Sprint sees advertising-supported mobile services

Sprint expects mobile data services to be partly supported by advertising in the coming years, an executive said Tuesday.

Sprint sees many new opportunities emerging in mobile data services in the coming years, among them the chance to sell advertising on its mobile entertainment offerings, a company executive told a wireless conference on Tuesday.

"It's inescapable that that's a great opportunity over the long term," said Paul Reddick, vice president of business development, strategy and planning at Sprint PCS, the carrier's mobile division.

Sprint offers games, TV and other mobile content today that is fully supported by customer fees. It's not clear yet what form advertising might take, whether commercials inserted into shows and games or some other delivery method, Reddick said. He spoke on a panel discussion at the Wireless Ventures conference in Redwood Shores, California.

The carrier, which agreed late last year to acquire mobile operator Nextel Communications, also sees strong potential for location-based services and the use of handsets as electronic wallets, Reddick said. However, new data services aren't yet a big magnet for subscribers, he said.

The ability to locate a subscriber's handset clears the way for practical applications such as finding friends, tracking family members or a fleet of company vehicles or locating a misplaced device, Reddick said. Nextel, an early provider of location-based services, excels in this area, he said.

Sprint also is interested in "near field communications," and in particular RFID (radio frequency identification), to let subscribers use handsets like credit cards, he said. An RFID reader can collect information from RFID chips in phones or other objects from a distance of several feet. Ultimately, consumers could load their credit card information into their handsets and easily pay bills at stores and restaurants, Reddick said.

Such technology is already undergoing trials, according to Steve Hooper, a partner at Ignition Partners, who also appeared on the panel. But both men cautioned that the technology will take years to become widely deployed. Significant and costly changes will be needed in store payment systems and retail employee training -- changes that Sprint won't pay for, Reddick said. He hopes the credit card companies will pave the way for handset-based payments by rolling out contactless credit cards.

Data services and advanced applications such as payment by phone could eventually draw customers to a mobile operator and keep them from switching carriers, Reddick said. In fact, some MVNOs (mobile virtual network operators) on Sprint's network, such as sports cable network ESPN's ESPN Mobile, are counting on that effect, he said. But today, only about 4 percent of customer "churn" decisions are related to those factors, Reddick said. Most mobile users change operators because of coverage and price, he said.

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Stephen Lawson

IDG News Service
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