Sprint, Verizon Opening Doors to Mobile Content

By Antony Bruno

Sprint and Verizon Wireless may soon lower the walls on their networks, allowing their subscribers greater access to third-party content, including ringtones and graphics.

The mobile phone giants are responding to U.S. cell phone users' growing interest in buying content from sources other than their wireless carrier.

Allowing subscribers to access non-network content is a common practice for mobile operators in Europe, as well as U.S. carriers Cingular, Nextel and T-Mobile.

Sprint and Verizon, however, have taken a "walled garden" approach, restricting content to that offered directly through their own delivery portals.

Sprint is testing a system that would let content providers target its subscribers with sales and marketing campaigns through premium SMS messaging, otherwise known as "short codes."

A short code is a four- or five-digit number that works like an e-mail address but across various wireless carriers. Companies can place the short code in their advertising to generate customer responses.

In turn, subscribers can send a text message to a short code to request information or make purchases. The reply is delivered to the subscriber as a text message attachment. The charge is added to the mobile bill.

TEST RUN

According to John Styers, Sprint director of data communications services, the carrier is conducting short-code delivery trials with various partners, including Sony BMG and Warner Music Group.

"Both of them are in the midst of launching a premium SMS service," he says. "They want to be able to offer on their artist-specific Web sites the artists' content in ringtone fashion through SMS. So we are working with them to launch some of their artists' Web sites as well."

He says Sprint will slowly open its network after these trials, based on technology performance and customer feedback.

Verizon, which has operated the most tightly controlled network of all U.S. carriers, uses a content delivery system called BREW. Only content written and delivered via the BREW system can operate on Verizon's network and phones.

But Qualcomm, which created the BREW technology, has introduced a new version that would support non-BREW content. Sources say Verizon has told content aggregators that it intends to open its network to off-portal content before the end of the year. The carrier declined to comment for this story.

According to executives at QPass, a wireless transaction management firm, off-portal sales in the United States are beginning to explode. The company manages the off-portal sales activity for Cingular, Nextel, Boost Mobile and other carriers that together represent about half of the U.S. market.

In the last year, these carriers have seen off-portal content sales grow at a compound annual rate of 410 percent. In the last six months, total off-portal sales activity skyrocketed 1,024 percent, with a month-over-month growth of 141 percent this past quarter alone.

Even with the crumbling of these garden walls, however, less than 10 percent of all wireless content transactions in the United States are non-carrier. This pales in comparison with Europe, where about 80 percent of all mobile content sold is off-portal.

Reuters/Billboard

Copyright 2005 Reuters Limited.

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