While i-mode is being hailed as the ‘second coming’ for European mobile data services, various obstacles may deter its uptake. In particular, KPN is not rolling out a pay-as-you-go service – instead, it requires a subscription. This is likely to deter young users, whose viral marketing has been one of the factors driving the service’s Japanese success.
KPN Mobile will launch i-mode mobile Internet in its Dutch home market on Thursday.
NTT DoCoMo’s i-mode will make its debut in the Netherlands on Thursday, when it is rolled out to leading operator KPN’s subscribers.
KPN expects a million i-mode subscribers in 2003, from across Germany, the Netherlands and Belgium. Hitting this target would herald a ‘second coming’ for the mobile data value chain, offering hope to telcos and content developers alike.
The service will be made up of information and entertainment, including news, games, movie trailers and ring tones. It will also offer SMS and email, and always-on access with a faster connection than GSM.
However, handsets will be expensive – in Germany, KPN charges E249 for an NEC handset, which is high for the highly subsidized European market. And while a Toshiba handset will launch this year, Europe’s biggest manufacturers (Nokia, Motorola and Sony Ericsson) are not currently signed up to develop i-mode for KPN.
Youth interest will be crucial in the early days of i-mode in Europe; ignoring young people will shrink the potential user base by a substantial margin. But KPN’s strategy may drive (mostly pre-pay) young customers away: i-mode users must subscribe for at least 24 months, with no pay-as-you-go alternative.
KPN hopes to migrate pre-pay users over to i-mode, with an SMS campaign targeting pay-as-you-go customers. But it’s questionable whether the pre-pay market will be a captive audience for i-mode, whose main characteristics – value added data services and customer lock-in through subscriptions – go against the pre-pay concept.
Yet despite the hurdles, i-mode does have the potential to become the most successful mobile data service in Europe. WAP’s failure is largely down to the lack of compelling content – and i-mode offers a proven business concept for developers and the rest of the value chain.
In the short term, KPN’s i-mode success will depend upon converting pre-pay customers into i-mode, although it also needs to ensure good service levels and handset availability.