Two nations divided by a common technology – the Mobile Conundrum

The phrase of “two nations divided by a common language” to describe the differences between America and the UK is generally ascribed to Bernard Shaw.  Looking at a recent presentation on mHealth, it occurred to me that a very similar comment could be coined for the way we use our mobile phones.

The thought that prompted this came from a presentation by Andre Blackman on mHealth.  In it he asked his North Carolina audience the question of “How many mobile phones are equipped with SMS (text) function?”  The answer, which I suspect surprised a number of his audience, was “WOW – 95%”.  It struck me that had I been asking a similar question in Europe, I’d have phrased it differently, probably as “When was the last phone sold which didn’t have SMS?”  And I’d have been surprised to get many audience members suggesting a date any later than 2002 – ten years after the first SMS was sent.

It highlights something which I’ve been aware of for the last ten years – different countries and cultures are developing their mobile usage in different ways.  Multi-mode and multi-standard phones now mean that most of us around the world have the same basic technology in our hands.  Yet the way we use that and the way that our network operators promote it continues to diverge. 

In the early days of mobile, Europe, the US and Japan took quite different paths.  Europe coalesced very quickly around GSM with a common infrastructure and a vision of international roaming.  Japan, with Docomo’s dominance of the entire ecosystem developed i-Mode, starting off the whole non-voice mobile market.  And the US started with in-fighting between incompatible standards and a surprisingly local approach to mobility.  Even then, with the basic service of voice, the lines were being drawn that would establish a dichotomy between its use in Europe and the US.

For Europeans, it’s always been difficult to understand the concept of paying to receive a voice call.  Even if speech isn’t free (and that’s a concept too far for any mobile operator), it ought to be free to listen to a caller.  There’s anecdotal evidence that “pay to receive” was responsible for the growth and longevity of the pager market in the U.S. – something that never really caught on in Europe, because phone owners wanted to know who was calling before they answered the call and picked up the bill.  CLI – Caller Line Identity, not only informed GSM handset owners of who was calling, but got them interested in text displays on their mobiles or cellphones (or handys if you were German at that time). From that, the users in Europe discovered SMS and largely forced the networks to turn it into a service, despite their attempts to make it unusable.  Today, the irony is that it provides a major part of their income, both as standard text and twitter. 

Ten years on, it’s stranger that pay-to-receive still exists.  It seems an echo of an archaic time and business model.  Elsewhere in the world we’re seeing the things swing the other way, with operators like Virgin innovating to the point that their customers in India are paid to receive calls.

Once the US sorted out its multiple network standards and the concept of roaming, mobile ownership started to rise to similar levels of other countries.  That was where the division might have stopped.  It was always interesting to debate whether the US would develop different usage models, as its critical mass of mobile users came quickly, rather than experiencing the gradual development that had happened in Europe and Asia.  That opened the possibility that they would innovate without having to go through the learning steps that Europe had taken, giving them a blank canvas on which to paint new business models.  In the event it didn’t happen.  Instead US operators imposed a tight rein on user innovation.

Just as the technical ability of phones was blossoming, the control freakery of US operators extended down to disabling any other method of communicating with the handset.  The low point came when Verizon turned off Bluetooth in their handsets in an attempt to prevent users sharing photos.  It resulted in a class action from customers who took them to court and eventually won a pyrrhic victory of a $25 refund and a chance to jump to another network.  Not much of an incentive for a user base to try and move mobility forwards.

That level of control is still around in most operators to a greater or lesser degree all around the world.  Some operators are starting to rock the boat – notably 3 in the UK, who have enraged much of the rest of the industry in allowing free Skype calls.  It will be interesting to see where that particular path leads.  It has potential to be disruptive, particular if they embrace Android and extend it there.  But control’s not dead, it’s reinventing itself with Application Stores.

Application Stores are an interesting beasts.  Operators have struggled with them for years, battling with the problems of multiple different handsets with incompatible operating systems.  The solution was obvious – Docomo invented it ten years ago.  It was to remove the variants and control everything from the application store to the handset to ensure that it all works.  Their resulting i-mode model has developed to what I suspect is the most used data platform for mobile applications, with almost 50 million users (all of whom are in Japan).  It’s been tried elsewhere, but as soon as the handset design is divorced from the strict i-mode model the attraction of the offering invariably falls apart.

In July last year, Apple effectively copied / independently reinvented the i-Mode model and launched its App store.  It improved on the Docomo model with had some nice refinements – they got the network operators to pay to sell their phones as well as giving away some of their revenue without the need for Apple to invest in network infrastructure.  Customers loved the ease of use and jumped at the ease of parting with their cash.  The latter is vitally important.  Once again it heralds a difference than threatens to reopen the divide between the US and Europe.

Paying for applications and services has been a major problem for network operators.  They would like to be able to bill users for new services.  There’s a general acceptance (outside Nokia) that users won’t use credit cards to order content on their mobile.  It’s too complicated and too long winded.  Signing up to a website can shortcut this process, as Apple has discovered, but a large proportion of the potential market may not have regular web access outside their phone, or have the desire to split transactions in this way.  Outside the US, premium rate SMS has provided the solution, where purchases are billed with multiple, high value SMS messages.  Why it has failed to take off in the US is far from clear.  Once again, we have different billing models for the bulk of phone users, which drives a wedge through the way we roll out applications and services.

Although the title and Shavian quote compare the US and UK, perhaps the biggest surprise has come from how the third world has innovated on the mobile platform.  Like the US, they came to mobile late, with the same ability to think out of the box without the baggage of gradual development.  And they’ve done that with gusto.  In Africa and the Indian sub-continent operators are rolling out finance and medical applications that should shame the more developed nations.  As we play with more complex smartphone and applications stores, they have produced applications that are changing the way people live.

There is not doubt that mobile applications have a long way to go.  They can offer society enormous benefits, particularly in areas such as mHealth, where we desperately need to find more cost effective ways to pay for healthcare.  Although we like to think of Europe, the US and the Far East as a homogenous market, everything point to the fact that in mobile applications it is not.  Africa and India are showing us that we don’t necessarily need more technology – we just need to think how we can use it better.  We’ve got to get over that divide.  If we don’t then mobile applications risk remaining a collection of very small ponds without the critical mass to support a community of application developers.  Until we close that divide we’ll fall short of the promise of developing mobile to make it a useful element of society, rather than just playing to those who like their shiny toys.