Why did O2 decide to go with i-mode, and the partners it chose to implement the service? Here, those involved, the operator, the i-mode platform provider and the hardware provider recall the drivers for the project, and how it was put together.
When the UK-based mobile group O2 decided to launch an i-Mode mobile internet service in its home market and its Irish operation in November 2004, it selected NEC to provide the necessary network infrastructure together with Sun to provide the servers on which it runs.
O2 had already been offering a mobile internet service for four years based on i-Mode’s open standards-based rival, the Wireless Access Protocol (WAP), so the decision to invest in a second network technology was clearly not taken lightly. There were several reasons why O2 opted to deploy another mobile internet offering from its WAP service (O2 Active).
First, there is, as a general rule, only one i-Mode operator per country, creating the potential for differentiation in what, in the UK’s case, is a mature market with mobile penetration at saturation levels.
“The decision to go with an i-Mode service was primarily for the differentiation it could bring in the UK and Ireland, giving us the opportunity to offer high volumes of content with a different business model from WAP,” says Steve Hayhow, Head of i-Mode Platform at O2.
In the case of Germany, where O2 also has operations, another carrier — E-Plus — is already offering i-Mode, but is phasing it out; consequently O2 has delayed its launch so as not to overlap. O2 also has the right to sub-license to MVNOs on its i-Mode network.
Secondly, there is the fact that NTT DoCoMo’s proprietary technology is based on the cHTML markup language, a subset of regular HTML that makes migration of a fixed-line website to i-Mode a shorter journey than to WAP, which uses Wireless Markup Language, or WML.
Not only does this mean a less costly process for content providers to establish an i-Mode site, but also enables a richer user experience than is possible within WAP.
“From the customers’ perspective, i-Mode represents the availability of more content, for a reasonable financial outlay,” argues Hayhow, “and a faster experience, thanks to the way it holds menus and icons, with less clicks required to access the content they’re looking for.”
The Business Model
As O2’s head of i-Mode highlights, the business model that accompanies the technology is fundamentally different from the one used by carriers with WAP-based services.
The barriers to entry for content providers are considerably lower, not only because of the cHTML factor already mentioned, but also because the operator only charges commission fees on transactions carried out on so-called official i-Mode sites, i.e. those for which it carries out billing and settlement services.
The commission fee is also considerably lower, between a half and two-thirds below that of the fees paid by site operators on WAP carriers’ services.
Meanwhile unofficial sites, where a company has put up an i-Mode presence and sorts out its own payment model, go free, with the carrier making money on the traffic generated by its subscribers.
Hayhow comments that, in the early stages of i-Mode development the unofficial sites will not be a significant factor in the overall ecosystem and that, at the moment, “our main focus is on getting the brands we want on board.” O2 currently has over 100 content providers developing offerings for its i-Mode platform.
That said, he acknowledges that, if unofficial site development takes off as it has in Japan, the traffic it generates should be a significant contributor to O2’s overall revenue from i-Mode.
According to figures from DoCoMo, there are around 2,000 official i-Mode sites and in excess of 10,000 unofficial ones in Japan. Meanwhile Eurotechnology, a Japanese company dedicated to fomenting trade with and investment in Japan, says on its website that in summer 2004 there were 4,000 official sites and 80,000 unofficial. (www.eurotechnology.com/imode/faq-menu.html)
As for the way i-Mode services are sold to end customers, Hayhow notes that the subscription-based model means the customer develops “a continuous relationship with us, so that for instance a customer can subscribe to a games service that guarantees him or her a certain number each month, which keeps them coming to us for their games, even though the specific games themselves may vary from one month to the next.”
There were various factors that Hayhow himself attribute to NEC being chosen to provide the i-mode platform. First was the manufacturer’s track record. “NEC has unparalleled experience in supplying the creator and owner of i-Mode, namely DoCoMo in Japan, where it supports in excess of 40 million subscribers to the service,” Hayhow points out.
Second was its 75% market share, with the NEC Mobile Internet Platform (NEMIP), of operators that have deployed the infrastructure, giving it “by far the most extensive know-how, not only in the technology per se, but also in its adaptation to the differing realities of individual national markets,” according to Hayhow.
Third was the fact that NEC is the only i-Mode MIP provider that also makes phones, thus guaranteeing the availability of interoperable handsets from day one of the service’s commercial operation.
NEC’s experience in i-Mode paid dividends in the project execution time, recalled Ruth Brännvall, Head of Value Added Services for NEC in Europe.
“From the beginning of the design to delivery of a service ready for commercial availability was a total of five months,” she says. “Our first challenge was technical delivery, because i-Mode is a major platform,” agrees O2’s Hayhow, “but with NEC’s help, we were able to deliver on time.”
Accommodating MMS
Further evidence of NEC’s pedigree in i-Mode networking was its ability to respond rapidly to the fact that, unlike in Japan, deployments in Europe have had to accommodate the stronger initial revenue potential of MMS than mobile email.
Where Japanese subscribers use email as their messaging mode of preference, Europeans’ familiarity with “texting” since the era of SMS meant that integrating it into NEMIP and enabling, for instance, emails to be delivered as MMS and vice versa, was a prerequisite for O2.
Interestingly, the greater importance of SMS and MMS in Europe also meant that operators in that continent prefer to offer the service separately from email on the i-Mode menu, even though, in reality, both could be subsumed into a “Send a Message” option, with the network itself determining whether that be by a multimedia message or email.
Handsets at launch
The service launched offering two NEC phones, one a clamshell design, the N411i, and a candy bar phone, the N343i. Since then O2 has launched i-Mode phones from other manufacturers, and indeed, Hayhow cites as evidence of the growing clout of the technology in the international market the fact that major players in the handset market like Nokia are now developing devices to sell into i-Mode operators.
Partnering with SUN
NEC deployed NEMIP at O2, with its hardware partner for the European market, Sun Microsystems, providing the servers on which it runs. Paul da Silva, Sun’s business development director for the UK and Ireland, said his company’s selection as technology partner derived from the extent of its experience in i-Mode before it was introduced into Europe.
“Of the eight countries outside Europe in which i-Mode services had been implemented prior to its launch on this continent, Sun was the hardware platform in seven,” he comments, noting that the only exception is Japan itself.
“The IT project was hotly contested by a number of vendors, but our depth of collaboration with NEC worked in our favour, particularly because of the very tight deadline on the O2 project, which effectively required a six-week turnaround,” da Silva adds.
Sun is, of course, also the spiritual home of Java, the development environment on which NTT DoCoMo’s Doja is based, for the I-Mode world, so Sun was also well placed to come in not only with the hardware for the project, but also some educational services to support it,” da Silva says.
The project is seen but those involved as a testament to the focus and ability that enabled NEC, Sun and O2 to successfully launch i-Mode in such a tight timescale.
Hayhow concludes, “As we add more functionality and services, we will be relying on NEC and Sun to provide the same technical underpinning and support that so enabled the swift and smooth roll out of the initial phase of the service.”