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WAP: Teething troubles - Views on News from Equitymaster
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  • Dec 13, 2000

    WAP: Teething troubles

    Currently the focus of the software industry is to provide access to the Internet through mobile devices. The race is to deliver information where you want it, in your car, in your mobile phone, in your laptop or wherever you can imagine. The buzzword is WAP, which has caught the attention of a lot of Indian software companies.

    Wireless application protocol (WAP) is a set of networking rules by which mobiles devices like phones and hand held computers can exchange data with the Internet. WAP access needs a specific connection via an Internet service provider (ISP) in much the same way as a PC accesses the Internet. But the system will come into its own with the introduction of another enabling technology, general packet radio services (GPRS), a method of sending Internet information to mobile telephones at high speed.

    The procedural problems
    Not open in terms of development and maintenance
    No assurance of availability and stability
    Not patent-free
    No legitimacy as a standard

    WAP has not been a success outright. It has been subject to a lot of criticism, both from the consumers and from within the industry.

    WAP right now does not handle complex graphics. The web pages are often written in hypertext mark-up language (HTML), which is too complex for mobile phones to interpret. Therefore there is a need for wireless mark-up language (WML), which could greatly simplify download times and presentation. The screens are too small and the experience using WAP is certainly not exciting for the end user.

    In a global survey the results of which appeared on wapcongress.com revealed that 42% of the WAP users claimed that price was a factor that was restraining them from using WAP more frequently. The other complaints were low connection speed 43%, bad content 33% and hand set problems 18%.

    A part of the learned establishment opines that the premise of WAP itself is questionable. The assumptions behind WAP are that web-browsing capability can be adequately accomplished on a mobile phone, and this is something that will be of significant value to mobile phone users. That is yet to be proved.

    Initial implementers of WAP have had a terrible experience. They were frustrated with clumsy and badly implemented first-generation services. The other problems facing WAP were low connection speed and handset problems. The biggest hurdle is that the technology is relatively new and only a few know how to go about it.

    The technological problems
    User interface assumptions
    Extreme accommodation to existing networks
    Excessive re-invention in the name of wireless
    Vulnerable wireless transport layer security (WTLS)

    Anti-WAP groups claim that WAP is the result of a closed design process within a members-only club. It remains tightly controlled by the WAP Forum, is crippled by patents, and is riddled with technical design errors. The group has proposed Lightweight and Efficient Application Protocol (LEAP) as an alternative to WAP. LEAPís focus is on web based messaging. It is a standard that is open and is patent free. This is turning to be a competition for WAP, much like Linux is emerging as a threat to Windows. The bottom line is that the WAP has a long way to go.

    If we look at the potential markets, worldwide, the ratio of mobile telephone users to desktop Internet users is two to one. By 2005, when the number of mobile users is expected to top 1 bn, the ratio will be three to one. The number of mobile telephone users exceeds the number of desktop Internet users in all regions except North America. Estimations are that within three years, 50% of all mobile telephones will be internet-enabled. M-commerce could increase mobile operators' worldwide traffic and subscription revenues by up to Rs 720 bn annually by 2003. By 2004, there will be more than 700 m users of m-commerce worldwide.

    It is probably statistics such as this, which have created the hype around WAP and also, set competitor groups looking to corner this chunk of the market. Hence, we are hearing loud resonance of criticism.

    On the domestic front, mobile phones are being sold more than PCs. The numbers of subscribers is expected to be 3 m by 2003. All these statistics sound very interesting but let us look at a few hard facts.

    Most of the customers are very sensitive to the bill they pay for their cell phones and a huge chunk consists of prepaid users. 70% of the subscribers do not generate revenues more than Rs 1,200 per month. Consider other issues like content and handsets. There is not enough local content available and the handsets are pretty expensive. It looks like the usage of the service and revenue generation will start only in 2002.

    We have Wipro, Digital, eCapital, Planetasia.com, iFlex, and Netxcell, Tata Infotech and a lot of other companies that are offering WAP solutions. These companies need to look very seriously before making revenue projections. If the WAP initiative does not go the way it is projected to then their topline will take a hit. More so with companies that are not large and do not have a well-diversified portfolio. WAP needs to prove itself as a strong technology that is capable of delivering. Not only that, m-commerce has to be adapted by the masses, which are slowly coming to terms with e-commerce.



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