Sprint’s Dziak: The Focus Is Still on Voice Services

Despite its recent break with Clearwire, Sprint is still pushing ahead with its mobile broadband plans. In fact, Sprint’s senior VP of corporate strategy Jack Dziak said that his company is two years ahead of mobile broadband competitors with its Xohm initiative.

During his speech, “Mobilizing the Internet: One Carrier’s Unique Perspective” at Mobile Internet World, Dziak also gave up some trends that he sees driving Sprint’s growth:

– The company is seeing 30% year-over-year growth in usage of wireless minutes as the telcos see wireline minutes decline.

– 10%-12% of ARPU at Sprint comes from data services.

– The Internet is mainstay of our daily life; The Internet audience in US is forecast to be 211 million by year-end.

– Broadband is evolving, with the focus moving towards content-rich applications and services.

– Even with the mobile phone turning into a “Swiss Army knife” device, the focus is still on voice services.

– The mobile Internet is not just about speed, but also about capacity.

Regarding Google’s Open Handset Alliance, Dziak sees it as an opportunity for third-parties to leverage Sprint’s assets, while at the same time allowing Sprint to “focus on what it does best – acting as an enabler.”

According to Dziak, Sprint likes the OHA vision for a number of reasons, including:

– It facilitates the customer’s unrestricted access to the mobile Internet.

– It provides tools for creative, innovative and compelling mobile apps.

– It drives mobile data usage.

– It provides the ability to define a new ecosystem and create new revenue opportunities, location-based service and user interfaces.

Sprint is already working with several device manufacturers to bring an open handset to market as quickly as possible.

Dziak sees three “musts” for the mobile Internet:

– Innovation in distribution. This will require a single chip for Wi-Fi and WiMAX.

– Innovation in multimedia solutions, such as mobilizing the MySpace and Facebook generation.

– Affordability of service; the need to offer products and services at very affordable prices.

One of the key elements needed to make a successful mobile Internet a reality is spectrum. “You gotta have it to offer it,” Dziak noted. Sprint holds industry-leading 2.5 GHz of spectrum that provides a balance between coverage and capacity, which he said, means more capacity at less cost.

Building Business Models for the Mobile Internet

A session during Mobile Internet World in Boston last month brought together executives from the complete mobile ecosystem – content, software, handset and operator – to discuss “Building Business Models for the Mobile Internet.”

When questioned about evidence of pent-up demand for the mobile Internet, Carl Taylor, director of applications and services, global technology strategy at Hutchison Whampoa Europe (parent company of the mobile operator 3), said that as soon as the operator moved to flat-rate data plans, the use of mobile Internet and data services “skyrocketed.” The flat-rate “puts us more on a demand curve, like ISPs” and gives consumers access to whatever they want when they want it, he said.

Tuomo Sihvola, head of Nokia’s WidSets.com unit, said that clearness in pricing is a must for the mobile Internet. In Finland, he said, he said there’s no proof of pent-up demand for mobile Internet access, but the feeling is that mobility will bring great freedom to users.

The question of obstacles was then put before the panel.

According to Jon von Tetzchner, CEO of Opera Software, the main hurdle is getting the word out to consumers that there’s more to the mobile Internet than just accessing the same Web pages that they do on the PC.

Lubna Dajani of Mobile Monday added that pricing is also a major roadblock, and that the industry needs to also raise awareness and improve the user experience.

Getting down to basics, Douglas Edwards, co-founder of Handmark, said simply, “browsing on a handset sucks.” He added that we need compelling services and an interface that consumers will use. Simply taking PC-based Web pages and moving them from desktop to mobile won’t solve the problem, Edwards believes, because the way we use mobile devices is extremely different. Taking the same old Web sites and putting them on a mobile phone is “just like taking a corporate brochure, putting it online and calling it a Web site,” he contends.

What will help, according to Edwards, are things like Ajax-based browsers and WidSets.

According to Sihvola, “mobile Web browsing is not a big enough use case to get me to do it daily.” To make a worthwhile business case, he said, requires applications that will drive consumers to use the mobile Internet on a daily basis. This would make it easier to get advertisers and, with them, ads that will benefit consumers.

In response to a question about open network access, Edwards said that it’s “inevitable,” noting that “change is afoot on both sides of the Atlantic.” As an example, he cited that carriers in the UK are starting to offer subsidized devices, while, at the same time, there’s a movement in the US to try to get away from subsidies.

Sihvola noted that Nokia has been licensing its platform for quite some time. He thinks Google’s Open Handset Alliance and Android platform are a good move “because we need more awareness.”

Mobile Internet: Now & Tomorrow

Vodafone is the leading mobile operator in the world by revenue. The European cellco, which also owns nearly half of US operator Verizon Wireless, was the first carrier to bring a handset with a color screen to Europe way back in 2002. It was also one of the companies to start the consumer data package market in the US and, in 2004, was one of the initial operators to use a 3G network, according to Alexandre Froment-Curtil, head of Vodafone live and mobile Internet, Vodafone group marketing.

During his keynote address at Yankee Group’s Mobile Internet World conference in Boston in November, Froment-Curtil also mentioned that Vodafone has some 100 million data subscribers in Europe with a market value worth some €6 billion.

Froment-Curtil told the audience that content, pricing and speed drove DSL adoption in the UK. Achieving mass market adoption for mobile is more difficult, he said, but noted that in 2007 many barriers have started coming down. Now, there are more networks and technology, lower tariffs and better business models such as advertising, which will help speed adoption.

One major point he stressed during the keynote is that the Internet on mobile is NOT the same as mobile Internet because “mobile Internet” seems like something new, whereas “Internet on mobile is comfortable and familiar.”

According to Vodafone’s own market research, 50% of its consumer customers are interested in the Internet on mobile, he said. More importantly, they’re willing to pay for it.

So, what do they want to do once they have this access?

– Enjoy (content, multimedia)

– Connect (e-mail, IM, blogs, UGC)

– Personal productivity (browsing, search, LBS, buy, bank)

Another key factor, Froment-Curtil said, is that they also want their familiar Internet usage habits on mobile. They’re not looking for an exact replica; they want a user interface that makes it easy to relate to the PC experience, but is designed for mobile.

Vodafone launched its Internet on mobile access in June. It’s live in nine countries. Since the launch, the number of unique URLs accessed has doubled “as users realize that they can go anywhere,” he said. The number of Web pages accessed per user has tripled.

Users also make frequent use of search and bookmarks. According to Froment-Curtil, the top search categories are adult (22%), community (21%) and downloads (18%).

One of the main differences between the Internet on the PC and the Internet on mobile, he said, is that on mobile, users want to find information, not browse.

As for what tomorrow will bring, “mobile will transform the Internet as it becomes the dominant tool for Internet access,” he said.