Wednesday, March 26, 2008

BPN 1049 I-mode slowly closing up in Europe

KPN’s German subsidiary E-Plus has announced that it will stop its i-mode service. German i-mode subscribers will be offered a transfer to a flat fee data subscription for surfing and e-mailing for 5 euro a month.

Germany is the second largest market in Europe after the UK. O2 in the UK had already announced last year that it would stop with the service within two years. Also the Dutch subsidiary of KPN stopped its service quietly in the summer of 2007. It is not yet clear what KPN will do with the i-mode service of its Belgian subsidiary Base; but it is most likely that KPN will also terminate this service. KPN is presently withdrawing from participation in content services and putting more stress on ICT activities after the acquisition of the Ditch ICT conglomerate Getronics.

I-mode has been developed by NTT DoCoMo in Japan. It was launched in 1999 and attracted a lot of subscribers in Japan. Technically i-mode was a web service for GSM telephones, using compact HTML protocol for surfing and e-mailing on adapted mobile telephone devices with little memory. Interesting was the attention given to the part of content in this service. As the service needed specially edited pages, NTT DoCoMo organised content services within a walled garden. Anyone could offer his i-mode service outside the walled garden, but would not get the hallmark of the company.

In Europe KPN saw i-mode as the saviour for its company problems and negotiated a exclusive license for Europe, but they returned it and sold it only in Germany, The Netherlands and Belgium. Other European operators took a license: France (Bouygues Télécom), Spain (Telefónica), Italy (Wind), Greece (Cosmote), Israel (Cellcom), Ireland (O2), Bulgaria (Globul) and Russia (MTS). Outside Europe a license was given to Hongkong (3) and Taiwan (Far East Tone), Singapore (StarHub) and Australia (Telstra); but also this operator has announced termination of the service.

So after nine years i-mode is on its way out. The conclusion can bet hat it functioned as a precursor of 3G services. In history you can compare it to videotex as the precursor of internet. This rather rudimentary service lasted 17 years in The Netherlands and disappeared silently; nobody missed it. I-mode was also in a certain way a primitive service, which served as an intermediary service before the arrival of 3G/UMTS services.

Studies have been undertaken to explain the success between i-mode and other services like WAP. While WAP services became crap services i-mode was a success in Japan and not in Europe. The Japanese telecom markets are known to have certain characteristics that are not common in Europe. Among them are e.g. the strong grip of the operator on the whole value chain, the subsidizing of phones and the so-called positive feedback loop in which the success of on part of the value chain helps the other parts to succeed. Kari Jääskeläinen did a nice study and presentation on this topic. As indicated the editorial treatment of content by i-mode was part of the success compared to WAP services. Also the remuneration was an incentive for the information provider and was better than in other mobile services; but the European i-mode operators tampered with this the remuneration scheme for the information provider and lowered the percentage from 90 per cent.

Looking from the perspective of cultural usage of telephone services, it is interesting to see that the service was a big hit in Japan, while it was hardly a hot selling service in Europe. The service was attractive for Asians, but not for Europeans. The question is how much the cultural characteristics of Japan have contributed to the success of I-mode. One such characteristic is that the Japanese language is a language with graphic signs and not with western letters. Besides, the Japanese are known to be eager adapters of new technology. Another issue is that the daily rides by train to work can easily take 1-2 hour per direction thus giving a lot of time for surfing in the mobile Internet.

Blog Posting Number: 1049

Tags: mobile content, i-mode,

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