Mobile providers double up as ISPs - Martin Dawes Telecommunications Ltd, Talkline GmbH - Company Business and Marketing

CommunicationsWeek International, May 4, 1998 by Ian Scales

Two European mobile service airtime providers are taking a first step towards fixed/mobile data service offerings by launching Internet access services to run alongside, and eventually with, their mobile services.

Manchester, England-based cellular service provider Martin Dawes Telecommunications Ltd. last month launched a dial-up Internet access service, claiming to be the first U.K. telecoms operator to offer "convergent communications" solutions.

And German airtime reseller Talkline GmbH, of Elshorn, claims it will this month launch an Internet offering.

Both companies say their moves into Internet access will eventually allow them to package converged features, such as: e-mail notifications or messages delivered to the handset; mobile and fixed service control via the Web; and roaming arrangements for Internet access.

According to Ed English, senior manager at Deloitte Consulting Telecoms Practice, in London, such moves make sense for airtime resellers as the cellular market matures. "Becoming an ISP gets them into a growth market with relatively low investment and it's a way to deal with the commoditization of mobile," he said.

Competing on value

English added that once mobile networks reach parity on coverage and service quality, the only way to compete is on either price or on value added features. "Airtime providers don't own the full cost structure [of the network], so can't compete on price. That leaves value," he said.

Martin Dawes claims it has been planning and developing the service, called "Breathe on line," for a year. It claims the launch was preceded by a six-month service trial.

Breathe's product marketing manager, Philip May, said the company hoped to attract existing Internet users as well as its mobile customers.

May said the introduction of single billing and more specific converged services will be announced later this year, and that the company was looking to services that could use next generation screen-based mobile terminals.

According to English at Deloitte, the big payoff for converged service will be in the future. "If you look a little bit further out the controlling intelligence [for mobile services] won't necessarily lie in the GSM switching platforms-it could migrate to the IP environment. This opens a floodgate of new issues," he said.