Internet Mobile for Business:
So far from expectations ?

June 18, 2001 - In Europe, nearly 26% of employees in large companies have a GSM handset for professional use, which is now higher than the rate regarding laptops equipment (16% of employees) and much more than equipment in PDAs (4%).

However, voice usage is still dominant: if more than two thirds of companies have at least one WAP handset, this is often a privilege for high level managers and, on average, only one employee out of 24 has such a device. Furthermore, less than half of the companies equipped with WAP use it for data applications.

WAP is used mainly for basic applications such as messaging, schedule consultation or Intranet access. Vertical applications such as maintenance, CRM, ERP, fleet management, etc. have been implemented only in a few companies.

About one third of the companies have already implemented Internet Mobile applications; there should be 50% in the near future. The main reason for implementing Internet Mobile solutions is to facilitate exchange, notably through messaging. Indeed many implemented applications are based on SMS solutions. But Internet Mobile is also used by some pioneer companies for advanced functions such as CRM, e-procurement, market places or supply chain. Even if only a few have implemented such applications, most companies are investigating Internet Mobile for the above mentioned functions in order to increase productivity and acquire new clients. But the integration of Internet Mobile applications in existing information systems and middleware requires substantial efforts from companies and suppliers.

As for the expectations, users' concerns are mainly the types of devices, debit rates, tariffing, costs and security:

• In terms of devices, laptop computers are considered as the most suitable terminals (25% of all respondants and 37% of companies with Internet Mobile applications), followed by cellular handsets (12% and 16% respectively) and PDAs (6% and 14%). In fact companies do not want a unique device. It depends on the type of application and the place where employees work

• In terms of speed, current data rate is not sufficient but there is no immediate need for high speed; 60 kbit/s could be enough for most users and consequently, GPRS could satisfy a large part of the market in the short term

• For tariffing, basic voice services should be free of charge and companies would prefer a billing by volume of data or flat rate

• In terms of investments, development costs is a major concern for one third of the companies. The cost of terminals is also seen as an obstacle for the smallest companies

• Finally, security is a big challenge as users want to be sure that all elements are protected (device, network, gateway, server).

In the USA, the situation is quite different as the base of cellular users is significantly lower than in Europe (only 40 subscribers per 100 inhabitants) and the approach towards Wireless Internet is very pragmatic. Users, especially within businesses, are looking for comfortable, easy-to-use and relatively cheap solutions: the development of wireless packet network connections to PDAs is largely illustrative of that. As for operators, they prefer to upgrade their existing networks in the short term (using CDPD for instance) rather than forcing their migration to 3G networks.

In Asia, there is a potential good outlook for Wireless Internet with Japan and South Korea leading the market. In Japan, there are now more than 37 million Wireless Internet users (22 million users for NTT DoCoMo's i-mode). However, in most cases, there is no clear differentiation between residential and business users in terms of marketing approaches and offers. In the medium and long-term, the Chinese market should create a strong dynamics as the cellular base is increasing rapidly (about 115 million users by May 2001) and should serve as a basis for advanced services, rather than fixed network.

Methodology

Executives from 300 companies were interviewed in March 2001. This survey was based on a representative random sample of large companies who employ more than 500 employees (to be referred to as "large companies" henceforth). Quotas of geographical zones and sectors were set to ensure that the results would not be dominated by big countries and sectors with many companies. Countries were divided into 6 areas: France, Germany, Scandinavia (Denmark, Sweden, Finland and Norway), South Europe (Italy, Spain, Portugal and Greece) and "Others" (Belgium, The Netherlands, Switzerland and Austria). Activities were divided into three sectors: industry, commerce and services.

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Cap Gemini Ernst & Young is one of the largest management and IT consulting firms in the world. The company offers management and IT consulting services, systems integration, and technology development, design and outsourcing capabilities on a global scale to help businesses continue to implement growth strategies and leverage technology in the new economy. The organization employs about 60,000 people worldwide and reports global revenues of about 8.5 billion euros (2000 pro forma).

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Since 1977, IDATE, one of the leading skills centres in Europe specialising in studies of information and communication technology sectors, offers the following: an operational consultancy (surveys and expert missions); a world observatory for the communication sectors (multiclient studies, a techno-economic and strategic monitoring system); a top-flight gathering place for discussion and debate (the annual International Conference of IDATE, the review COMMUNICATIONS & STRATEGIES, IDATE Foundation of firms, the European research network ENCIP...).

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