together.

Sensing a business opportunity, Minick went live last
year with a chat application that extends teletext interaction on the TV
screen to the mobile phone. The service, offered by RTL, Germany’s
largest TV broadcast station, invites users to send SMS messages to a
shortcode number. Mobile users can either chat one-to-many via SMS, and
post it on the station’s teletext page for all to see, or they can pick
out someone and start a private chat peer-to-peer. MTV and Vox, an RTL
partner station, have also introduced the application, which is among
the most successful in Europe and counts millions of mobile originated
SMS per month in Germany alone.

Strength in
Numbers


Mobile communities also provide Beamgate AG,
a Munich-based mobile commerce company, with a completely new market for
its stock of mobile advertising applications. “The initial idea was to
push information out to users,” notes Frank Henkies, Beamgate Head of
Operations. However, the explosive growth of mobile communities
requires a technology to close the loop. “Users need a feedback
channel,” Henkies observes. To this end Beamgate has fine-tuned its
patented platform for building and managing interactive, personalized,
region sensitive SMS applications to support two-way communication. This
approach has also allowed Beamgate to carve out a niche market providing
services to local German radio stations. The company also counts a
number of portals, firms and independent healthcare organizations among
its recent customer wins.

But one of the biggest surprises was
the spontaneous roller blade community that blasted on the scene last
year. It all began when a couple of hundred people wanted to roller
blade around Munich and needed a mobile service to organize the route.
Since then the community of roller blade enthusiasts has grown to over
30,000 – and shows no signs of stopping. “If there was ever a doubt
about the power of pull SMS, then this erased it,” Henkies says. “We are
absolutely convinced there is a huge opportunity in giving individuals a
voice in the mobile Internet.”

In Their Own
Write


In the search for a sticky-application to
aim at fledging communities, Materna Information & Communications, a
global software company headquartered in Germany, has stuck out in an
entirely new direction. Its best-kept secret is its SMS Publish
application, an application allowing individual users to “publish” to
small groups using a mobile handset. The application, which is live with
Vodafone and O2 in Germany, Orange in Switzerland and tele.ring in
Austria, is experiencing a “renaissance,” according to Materna product
marketing manager Dirk Markner.

“In a way we were a bit ahead
of our time,” he jokes. “It wasn’t immediately obvious what effect
publishing would have, but now the industry is getting wise to its
potential.” Similar to the fixed Internet, where e-publishing created a
new genre of newsletter-like publications, this new “m-publishing”
allows communities to connect and communicate on the move.

“The
service is very popular with the soccer clubs and the gay community and
the traffic it generates is particularly high,” Markner notes. Either
the “publisher” user bears all the costs for sending the messages, but
makes money from “subscribers,” or the “publisher” gets a revenue share
to cover the costs of the SMS in both directions. In professional soccer
clubs, the application is used to deliver a “fan-zine.” Maternal is also
currently developing a publishing application that makes use of MMS and
allows the “publisher” to post his images and messages at a website.
“When it’s visual, then it will truly be viral,” he
concludes.

Mobile communities are one the rise, empowered by a
handful of companies that are willing to play the middleman in this new
and complex business model. Granted the spread of premium and standard
rate SMS effectively allows small providers, portals and private persons
to charge for mobile services across all the networks, but the catch
will be coming up with content that community members are willing to pay
for on regular basis. While user groups might flinch at the thought of
bringing advertising or sponsorship back into the picture, only the most
die-hard communities will probably survive without it.

It’s a
mystery why operators aren’t focusing more attention on building mobile
communities and appear to have left the market to intermediaries. A
smart way to get back in the picture might be to “sponsor” a virtual
space where community members meet in much the same way that
corporations support non-profit organizations by donating supplies or by
providing them with cheap office space. They could offer free SMS or
MMS – or they could simply abandon their walled garden approach and
attract communities to settle in their open networks. No matter what
course operators take, they need to be mindful that community members
may want support, but they demand autonomy. If operators can’t abide,
then they will be upstaged by eager providers who can.


Peggy Anne Salz is a freelance author
who likes to go beyond the day-to-day developments in the mobile space
to grapple with the toughest issue: where the industry is going.Her work
has appeared in a number of publications including Time, Fortune and The
Wall Street Journal Europe, as well as Communications Week
International, where she is one of the editors.