Home EuropeEurope I 2008 Personalisation 2.0 – the mobile Internet

Personalisation 2.0 – the mobile Internet

by david.nunes
Laurent Lafarge Issue: Europe I 2008
Article no.: 10
Topic: Personalisation 2.0 – the mobile Internet
Author: Laurent Lafarge
Title: CEO
Organisation: eServGlobal
PDF size: 254KB

About author

Laurent Lafarge is the CEO of eServGlobal. Prior to joining eServGlobal, he was Chief Operating Officer for Netcentrex Comverse. Mr Lafarge served as Vice-President for Europe and Managing Director of Lucent Technologies France and Belgium, Global Account Executive World of France Telecom Group, and was overseeing Lucent’s activities in North Africa. He was a member of Lucent Technologies Europe Executive Committee and a member of Lucent Technologies Inc World Senior Leadership Team. At HP, Mr Lafarge also held senior roles such as General Manager of Services and Support, General Manager of the Enterprise Computing Organization. He was a member of HP France Executive Committee and of the European Sales Management Committee. He has also held several positions in sales within the telecom business units at companies such as Control Data, Unisys and Tandem. Mr Lafarge is a non-Executive Director in France of several innovative tech companies. Mr Lafarge was named by the French Minister for the Economy, Finance and Industry ‘Chevalier dans l’Ordre National du Mérite’ in 2004. Laurent Lafarge is a graduate of the ISG business school in France and completed the Executive Management Programme at the Wharton School of the University of Pennsylvania, USA.

Article abstract

Mobile Internet growth is now driven less by business need than by personal want. Virtual worlds such as Second Life, social networking sites such as Facebook and MySpace, online games and user-generated content, already significant Internet phenomena, should become important mobile phenomena as well. The use of mobile phones as a payment and funds transfer mechanism is also growing for downloaded content, online payments, in-store purchases and micro-payments for public transport, parking tickets, bill payments, m-ticketing for events and the like.

Full Article

Moving from need to want The original models of telecommunications, and equally the Internet, were designed to fulfil users’ basic needs for communication and information exchange. However, the exponential growth in recreational and entertainment Websites and online applications has created a new business model, where fulfiling users’ personal desires is of supreme importance. The Internet is not only used for business but is a social and community tool, with many users spending significant amounts of time in virtual worlds such as Second Life, and on social networking sites such as Facebook and MySpace, as well as in multiplayer online games such as World of Warcraft. User-generated content has become as significant as published content, with blogging, video sharing such as YouTube, and micro-communication sites such as Twitter. The World of Warcraft online game is an example of a completely self-contained ecosystem with its own user community catering to user desire. Users engage in recreational activities, share information and communicate. The World of Warcraft even has its own payment system, so that players can purchase virtual goods and services for their online characters to use. Mobile – the ubiquitous device Two milestones in mobile communication were reached recently. It is now 15 years since the first SMS (Short Message Service) was sent and, now, 26 years after the first mobile network was created, the number of mobile subscribers has reached 50 per cent of the world’s population. The Orange Digital Media Index, published in early December, surveyed Orange mobile customers in the UK. It shows that rather than using mobile phones for just voice calls and text messaging, customers are increasingly exploring the mobile Internet and using email and social networking sites to keep in touch. Now more than ever, mobile phones are part of everyday life and are, increasingly, enmeshed with the Internet. The boundaries between offline and online worlds are disappearing as people increasingly live their lives online, forming intense emotional connections to virtual environments. Mobile phones are an important part of this; they support the constant need to be connected. For example, a recent French charity event, Téléthon 2007, provided a dedicated space on Second Life for users to participate in sporting and music activities, but also to learn more about medical research into hereditary diseases, and donate online. Bloggers could download content about the event to include in their blogs and promote the event within their community of readers. Mobile users could access the Website for the event on their telephone, as well as download paying content – the download revenue went towards research. The user / publisher This new generation of mobile users accustomed to personalisation, and the ability to generate their own content online, expect their mobile phone to be a flexible communication tool that supports all their online activities. They demand increasingly complex services to manage ‘egocasting’ (total control over what we watch and hear in strict accordance with personal taste), as well as traditional voice or message communications, whether via SMS or MMS. Users can now create their own content on their mobile phones – often mixing in, or remixing, other elements such as music and graphics – and upload it directly to the Web using SMS or Multimedia Message Services (MMS), to produce microblogs and videoblogs. More revenue, more complexity This increased traffic is also generating new sources of revenue for mobile service providers seeking to supplement the decline in their ARPU (average revenue per user), common in the European market. New business models are emerging that include offering third-party content on a revenue sharing basis, enable sponsorship of services, and allow third parties to insert advertising into mobile communication streams. A simple two-way, subscriber-service provider model no longer exists; instead the service provider must manage secure payment providers and other third-party application providers. Mobile-Internet convergence can expand the range of communication services provided. While these services can boost revenue, they also add complexity to the charging and billing requirements for service providers. The fragmentation of user behaviour also requires flexible profiling and targeting of different customer types to better respond to their needs. Subscribers increasingly need incentives and promotions to boost their loyalty and usage. Keep it simple, stupid In the 20th century, there were only a dozen basic market types, each containing several million users. Fragmentation and personalisation means that service providers in the 21st century must cater to several million markets, each of a dozen users. The business model has changed from selling one set of products, to offering a far greater range of customisable services for users. As the complexity of services increases, service providers need more sophisticated management tools – but at the same time they need to keep the user experience extremely simple, to encourage uptake. New payment options Mobile phones are single devices used daily by millions of users, but they are not limited to person-to-person communications. They can also function as a kind of mobile wallet, giving users more flexibility when making online payments, in-store purchases or bill payments. Users trust service providers to deliver a communication service, and this existing relationship can be expanded to deliver payment services, based on the users’ existing account. In users’ online lives, virtual payment is an area of almost-unlimited potential, driven by the huge uptake of virtual worlds such as Second Life or World of Warcraft, spawning passionate user communities. These online communities have created an unexpected market for payment methods, as users convert real life currency into virtual currencies, such as Linden dollars, used in Second Life, or QQ coins, issued by Tencent, China’s largest instant-messaging service provider. Mobile payment will also facilitate online purchasing, whether for physical items such as books and CDs, or the rapidly growing area of digital content purchases, such as downloadable music, videos, or skills and accessories for use in online games. Mobile payment is already used to pay for downloading digital content, such as ringtones or screen wallpaper, directly to mobile phones. Mobile payments could provide the first real alternative for online credit card payments. Given the nature of payment transactions, and the fact that they can be confirmed in real-time using SMS, and personal identification number entry to provide a double validation for extra security, gives payments via mobile phones a real advantage. The potential for mobile payments is enormous. Other applications of mobile payment already in use internationally include micro-payments for small expenditure such as public transport, parking tickets, bill payments, m-ticketing for events, cash-in and cash-out services similar to an ATM card, and person-to-person money transfers, including international remittances for people working abroad. In the future, mobile users may use their telephones for all forms of payment or money transfer. More sophisticated users, greater personalisation, greater convergence between fixed, mobile and Internet platforms, more players, including video game companies and Internet players, and more ways of creating and publishing content, all lead to an increasingly fragmented and complex ecosystem, far beyond that of traditional telecommunication systems. Mobile service providers who offer services that conveniently and transparently cater to the personalisation and self-expression needs of their users can build loyalty and increase their revenues.

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