Wireless clarion call: Stop watching clock

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Wireless-service providers must stop spending billions offering free phones and cheap airtime minutes and instead put their marketing money behind content-based services such as music, video, Web surfing, text messaging and IM that are transforming the cellphone into a personalized information and entertainment device.

That call to action came from Graeme Ferguson, executive head-content development at wireless giant Vodafone Group Services, who said wireless marketers have turned basic wireless-phone services into virtual commodities. Mr. Ferguson, speaking at the CTIA Wireless I.T. & Entertainment 2004 conference in San Francisco last week, said the industry needs "to take more responsibility to increase consumers' awareness of content services." He added, "It's in all our interest."

The mobile phone has risen to a rarefied place in today's culture: It's one of the three things a consumer won't leave home without, the other two being keys and cash. "It has the ubiquity of presence in a consumer mind-set," he said. Fueled by networks with higher bandwidth and devices with more sophisticated uses, global mobile content revenue is projected to grow from $8 billion this year to $35 billion by 2008. By some estimates, that will be about 25% of total global wireless revenue.

Mr. Ferguson challenged the marketing effectiveness of carriers' retail stores in teaching customers how to use their phones to make the most of the new applications available to them. "Are we doing as effective a job as we can?" he asked.

In the U.S., Vodafone owns part of Verizon Wireless, the nation's No. 2 carrier with 42.1 million subscribers. Verizon Wireless next year plans an aggressive rollout of a plethora of new content offerings under its "Get it now" program, according to an executive familiar with the situation.

In a conference call with analysts last week, Dennis Strigl, president-CEO of Verizon Wireless said Verizon Wireless had 14.6 million unique billable data, or information and entertainment content, about one-third of the carrier's subscribers. "This number of data users has grown 55% year-over-year," he said, with each customer spending an average of $7 a month on data, about 5% of service revenue.

Half of that revenue is text messaging, but the other half is remote access, downloads, multimedia, and other communication forms expected to grow richer with new higher speed networks and devices.

growing segment

Jeff Halleck, VP-consumer product marketing, Sprint, said customers are spending $5 a month on entertainment and information services, or about 8% of revenue. "There's a market here," he said.

Cingular is growing its position as a leader in text messaging, backing viewer voting for "Survivor," and, with the merger with AT&T Wireless, expected to take over its "American Idol" sponsorship and text-messaging element, said Vince Overbey, executive director-advertising and sponsorships.

"Voice is still the bread and butter of our business," he said. But entertainment and information based services "is a huge growing part of our business."

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