Wireless execs see U.S. embracing mobile data

NEW ORLEANS -- U.S. mobile users are starting to use data services in big numbers, but there are still barriers holding back adoption, according to a panel of wireless industry executives at the Mobile Entertainment Summit held here alongside this week's CTIA Wireless trade show.

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Multimedia messaging between users, multiplayer games, and taking and sharing digital photos are among the hottest uses of data services for wireless devices, according to the panel, made up of executives from wireless hardware and services companies. Although the U.S. has lagged Europe and Asia in use of data services, users here are catching up, they said.

More than 30 percent of customers signing up for voice services on AT&T Wireless Services' new GSM (Global System for Mobile Communications) are also buying subscriptions to data services, based on figures from December, and still more customers are buying data services without subscribing, on a charge-by-use basis, said Liz Schimel, vice president of business development at AT&T.

For customers who sign up for data services,  AT&T is seeing about an extra $8 per month in revenue, she added. Sprint PCS Group, Sprint's mobile arm, is seeing adoption rates "much better than 30 percent" for its PCS Vision data service, said Chip Novick,  vice president of the division's Consumer Strategic Business Unit.

Messaging has been a strong driving force for mobile data, especially since U.S. carriers established interoperability for their SMS (Short Message Service) services. AT&T Wireless in December characterized more than 3 million of its customers as active users of data messaging, even before the carrier kicked off a popular service tied to the Fox TV talent show "American Idol," Schimel said. AT&T Wireless processed more than 240 million text messages in December, she added.

Interoperability for MMS (Multimedia Messaging Service) should be implemented easily after U.S. carrier rollouts of the technology, which lets users exchange added elements such as pictures and sounds as well as text, Sprint's Novick said, because MMS is an established standard.

Streaming video also is coming soon, panelists said. Before the end of this year, there will be devices with Qualcomm chip sets that include MPEG4 capability and will be able to use Qualcomm's Brew software platform as a conduit for streaming video, said Gina Lombardi, senior vice president of marketing and product services at Qualcomm.

Motorola's UMTS (Universal Mobile Telecommunications Service) phones already have streaming video capability and the company will launch in the second half of the year phones that will support 12 frames per second of video, said Joe Coletta, vice president for applications and solutions at Motorola.

Improving billing and helping customers understand it better, making services easier to use through better interfaces and reducing power consumption are among the challenges that need to be faced before mobile data reaches its potential, panelists said.

"People don't know what it is they're paying for and how they're paying for it," said Donna Campbell, executive director of Telefonaktiebolaget LM Ericsson's Ericsson Mobility World division. When customers sign up for new data services, their monthly bills can instantly become much more complicated than they were for voice service alone, she said. They may also be higher than expected. Customers who are confused or surprised by the bill may be turned off from the new services.

Helping customers get used to new services is critical, judging from the results of global research by Ericsson, Campbell said.

"While people really want to use entertainment things, it's funny when you start asking about what they're going to pay for. ... [With camera phones] they'll actually pay up to 50 cents for a picture or a postcard or something, but then when you start asking them stuff that maybe they can't quite imagine doing ... on their phone, the paying goes down," Campbell said. A free introductory period may be needed to sell customers on those new services, she said.

Another key problem is power consumption, said Dannie Gladden-Green, worldwide OMAP (open multimedia applications processor) marketing director at Texas Instruments. The mobile data experience may end with users saying, "Wow, this was a great movie trailer, wow, this is a great game, but now my phone is dead," Gladden-Green said. There needs to be a balance between size, performance and power, she said.

Overall, assumptions about mobile data use in the U.S. vs. Europe may not hold true, some panelists said.

"Don't be misled by European examples. They are fond of pointing at the U.S. and saying the U.S. is so far behind," said Sprint's Novick. However, users here are paying for advanced services, he said. Average revenue per user for Sprint is roughly double that of most European carriers at $50 to $60, he said. Schimel said AT&T's number is similar.

In addition, not every region may like the same services, according to Motorola's Coletta.

"The U.S. did get a slow start ... but it may be a different kind of application that is going to work in the U.S. ," such as music, Coletta said.

CTIA Wireless, sponsored by the Cellular Telecommunications & Internet Association, will run Monday through Wednesday.