DIFFUSION OF THE MOBILE COMMERCE: ANALYSIS OF THE ITALIAN SITUATION
A study submitted in partial fulfilment of the requirements for the degree of Master of Arts in Multilingual Information Management
THE UNIVERSITY OF SHEFFIELD
This study aims at analysing the general status of the Mobile Commerce evolution in Italy and provides a background for further studies on this topic.
TLC companies have been almost ‘obliged’ to direct their attention towards Mobile Commerce services, because in many social contexts they have already exploited effectively the voice telephony market. This shift has encountered both extreme and rapid appreciation in some Asian markets, Japan and South Korea above all. Their successful experience has therefore represented a peculiar driving force to all the other mobile telephony companies, pushed by the need to generate new sources of competitive advantage. Nevertheless, so far this effort has not produced the same positive outcomes achieved within the major Asian contexts. Italy surely represents an ideal setting for the implementation of m-Commerce policies, mostly due to the very high level of penetration of mobile telephones and the attitude of its population towards innovations. However, although being introduced by one of the most important ICT firms a couple of years ago, m-Commerce has not breached into the Italian society yet.
In order to obtain relevant results and significant answers to these issues, this study has been developed following both qualitative and quantitative patterns. A case study covering the best example of Mobile Commerce success was selected and examined in deep. Additionally, an online survey was formulated and sent out. Finally, reviewing part of the literature available has constituted a fundamental step to form a solid background to put this analysis through.
Overall, the research project has tried to cover the most influent aspects regarding the development of the Mobile Commerce and contributed to explore such a phenomenon
from a critical point of view, trying to provide significant recommendations for further investigation.
First of all, special thanks to my supervisor Dr. Angela Lin, for her patience and guidance throughout the whole dissertation preparation period.
Secondly, thanks to all the people who contributed to the research project, particularly those ones who spent part of their time completing the online survey, which has been fundamental in order to reach the goals established. Among these people, I would also like to thank Mr. Bryce Winkelman of Qualtrics for his scrupulous aid and understanding.
Last but not least, a very special thanks goes to my family, which gave me the possibility to do a master course and supported me in all possible ways during this fantastic experience.
Table of Contents
1. INTRODUCTION ...............................................................................................................................4 1.1. 1.2. 2. RESEARCH AIMS AND OBJECTIVES ................................................................................................6 ORGANISATION OF THE DISSERTATION..........................................................................................8
LITERATURE REVIEW .................................................................................................................10 2.1. 2.2. LITERATURE OVERVIEW ..............................................................................................................10 LITERATURE REVIEW: THEORETICAL BACKGROUND ...................................................................12
THE MOBILE PHONE IN THE MODERN SOCIETY................................................................15 3.1. THE EVOLUTION OF THE MOBILE PHONE AND ITS IMPACT ON THE SOCIETY .................................16 3.1.1. The mobile phone as a tool that enhances security and safety ..............................................17 3.1.2. Unadvised use of the mobile phone and reduction of safety..................................................19 3.1.3. The connection between mobile phone and public place utilisation .....................................19 3.1.4. The mobile phone and the maintenance of relationships ......................................................20 3.1.5. The role of the mobile phone within non-verbal communication ..........................................21 3.2. THE DIFFUSION OF SMS..............................................................................................................22 3.3. THE MOBILE PHONE DOMESTICATION WITHIN THE ITALIAN YOUTH SOCIETY ..............................24 3.4. THE ‘BEEPING’ PHENOMENON: NOT ONLY AN ITALIAN PRACTICE ...............................................27
THE MOBILE COMMERCE..........................................................................................................29 4.1. THE CONCEPT OF MOBILE COMMERCE........................................................................................30 4.1.1. Differences and analogies between e-Commerce and m-Commerce ....................................32 4.2. OVERVIEW OF THE M-COMMERCE BUSINESS MODELS .................................................................33 4.2.1. User fee business models.......................................................................................................34 4.2.2. Shopping business models .....................................................................................................34 4.2.3. Marketing business models ...................................................................................................34 4.2.4. Improved efficiency business models.....................................................................................35 4.2.5. Advertising business models..................................................................................................35 4.2.6. Revenue-sharing business models .........................................................................................36 4.3. CASE STUDY: NTT DOCOMO’S I-MODE SUCCESS ......................................................................36 4.3.1. The Japanese background at the end of the millennium and the contextual factors that enabled NTT DoCoMo’s i-Mode service to stand out on the market...................................................37 4.3.2. The launch of NTT DoCoMo’s i-Mode: analysis of an innovative business model...............40 4.3.3. Conclusions ...........................................................................................................................45 4.4. OTHER SUCCESSFUL EXAMPLES OF M-COMMERCE IMPLEMENTATION AND THE SITUATION IN THE MOST IMPORTANT AREAS OF THE WORLD .......................................................................................46 4.4.1. Mobile providers offering m-Commerce services in Italy .....................................................49 4.4.2. Mobile Commerce and the issues concerning security and privacy......................................52 4.5. OVERVIEW OF THE ITALIAN SITUATION.......................................................................................53
METHODOLOGY ............................................................................................................................57 5.1. OVERVIEW ..................................................................................................................................57 5.1.1. Rationale behind the choice of the research method.............................................................57 5.2. OVERVIEW OF THE CASE STUDY ..................................................................................................59 5.2.1. Resources employed for the case study .................................................................................59 5.3. OVERVIEW OF THE ONLINE SURVEY ............................................................................................60 5.3.1. Survey tool employed.............................................................................................................60 5.3.2. Ethical issues.........................................................................................................................60 5.3.3. Sample ...................................................................................................................................60
5.3.4. 5.3.5. 6.
Composition of the survey .....................................................................................................61 Delivery of the survey............................................................................................................62
SURVEY OUTCOME: EVALUATION OF THE RESULTS.......................................................63 6.1. SURVEY STATISTICS ....................................................................................................................63 6.2. DISCUSSION OF THE RESULTS ......................................................................................................63 6.2.1. Demographics .......................................................................................................................63 6.2.2. First part: broadband and e-Commerce ...............................................................................65 6.2.3. Second part: the role of the mobile phone.............................................................................67 6.2.4. Third part: the diffusion of the m-Commerce ........................................................................73
BIBLIOGRAPHY .......................................................................................................................................92 APPENDIX A: ORIGINAL VERSION OF THE SURVEY .................................................................101 APPENDIX B: TRANSLATED VERSION OF THE SURVEY...........................................................113 APPENDIX C: INTRODUCTION TO THE SURVEY.........................................................................119
List of Tables
TABLE 1 DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS (N=125).........................................64 TABLE 2 SQ22: IF YOU HAVE NEVER PURCHASED ANY GOODS OR SERVICES VIA YOUR MOBILE PHONE,
WHICH OF THE FOLLOWING SERVICES WOULD YOU INTEND USING?.............................................80
TABLE 3 SQ23: PLEASE STATE, IN ORDER OF PREFERENCE, THE MEDIUM BY WHICH YOU WOULD PREFER TO RECEIVE INFORMATION ABOUT MOBILE COMMERCE AND MOBILE SERVICES .............81 TABLE 4 SQ24: PLEASE INDICATE THE IMPORTANCE OF THE FOLLOWING FACTORS IN USING A PARTICULAR M-COMMERCE SERVICE ..........................................................................................81
We may say that mobile phones have by now conquered almost any society in the whole world, particularly those contexts that belong to the most developed countries. However, also thanks to the poor level of fixed infrastructure in their territories, many of the so called ‘underdeveloped’ countries are already playing a surprising role in the evolutionary process of such a phenomenon, concerning the exploitation of both B2B and B2C mobile services (Muthigani, 2007; Rice, 2007; Vodafone, 2005; Wangui, 2005). One of the foremost conditions for the establishment of the m-Commerce has been, especially in the Western countries, the deep penetration of wireless devices. Among that type of devices, the principal role is surely played by the mobile phone. In the EU-25, two countries have reached unexpected results, going beyond the 100% for what regards mobile phone penetration: in 2003, the best outcome belonged to Luxembourg, which registered nearly 110% of mobile phone subscriptions. Italy placed second with around 101.8%, and a constant pace of growth that will possibly lead to the first position in the forthcoming future (Bueti and Obiso, 2005). Outside the EU, the trends for 2006 foresaw a penetration ratio of 74% for the USA, while Japan (95%), South Korea (94%) and China (93%) symbolised the huge potential of the Asian market (Ipsos Insight, 2006). Finally, Africa constitutes a context where mobile phone users are growing rapidly: in 2004 it accounted for 50 million mobile subscribers (7% of the population), while it is expected to reach over 160 million users by the end of 2009, with a pace of 35% per year (Batchelor et al., 2004). Therefore, it can be argued that the mobile phone has literally conquered its relevance in the new millennium society, constituting an essential tool that has
been by now incorporated in our everyday life so to affect our personal dimension. Mobile phones’ extreme spreading has evidently generated a huge business, mainly based on voice and SMS traffic. Nevertheless, the partial saturation of the market in relation to those two particular features of mobile telephony has pushed TLC companies to look for further areas of exploitation, creating new products and services that would meet the needs of their costumers. Japan can be considered the pacemaker in this field: in 1999 NTT DoCoMo, the most important mobile provider launched i-Mode service, reaching in a short time an impressive number of subscriptions and in fact projecting the Japanese society towards the new mobile era. In 2007, it still represents the most successful model of m-Commerce service. Moreover, i-Mode introduction has given boost to the other telephony enterprises, whose aim has been to emulate the Japanese performance in the most profitable markets of the world.
Going back to the data that have been discussed at the beginning, many represent examples of countries in which the Mobile Commerce would find an ideal ground for its growth, thanks to the massive presence of mobile phones and the high standards of innovation. Among them, Italy is certainly one of the most profitable socio-economic contexts in terms of new mobile services exploitation. However, although being introduced with great expectations in 2003 by the provider H3G 1 , the popularity of m-Commerce in Italy can be still considered at an embryonic stage. In fact, the mobile phone still appears far from being deemed as a tool that goes beyond the communicative scope, remaining still anchored to its original conception.
H3G was later followed by the other 3 major mobile providers, Vodafone, TIM and Wind. However, H3G has been the only one to provide m-Commerce services based exclusively on UMTS technology.
Research aims and objectives
Following the conceptual background highlighted before, the main aim of this research has been to understand the reasons why the mobile commerce is struggling to make an opening in the Italian society. But that is not all. In fact, it would be relevant to know how the use of the mobile phone is conceived among the Italian youth population. The reasons behind the selection of such a peculiar target will be explained later on. Also, determining at what extent Mobile Commerce awareness is present within that share of the Italian population will be interesting, together with its possible relationship with the diffusion of the broadband and the internet, and the presence of any electronic commerce (e-Commerce) culture. This study would help to draw a scenario useful for the future development of this kind of technology.
More precisely, for what regards the spreading of the mobile phone within the Italian territory and its usage among the Italian youth generation, this study aims at finding an answer to the following questions: i. How is the mobile phone conceived within the Italian youth society?
ii. What are the most popular features connected to the usage of mobile phones within the Italian youth society?
iii. What is the mobile phone potential in the Italian market?
Concerning the popularity of the Internet and the well known practice of making transactions online (e-Commerce), these are the interrogatives that this investigation will try to answer to:
iv. To what extent the Internet can be associated to the use of mobile phones?
v. How deep is the utilization of the internet among the Italian society?
vi. How frequently do they use the Internet to make purchases (Electronic Commerce)? The last part of the research project will focus on Italian mobile phone users’ current knowledge regarding the Mobile Commerce potential, together with the most outstanding factors that drive (or would drive) their choice towards the embracement of such a new frontier of mobile telephony:
vii. Is there a Mobile Commerce awareness/culture in Italy?
viii. Do youth Italians perceive any benefits/improvements in their life from the exploitation of Mobile Commerce?
ix. What are the major factors taken into account by Italian users in relation to the m-Commerce utilization?
x. What are their needs and potential interests in terms of exploitable services through the use of mobile phone?
This final set of questions (and especially the last two ones) is particularly interesting from a marketing point of view. In fact, the answers to those queries would be very useful to understand how mobile commerce appeals the Italian mobile phone users, highlighting both those elements that still constraint its evolution and the major elements that they take into consideration for its acceptance.
Organisation of the dissertation
The organisation of this report reflects the conceptual framework underlined in the initial part of this chapter, with a descriptive process that moves from a more general point of view, studying the role of the mobile phone within the modern society, to the m-Commerce as a phenomenon, which is expected to contribute to the announced shift towards a ‘ubiquitous society’ based on the concept of convergence of mobile and fixed telecommunication services (Alleman and Rappoport, 2007; Bueti and Obiso, 2005; EC, 2006; Feldmann, 2003). After a chapter dedicated to a brief literature review of the most relevant sources, the analysis focuses on how the mobile phone has penetrated the modern society and which part of the population represents its heavy users. As expressed before, a special emphasis will be given to the Italian social context.
The fourth section goes straight to the foremost issue of this topic: the Mobile Commerce. After giving a definition of such a particular innovation, the report will discuss the relationship lying between m-Commerce and e-Commerce. Subsequently, after a review of the most common business models, the discussion will shift to the close examination of the most successful case of mCommerce service implementation: NTT DoCoMo’s i-Mode. The analysis will explore how that change has been domesticated by the Japanese society, how it shaped it, how it fitted into the technological pattern featuring the country and enabling it to become the most advanced nation in the TLC circle with many years of anticipation in comparison to the many other advanced countries. In relation to this, further cases of m-Commerce model implementation will be presented. The chapter ends with an overview of the Italian situation, trying to understand what elements define the Italian TLC market and why it can be still considered at an embryonic stage. Valid examples concerning this issue will be provided.
The fifth part is entirely dedicated to the presentation of the research methodology. The choices regarding the various methods selected to carry out the research project will be reviewed. Within this section, the survey definitely occupies a core position because it reflects the direct opinion of the Italian mobile phone users. However, as it will be underlined many times during the discussion, the sample chosen does not represent the whole segment of the Italian users; therefore its outcome must be retained cautiously, as it does not have any statistical value. A brief note regarding the choice of the online survey tool chosen for this task will be included. Consequently, the sixth section of the dissertation centres on the interpretation of the results obtained through the online survey, which will be graphically displayed.
The seventh chapter, instead, embodies a discussion concerning the data analysis, which will be compared to the findings and considerations made in the previous parts of the dissertation pattern.
Ultimately, the last chapter concentrates on a quick review of the core features and findings obtained by the research procedure. It will also involve suggestions for further research, along with final recommendations useful for the further expansion of the Italian TLC context.
2. Literature review
As it has been observed in the previous chapter, the literature available has resulted necessary in order to build up a well-grounded background concerning the many issues dealt with during the research task. Considering the high level of complexity of the topic chosen, many types of sources have been taken into account.
Books have been the principal source of information. Beyond a doubt, they represent the most appropriate channel from where to get the necessary knowledge to manage sufficiently the topic in question. Unfortunately, due to the short evolutionary path of the mobile commerce, it has not been simple to retrieve a large number of books dealing with such a technological phenomenon. Nevertheless, a few sources that deal in a very comprehensive way with the core topics of the research are: • • • • •
R. Ling’s Mobile Connection – The Cell Phone’s Impact on Society N. Sadeh’s M-Commerce – Technologies, Services and Business Models M. Ito, D. Okabe and M. Matsuda’s Personal, Portable, Pedestrian – Mobile Phones in Japanese Life G. Elliott and N. Phillips’ Mobile Commerce and Wireless Computing Systems E. Rogers’ Diffusion of Innovations
Apart from books then, a concrete contribution has been given by: •
Official reports from world and national telecommunication/IT organisations (e.g. ITU, AITech-Assinform, WapForum, DVB, PCIC), world economic/financial committees (e.g. CPSS), political and economic institutions (e.g. EU and EU Commission, OECD), national statistics committees and marketing consultancies (e.g. Abacus, Censis, Ipsos Insight), political organisms (e.g. Japanese Ministry of Internal Affairs and Communications (MIC) and finally important magazines (e.g. The Economist). Such reports have provided updated statistical data and information with respect to both general and specific trends affecting different types of technological innovation. The details extracted from those documents have been also efficacious in order to draw a comparison between the situations of the most developed countries in the world scene.
Previous research papers published by various reviews, in particular by the journal New Media and Society. This review, signalled by Dr. Angela Lin during the first phase of the dissertation preparation, resulted prominently rich of research content focusing on mobile phones, mostly considering the sociological implications of its adoption. Also, relevant documents have been retrieved from The Journal of the Communications Network, The Journal of the Electronic Commerce Research, Computing and Electronic Markets.
Articles extracted both from paper-written and online magazines (e.g. The Economist), online newspapers (e.g. Financial Times, Il Corriere della Sera, USA Today, The Guardian) and a large number of online websites. This last set of resources has been fundamental in order to obtain updated and global information about the mobile phenomenon.
Literature review: theoretical background
The diffusion of mobile phone has had unpredicted implications since the early stages of its evolution (Feldmann, 2003; Wei and Lo, 2006). However, in the first years of its introduction, it faced a very slow diffusion rate, mostly due to its high costs (Campbell, 2007). Therefore, it was strongly considered a technology tool directed to the business area usage; on the top of that, usage of mobile phones by businessmen had initially a vulgar acceptation (Feldmann, 2003; Fortunati, 2005a; Ling, 2003, cited in Fortunati, 2005a; Rogers, 1995). Subsequently, from the early 1990s, contemporaneously with the decrease of handset prices and general service cost, mobile phones selling registered a sudden increment. The advent of the GSM technology also accelerated the process, with features that included the support for roaming and SMS texting (Ling, 2004; Sadeh, 2002). The worldwide youngest population has proved to constitute a base of mobile phone heavy users (Businessonline.it, 2006; Entrepreneur.com, 2006(?); Ito et al., 2005). Ling (2004) studied the diffusion of mobile phones in Norway, and found out that “by 2001… approximately 90% of the teens interviewed in a representative national sample owned a mobile telephone” (p.84). Interestingly, Ling (2004) noticed the popularity of text messages within the sample analysed, fact that was accompanied by the adoption of a peculiar but (in the majority of the occasions) simple written language. This aspect is also strictly connected to the concepts of “personalisation”, “individualisation” and “construction of identity” discussed by Fortunati (2005a) and by Katz and Sugiyama (2006). To reinforce this last concept, Fortunati (2002 and 2005a and 2005b) highlights the mobile phone as a symbol of fashion, especially among the Italian users, a powerful feature for communicating one’s personal identity. Fashion is also identified by Leung and Wei (2000, cited in Wei and Lo, 2006). In their study regarding students from the US and Japan, Katz and Sugiyama (2006) found out a directly proportional relationship between attention to fashion and mobile phone usage. Those findings confirm
the conclusions obtained from the studies concerning students from Korea, Norway and Namibia (Katz and Sugiyama, 2006). When in Europe the 2G telephony standard was still in its process of expansion, in Japan the major telephony provider launched the service that would revolutionise the TLC sector: it was 1999, and NTT DoCoMo challenged the mobile telephony market with the i-Mode service (Elliott and Phillips, 2004; Ito et al., 2005; Ling, 2004; Sadeh, 2002). This new model aimed at satisfying Japanese mobile phone users’ needs, shaped by the raising ‘mobility’. Contemporaneously, with i-Mode NTT DoCoMo conceived a new service with whom they intended to gain competitive advantage from a sphere other than voice telephony market, now almost completely saturated. Therefore, Japan opened the way to the Mobile Commerce, yet standing as the best example within this telecommunications area (Sadeh, 2002). Nowadays, although the situation in the rest of the world appears still pretty far from the results gained in Asia and mobile commerce’s adoption pace is still slow, the current premises adumbrate an effective spread of 3G services and mobile commerce in the forthcoming years (Bradbury, 2006; OECD, 2007; PassioneMobile, 2006). The level of mobile phones penetration in many countries (both developed and least-developed ones), the level of mobile infrastructure and the policies adopted by national governments and continental institutions that point to ‘convergence’, ‘ubiquity’ and the reduction of the so called ‘digital divide’ portend the intention to follow the footsteps traced by the Japanese culture. However, the evolution of m-Commerce is still at its first stage, due to various reasons (Feldmann, 2003; i-dome.com, 2001; OECD, 2007). Although being the second nation in EU for mobile phones penetration with one of the highest indexes in the world and being one of the leaders in 3G network coverage, Italy is one of those many countries that still struggle in terms of 3G telephony adoption, mostly because of the services’ high costs (OECD, 2007). Nonetheless, cost is not the only factor that thwarts the proliferation of the new
mobile standardisation within the Italian society: further limiting causes will be analysed and spotted later on throughout this report.
3. The mobile phone in the modern society
Among all the mobile devices available today in the global TLC market, the mobile phone surely plays the role of the main character, having conquered a great number of countries regardless of the age of the users. Ling (2004) defines it as “a taken-for-granted part of the social landscape in many countries” (p.21). Its success is due to many factors, depending on the situation of every single socio-economic context in which it has been adopted (Feldmann, 2003). But, as a general consideration, we might say that one of the major reasons for its enormous popularity is its striking ease of use. This characteristic enables anyone to employ it, regardless of any particular knowledge (Ling, 2004).
According to the report “Mobile overtakes fixed: implications for policy and regulation” published by the International Telecommunication Union (ITU), in 2002 the world assisted to the phase of a process that represented an authentic milestone in the sphere of telecommunications: the number of mobile subscribers outpaced the number of fixed lines, reaching a quantity of subscriptions that went beyond 1200 million units (Feldmann, 2003). Surprisingly, this phenomenon comprised both ‘developed’ and the so called ‘least developed countries’, but was evidently forced by diverse drivers. However, this upshot demonstrates how developing countries constitute markets with great potential and thus ideal scenarios for future investments in TLC technology and services. In Africa, for example, mobile companies registered a strong demand for mobile voice services mostly due to the growing need of the populations living in the rural areas of the continent to keep in touch more comfortably with the respective families. Moreover, this was also a direct effect of the improving general economic condition within many African societies and the widespread aim of reducing personal risks. Such an increasing demand brought unexpectedly the percentage of subscribers from 3% in 2001 up to 7% in 2004, reaching a number of 50 million users (Batchelor et al., 2004; Feldmann, 2003). As shown
in the right part of figure 1, the African continent is going at an impressive and constant pace of growth in terms of mobile phone subscribers. That datum is even more astonishing if compared to the world growth average, sign of the great rapidity with which Africa is coping with the technological (and economical) ‘divide’ in comparison with the most advanced areas of the world. Particularly interesting is the percentage relative to Asia, another geographical context that has exploited only a small part of its immense potential so far. Its high number of inhabitants makes Asia one of the most appealing catchment areas of the world. This view is supported by an NTT DoCoMo’s recent declaration, in which they announce their intention of investing part of the company’s resources in that market (Turner, 2006).
Figure 1 Mobile phones outpacing fixed lines and annual growth rate
Source: ITU World Telecommunication Development Report, 2003.
3.1. The evolution of the mobile phone and its impact on the society
According to the figure 1, then, the mobile phone is quickly pushing off the fixed line connection; this trend leads to the conclusion that, in the next future, mobile phones will probably replace completely the fixed line as the principal
communications medium (Feldmann, 2003). As it has been mentioned before, that is what is already happening in the African continent at the moment. Before its spread among the majority of the world populations, the mobile phone connoted a tool ‘designed’ just for very few ones. In fact, due to its huge cost and the high prices of the services provided, the ones who could employ such an expensive innovation were almost only wealthy people (Feldmann, 2003; Ling, 2004; Rogers, 1995; Srivastava, 2004). As already stated in the paragraph 2.2, Fortunati (2005a) talks about this aspect and reports the common reputation regarding the “higher classes” as “bearers of vulgarity” (p.41). Later, with the prompt decrease of handset prices, services cost and the introduction of prepaid services (Feldmann, 2003, Ling, 2004), the mobile phone has become a technology tool popular within the masses, with the consequent shift regarding its consideration. It passed from being reckoned as an object symbolising “status”, to the idea of a “trendy and fashionable object” (Fortunati, 2005a:41; Katz and Sugiyama, 2006). Ito et al. (2005) identify the very same pattern in the penetration of the mobile phone within the Japanese society.
3.1.1. The mobile phone as a tool that enhances security
Its common reputation is not the only one generated by the astounding popularity of the mobile phone. As yet, a sufficient number of research studies have been carried out with the aim of understanding better the role of the mobile phone within the sphere of modern communication. And in that direction, the results obtained by Ling appear extremely valuable. Talking about the mobile phone, he asserts that “…one of the most common popular images is that it provides us with a form of security…and safety” (Ling, 2004:35). Following this statement and focusing on the results obtained from investigations conducted in Norway, Ling underlines how the mobile phone is seen as the most efficacious device for
maintaining a high degree of security and safety. However, he points out that granting a complete level of security and safety seems a pure utopia, since the mobile phone is prone to technical limitations (such as battery power and network coverage). Therefore, as those boundaries restrain from the total attainment of such a goal, the mobile phone “[it] is not something on which we can rely absolutely” (Ling, 2004:46). Enhancing security is also the most important adoption factor within the young people. In fact, parents are said to have found in the mobile phone a very effective tool in order to increase their control over their children. Ito et al. (2005), referring about Japanese young students’ use of keitai 2 , highlights their parents’ common relief when their children carry a mobile phone with them, as it enables contact at any time of the day. However, as Humphreys (2005) remarks, children put in practice downright strategies to get around their parent’s ‘intrusion’: screening the incoming calls or switching the device off are just two of the most popular tricks to avoid bothers. The introduction of the caller-ID function has definitely enabled the process of screening, giving more power to the recipient (Humphreys, 2005). Apart from the matters concerning security, parents see the owning of a mobile phone also as an efficient method with whom their children can learn how to manage money. This factor was largely favoured by the introduction of prepaid services, extremely popular among teens. Moreover, taking up their responsibilities is also a feature highly connected to the personal growth of the individual (hence of his personality) (Ling, 2004).
Keitai is the Japanese word for mobile telephone
3.1.2. Unadvised use of the mobile phone and reduction of safety
Yet, talking about mobile phones and security/safety, it is relevant to underline how its utilisation often coincides with situations of danger (hence reducing the level of security/safety). The incorrect use of the mobile phone is often identified with the causes of car accidents (Fortunati, 2002). This factor is evidently in contradiction with the awareness stressed in the findings obtained by Ling. The first example is given by a statistical datum reflecting one aspect of mobile phones use in the US: nearly 27% of mobile phone calls in the USA are made from vehicles on the move (Entrepreneur.com, 2006?). Such a percentage illustrates the costume diffused among mobile phone users that contrasts with the rules imposed by both social morality and legal environment. This proportion is dramatically confirmed in a study conducted by Redelmeier and Tibshirani (1997, cited in Ling, 2004), in which they analysed the situation preceding 742 cases of car accident. They obtained that 24% of the drivers were using a mobile phone at least ten minutes prior to the accident, testifying how a more careful utilisation of mobile communication tools might reduce the occurrence of dangerous situations. Again, that percentage of ‘careless users’ is reflected in a survey made by The University of Michigan. Such study showed that the 80% of American mobile phone users consider using a mobile phone while driving a great risk for safety (Usatoday, 2005), hence denoting awareness of the risks connected to an improper usage of mobile devices while on vehicles.
3.1.3. The connection between mobile phone and public place utilisation
Within the field of social morality, a further aspect has been at the core of many studies: the use of mobile telephones in public places. Concerning this issue, 19
Humphreys (2005) correctly states that “cellphone users tend to be less aware of their surroundings” (p.830), underlining an opinion that is highly shared nowadays. In addition to this, Ling (2004) asserts that “[The] use of the mobile phone can be seen as an affront to the decorum of a situation” (p. 128). This means that although there might be room for the utilisation of a mobile phone in a public context, such practice is always strictly subject to the rules proper to the setting in which the interaction is taking place. With relation to these conclusions, it is interesting to observe what happened in Japan, where the irregardless use of mobile phones brought the public transit facilities to ban it during the rush hours (Ito et al., 2005). The disrespectful use of keitai was associated to young people, in many cases careless of the social rules (and sometimes even of the legal regulations) proper to the Japanese community.
3.1.4. The mobile phone and the maintenance of relationships
Looking at the verbal communication from another point of view, many researchers have found confirmations regarding the mobile phone’s widespread use as a tool which increases communication with families and friends (Sofi, 2006). As stated at the beginning of this chapter, that is the case of the populations living in the rural areas of Africa. The lack of a proper fixed infrastructure enhanced the diffusion of mobile phones, with the people pushed towards such a tool by a constant and swelling need of preserving the relationship with their emotional ties. In this connection, Wei and Lo (2006) study regarding a sample of Taiwanese students confirms how frequent is for mobile phone users to make calls to their families and, in general, people they care of. Their results showed women to be much keener on such practice than men. Curiously, they also found out that lonely people normally use the mobile
phone not to improve the level of their relationships, but “for its symbolic value – fashion and status” (Wei and Lo, 2006:66).
3.1.5. The role of the mobile phone within non-verbal communication
A further aspect of verbal communication via a mobile telephone is pointed out by Ling. He states that such instrument improves the coordination of our activities and, again, women appear to be the gender that benefits more of that implication (Ling, 2004). But there is another side of communication in which the mobile phone plays a leading role. In fact, coming back again to Fortunati (2005a and 2005b) and her fascinating parallel between two key conceptions linked to the mobile phone’s idealization, individualisation and fashion, it is extremely interesting to note how such a technological instrument embraces the sphere of communication tout court: in fact, apart from conveying verbal communication (which is its main purpose), the mobile phone, as it happens with fashion, is also “a powerful vehicle in the construction of identity” (Davis, 1992, cited in Fortunati, 2005a:39), thus entering the domain of non-verbal communication. To support the concept of “construction of identity” underlined by the Italian researcher, it is sufficient to exemplify how youth people (as anticipated in the previous chapters, heavy users of mobile phones) usually personalise their own devices with featured attributes like ringtones, covers, logos, screensavers etc. As a matter of fact, that practice is nothing but a way to express one’s self identity, ‘communicating’ it to the other people through the mobile phone. This aspect, exactly like fashion, is among teens a feature that often determines the inclusion/exclusion from a particular community (Ling, 2004). These findings are also confirmed by the investigation conducted by Katz and Sugiyama (2006) on a sample of US and Japanese students. They point out that “…mobile phone [can be seen] not only as a tool to ‘talk’ but also as a means to
communicate symbolically about oneself” (p. 324). However, apart from highlighting the strict correlation between fashion attentiveness and construction of identity, they also noticed that the former one is directly proportional to mobile phone usage. This means that the more people care about fashion, the more they use their mobile phone, but also that the more people care about fashion, and the earlier they started using a mobile phone. Presentation of the self is also addressed by Ling and Yttri (2002), when explaining the “two forms of social interaction via the cell phone: instrumental… and expressive” (p. 55). Ito et al. (2005) analysed the diffusion of pagers among the Japanese youth population, and spotlighted the subsequent spread of mobile phones as the direct consequence of the previous technological phenomenon. In addition to this, they pointed out that personalisation is a common feature to the two wireless devices in question.
Going back over the mobile phone attributes listed above (ringtones etc.), it must be noticed that they are also some of the principal elements of the Mobile Commerce business conception, which is the core topic of this analysis. Thus, the idea of ‘expressing the self’ within the mobile phone usage is (again, as fashion does) also a valuable concept that can be exploited to gain competitive advantage and increase revenues.
The diffusion of SMS
As it has just been seen, mobile phones have definitely changed our lives in terms of communication, both verbal and non-verbal. Apart from the aspects linked to that issue and within the various features embedded in the mobile telephone, text messages (SMS) have surely represented a striking surprise in those last years, by many chosen as the preferred way of interacting (Wright, 2006). 22
From a study included in the guide “The mobile is open for business” published in 2005 by the company Netsize, it emerged that the number of text messages sent each month in 20 countries of the EU reaches 200 billion units (Consulteque, 2005). In another more updated investigation, Netsize affirms that “between 20 and 25% of all operator revenues are generated by data services, and 90% of all data revenues are SMS” (Netsize, 2007:17). The same company argues that SMS might be the system upon which the m-Commerce will lever in the upcoming future, although some other strategies can already be discerned in the distance.
All this statistical information demonstrate how popular and at the same time profitable is the market generated by SMS texts. Moreover, it is reasonable to think that much of the success obtained by text messages is due to the high cost of its direct successor, MMS (Consulteque, 2005; Ling, 2004). People use text messages to communicate simple ideas, most of the times without having to wait for a reply. This is surely one of the great advantages of such functionality. SMS do not require immediate replies; therefore a user can comfortably rely on a subsequent answer to his message as soon as his interlocutor notices it on his device. For this reason, Ling (2004) correctly states that SMS are not as “intrusive” as telephone calls. From a communicative point of view, it is relevant to note how SMS are clearly representative of the youth generation. We could affirm that teenagers use only text messages to interact with other people. This aspect is strictly connected with the economic factor, which has been mentioned in the paragraph 3.1.1. But this element also relates to the concept of ‘personalisation’, discussed previously; in fact, young people’s communication via SMS has proved to be totally different from any type of interaction. The language they employ is absolutely peculiar and distinguishable from the oral communication (Ling, 2004). Therefore there is much truth in the opinion that teens appear to be the real promoters of text messages. This last statement is also supported by parents’
view: a datum attributed to Cingular (now AT&T), in fact, reports that 63% of US parents who use text messaging believe that it improves their communication with their children (Entrepreneur.com, 2006?).
Figure 2. Worldwide SMS growth
Source: ITU Report Internet for a Mobile Generation, 2002; GSM Association.
3.3. The mobile phone domestication within the Italian youth society
After the considerations made above in relation to the analogies among fashion, construction of identity and mobile phone utilisation, the analysis narrows down further and focuses on the Italian society. This part of the discussion also leads us to the beginning of the research process, and more specifically, to the first of the ten research questions presented in the introductive chapter:
i. How is the mobile phone conceived within the Italian youth society? As it has been mentioned at the beginning of this report, Italy represents one of those countries where the mobile phone has reached unexpected results. With a
degree of penetration that goes beyond 110% and that is constantly increasing, it appears like an ideal market for the current and future telephony business. Most of the factors that have been highlighted previously with respect to the massive spread of the mobile telephone worldwide are applicable to the Italian scenario. Italian researcher Fortunati (2002) explains that the successful diffusion of the mobile phone within the Italian society is mostly due to cultural reasons. Fashion, for example, is a feature typical of the Italian culture, which is highly observable in the mobile phone utilisation made by teenagers as well. But that is not all. In fact, we might also include to this count the great importance given to the concept of ‘family’ and, in general, to all the friendly and emotional ties. The maintenance of the relationships (together with the improvement of coordination) is seen as one of the core factors for the owning of a mobile phone (Hooper, 2003; Sofi, 2006). Fortunati (2002) introduces another interesting theme related to the Italian culture. As a matter of fact, she asserts that what really prompted the spread of the mobile phone in Italy has been Italian’s lack of familiarity with technology. She points out that:
“Italians are among the less enthusiastic about technological progress. (Paradoxically, though, Italy is one of the European nations that have most widely adopted the mobile phone)” (Fortunati, 2002:53). And also “The mobile [phone] has been a great success in Italy because it was introduced not as a sophisticated technological instrument, but more as a friendly, easy-to use gadget, a unique totem. So the early promotion surrounding the technology showed it not as a serious communication instrument, but rather as an easy-to-use toy – as simple to use as a wired telephone.” (Fortunati, 2002:54).
In sum, Italian people conceive the mobile phone as a simple tool that enhances communication, especially towards our most significant relationships. This opinion is highly supported by another Italian researcher, Barbara Scifo, of the Universita Cattolica of Milan. She asserts that adolescents see the mobile phone as a ‘game’, while the adults consider it as a pure ‘communication instrument’ (Sofi, 2006). This aspect reminds to what has been said previously regarding teens, how they use the phone and the concept of personalisation.
Moreover, Scifo explains how the use of mobile phones by teens is extremely conditioned by the economic factor (Sofi, 2006). In fact, in Italy it is very popular the so called ‘beeping’ phenomenon, a practice with which users reduce to zero the cost of communication. Such practice consists on calling a person and make his device beep, in order to ‘inform’ him/her about, e.g. of the caller’s presence or just to remind him/her of something. This strategy is extremely popular and represents an effective way to interact without being charged. According to what has been stressed in the previous sections, beeping finds its roots in the fact that teens have a reduced economic power, which leads them to manage their credit studiousness. This aspect of the topic becomes extremely important, since it recalls the two following research questions:
ii. What are the most popular features connected to the usage of mobile phones within the Italian youth society?
iii. What is the mobile phone potential in the Italian market?
The problem connected to cost is something which is also directly reflected on the way mobile phone users choose which device features they will use. As the guide “The mobile is open for business” released by Netsize demonstrates, among the factors that encumber the diffusion of MMS is their high cost, nearly twice the cost of a text message (Consulteque, 2005). This
factor is emphasized by Scifo, which also adds how young people tend to avoid the cost of sending the files stored in their mobile phone (e.g. pictures or audio content) to their friends. Instead of using the MMS service, it is much more common to employ the Bluetooth or a personal computer (Sofi, 2006).
In summary, we might say that the mobile phone is perceived as a pure communication tool in Italy, regardless of the concepts of ‘convergence’ and ‘ubiquity’ that the EU and other important organisation are trying to promote. Considering the last two questions, instead, it is clear that there is a great difference between the utilisation of the mobile phone made by adolescents and adults. Young people, who perceive it as an instrument for socialisation, tend to exploit the ‘cheapest’ functions (e.g. SMS, music, camera etc.). On the other hand, adults, who have more economic power, consider the mobile phone more seriously, so appear to be the target to which mobile telephony firms have to focus on in the next future. In general, however, being the mobile phone seen as a communication medium, it will struggle to find another place in the Italian people conception, especially if the cost of the services will remain too high. This hypothesis is also reinforced by what Fortunati (2002) calls ‘technophobia’. Nevertheless, the research questions related to these aspects will need to find some kind of further confirmation throughout the rest of the research paradigm.
3.4. The ‘beeping’ phenomenon: not only an Italian practice
The strategy put in practice by so many Italian teens finds some common points with the ‘beeping’ praxis so popular in sub-Saharan Africa, although the two backgrounds in which they take place are substantially different.
Jonathan Donner (2005), a researcher in the Technology for Emerging Markets Group at Microsoft Research India in Bangalore 3 , has developed an interesting study related to this issue. Basically, he claims that there are three different types of beeping called ‘callback’, ‘pre-negotiated instrumental’ and ‘relational’. The meaning of the first one (callback) is easily deducible: one person beeps another one just to be called back, normally pushed by the lack of credit in his mobile phone. This practice is also adopted by clients and employees, who beep their providers/employers when they have to talk about work. The second type of beep (pre-negotiated instrumental) refers to the communication of pre-agreed messages. Donner cites the example of a taxi driver that, by ‘flashing’ his wife’s mobile phone, ‘tells’ her that he has come to pick her up in the placed they agreed to meet. The last typology of beep (relational) belongs to the emotional sphere. In fact, it is mostly used to convey messages like ‘I am thinking of you’ or ‘goodnight’, without any expectations to be called back from the recipient of the beep. In summary, these three main diversifications of the beep practice are regulated by the concept that ‘the richer guy pays’ (Donner, 2005:7), a consequence of the serious economic situation that the African continent is facing. Therefore, the common point with the ‘beeping’ phenomenon typical of the Italian teenagers is still the need to bypass the cost connected to the usual transmission of a message via a mobile phone, forced by a precarious economic condition. Mawaki (2005) also refers about the practice called ‘bip falado’ (spoken beep), extremely diffused in Mozambique. Users exploit the fact that one mobile operator in Mozambique starts charging after the third second of conversation, so they interact with short discussions of 2 seconds each in order to avoid paying for their calls.
Information retrieved from Jonathan Donner’s personal website (jonathandonner.com)
4. The Mobile Commerce
So far this analysis has focused on the instrument that has changed the way we interact, reflecting its great power in both verbal and non-verbal communication. However, that is just the impact that the mobile phone has had on the sphere that constitutes the main goal for its creation. In fact, it has also indirectly changed the way we manage our time and simplified the manner we coordinate our activities. But with the course of the time, together with its rapid growth and penetration in almost every society of the world and the constant innovation in terms of telecommunication technology, the mobile phone has evolved to a tool that means much more than simple communication. Following the concepts of ‘ubiquity’ (as the consequence of the increased amount of time spent out of home, typical of the modern individual) and technological ‘convergence’ (Alleman and Rappoport, 2007; Bueti and Obiso, 2005;; OECD, 2007; Srivastava, 2004), the mobile phone will represent soon the indispensable instrument whose functions will encompass all the possible activities of our everyday life, able to satisfy our desires at any time and at any place.
Looking at the topic from a business point of view, we might be tempted to argue that the so invoked convergence is just a direction imposed by TLC companies, which aim at exploiting new ‘prefabricated’ needs and generating new sources of revenue following the saturation of the voice market in the most advanced countries (Jeffries, 2007). Moreover, they have to regain what they have spent to obtain the so expensive 3G licenses (Sadeh, 2002). Nevertheless, the current scenario sees now the telecommunications sphere projected towards the Mobile Commerce (or m-Commerce), an abstract and confusing concept to many of us, but at the same time reality for some social
contexts. Japan is surely the example to imitate, a portrait of the future world society based on the concepts described above (Bueti and Obiso, 2005).
The concept of Mobile Commerce
Defining Mobile Commerce is not a simple task. However, many sources try to explain such a phenomenon in a very simplistic way: exploiting Electronic Commerce (e-Commerce) from a mobile device. This aspect must be surely taken into consideration when describing mCommerce, since both have many points in common. However, Mobile Commerce has a broader scope: it is much more than simply browsing the net and buying something. It is a more complete experience, able to enrich the deep change begun by the mobile phone. Here are some definitions of m-Commerce, which cover the topic differently.
According to Elliott and Phillips (2004), the Mobile Commerce is better described as “the mobile devices and wireless networking environments necessary to provide location independent connectivity” (p.3).
Sadeh (2002) instead, reports the description made by Durlacher Research which defines the Mobile Commerce as “any transaction with a monetary value that is conducted via a mobile telecommunications network” (p.5).
Schwiderski-Grosche and Knospe (undated) describe the term m-Commerce as “…using a mobile device for business transactions performed over a mobile telecommunication network, possibly involving the transfer of monetary values.” (p.2)
Another set of interesting definitions is cited in Bertrand et al. (2001), a group of students from the Kellogg University. Among the descriptions provided, two are particularly interesting. The first one comes from Forrester Research and asserts that the Mobile Commerce corresponds to “the use of mobile handheld devices to communicate, interact via an always on, high speed connection to the Internet” (Bertrand et al., 2001:4). The second one, instead, is attributed to Mobilocity, a management consultancy based in the USA. They identify m-Commerce with “the use of wireless technology to provide convenient, personalised and location-based service to your customers, employees and partners” (Bertrand et al., 2001:4).
Among all these possibilities, the most appropriate seems to be the one proposed by Mobilocity, which gives a clear and at the same time comprehensive explanation of what Mobile Commerce really represents. In particular, it correctly stresses the presence of ‘personalisation’, which features the mCommerce services. However, there are a few important elements in the expression used by Forrester Research, especially those ones referring to the type of connection. Therefore, the best way to describe mobile commerce would be a combination of both definitions, that is:
“The use of a wireless technology to provide convenient, personalised and location-based services to customers, employees and partners via an always on, high speed connection to the Internet” In this way, both the main characteristics that distinguish the m-Commerce services and the quality of the connection employed are highlighted.
4.1.1. Differences and analogies between e-Commerce and m-Commerce
It has been explained in the latest paragraph that the Mobile Commerce is by many described as the implementation of the Electronic Commerce via a mobile device. As we saw, that does not give a correct idea of what m-Commerce really stands for. In fact, although there are similarities between the two practices, the mCommerce is conceived as a totally diverse experience. It is actually ideated to be performed in a different manner (via a wireless device, normally out of home) and to satisfy different needs (buy a ticket for a show, reserve a table at the restaurant or even get traffic information). Moreover, while with the eCommerce it is the user that searches for a specific product on the Internet, the m-Commerce rests on the concepts of ‘personalisation’ and ‘mobility’. In summary, although the two technologies share the idea of buying and selling products/services over the Internet, the m-Commerce enables the user to get specific services tailored to its preferences and current position. This topic recalls one of the research questions, and more specifically:
iv. To what extent the Internet can be associated to the use of mobile phones?
As the relationship between Electronic and Mobile Commerce testifies, the Internet has an important place in the performance of both technologies. However, in the m-Commerce the Internet plays a more ‘subordinate role’ with respect to the e-Commerce, simply because the former is much more than surfing the WWW and searching for a determined product/service. It definitely goes beyond that. The confirmation of this view is given by Elliott and Phillips (2004), who observe that the “Mobile Internet is but one application amongst many others within the m-Commerce world” (p.3). 32
Further information to complete the answer to the question number ‘iv’ will be gathered in the next chapters. The study will also try to discover whether there is a direct implication between the existence of an e-Commerce culture and the potential success of m-Commerce, with a particular attention to the Italian situation (research question ‘vi’).
Overview of the m-Commerce business models
From the close examination conducted in the previous section, the Mobile Commerce emerged as a unique technology, if compared to the other ones present in the telecommunications environment. Its uniqueness, recognisable in its aims and trademarks, is also distinguishable in the new business models ideated by the TLC companies. The conception of m-Commerce has created new scenarios for the telecommunications business, reshaping its ‘usual’ value chain and also offering the chance of gaining market shares to new participants (Sadeh, 2002).
According to Sadeh (2002) “above all, m-Commerce is about content and giving users access to a myriad of mobile services” (p. 37). This statement gives prominence to what has been defined as unique with respect to Mobile Commerce: the services that users can make use of. But services are obviously made of content. Therefore, content providers are seen as one of the most crucial constituents within the m-Commerce value chain. Their utmost importance is recognisable in the great number of business models that the companies can produce in order to exploit efficaciously the market. Here are reviewed the most popular patterns within the m-Commerce universe (Sadeh, 2002).
4.2.1. User fee business models
The core ideology that constitutes this type of business model is charging users according to the amount of content they utilise. Users might be charged in two different ways: • •
Subscription fees, which prefigure the charge of a fixed cost for the utilisation of one or more services during a pre-agreed period of time. Usage fees, with which TLC enterprises assign a specific price to each product/service they offer, charging users proportionally to their actual access to the services. However, this model appears to be slightly complicated in terms of billing process.
4.2.2. Shopping business models
It is without any doubt the simplest way of conceiving business via a mobile device, in that it is pretty similar to the buying/selling experience occurring in the Electronic Commerce. It involves a mobile buyer and a mobile seller, which start and complete a transaction. Sometimes there is the participation of a third part, who usually manages the payment process.
4.2.3. Marketing business models
This particular type of business model is the one that better conveys the idea of personalisation. In fact, companies use this strategy to send marketing messages customised to the user’s profile, in order to increase the possibilities to appeal the potential consumer.
The costumer’s information is normally gathered through the wired Internet, due to the limitations of mobile devices. Being personalisation the core concept of such a business strategy, for a company knowing its customers better than its competitors will result the best method to reach its business goals.
4.2.4. Improved efficiency business models
The general aim of these business models, as the name suggests, is to reduce managing costs and contemporaneously improve costumer satisfaction. Cutting costs may be reflected in many ways: the simplest example is surely the reduction of personnel employment. Mobile banking and mobile ticketing are seen as two expanding sectors in this direction. They enable customers to avoid bothering queues in the respective offices and manage every single step of the procedure from the mobile device.
4.2.5. Advertising business models
This framework lies in a basic and simple scheme: the advertiser is charged by the content provider whenever it wants to deliver an advertisement to the potential costumer. Advertisements can be sent in two different ways to mobile phone users: • •
push mode, that is sending specific messages to the users, i.e. via SMS
pull mode, that consists in showing promotional messages (e.g. in form of banners) while the users is accessing a specific typology of content.
The promotional message is obviously chosen by the content provider according to the information retrieved by the user
Finally, content providers may charge the advertisers in different modalities, such as: • • •
flat fees, that is charging a pre-agreed fee for a specific period of time
traffic-based fees, a charging method directly proportional to the number of times that a message is shown performance-based fees, or charging the advertiser each time its promotional message is ‘hit’ by the mobile phone user
4.2.6. Revenue-sharing business models
The basic pattern that underlies those business models, in their simplest organisation, sees the content provider sharing the revenue that comes from the business operation with all those parties that cooperate in creating the product/service.
Case study: NTT DoCoMo’s i-Mode success
Following what has been anticipated in the first chapter, the best example of successful implementation of an m-Commerce business model still belongs to the major Japanese telephony provider, NTT DoCoMo, which launched the iMode system in 1999, determining an important change both in the TLC market and the habits of the Japanese society (Srivastava, 2001).
Analysing the reasons connected to its prominent results in Japan will help to obtain relevant information useful to understand better the current situation of the Italian socio-economic context, as well as draw conclusions for the future development of the m-Commerce in the Italian market.
However, before considering its successful evolution, one question must be answered: how was the Japanese telecommunications scenario when the i-Mode was implemented?
4.3.1. The Japanese background at the end of the millennium and the contextual factors that enabled NTT DoCoMo’s i-Mode service to stand out on the market
Statistical data show that the i-Mode has boosted notably the level of Internet penetration, with excellent results right after one year from its launch (fig. 3). Such a model, in fact, proposed the mobile Internet as a more than valid alternative to the wired one, which was encountering enormous problems with its diffusion. Difficulties were mainly due to low pc penetration rates and high leased line rates (Srivastava, 2001).
Data relative to market research conducted by the Japanese Ministry of Internal Affairs and Communications also confirm that trend, highlighting, on the contrary, the extraordinary popularity of the wired Internet within the large businesses in those years (fig. 4).
Figure 3. Internet penetration in Japan from 1999 to 2000 (percent)
Source: ITU 3G Mobile Policy: the Case of Japan, 2001
Figure 4. Wired Internet diffusion rate in Japan from 1999 to 2005
Source: Japanese Ministry of Internal Affairs and Communications, 2006(?)
However, the main factor behind the immediate success of the mobile Internet format has been undoubtedly the great penetration of mobile phones (keitai), which jumped from around 45% to 53% over the two year period 1999/2000. Contemporaneously, this growth had been largely pushed by the introduction of colour display devices, which granted a much better exploitation of the new mobile services (Srivastava, 2004).
In turn, the rapid diffusion of mobile phones has been favoured by a strong governmental policy (deregulation) started in the 1990s: customer ownership of the devices was introduced in 1994, and in 1996, following the Ministry of Posts and Telecommunications (MPT) modification of the mobile calls charge regulations, tariffs could be reduced, determining a sudden increment of keitai purchases (Ito et al., 2005; Srivastava, 2004).
Another fundamental element that facilitated the spreading of keitai, who subsequently enabled the mobile Internet evolution, was the great popularity achieved by the pager (in 1996, pagers subscribers accounted for over 10 million people). Extremely popular in the 1990s among Japanese students, the pager was the communicative instrument which contrasted the diffusion of the mobile phone within the wealthy class. Ito et al. (2005) refer of a well-established pager culture among the Japanese young students, which created the background for the future establishment of mobile phones. As a result of this, pager messages (popular especially among the Japanese young girls) can be considered as the precursors of the email, largely preferred to SMS in Japan.
Last but not least, a cultural element rooted in the Japanese society which must have notably bore on the evolution of such phenomena has been the great proneness towards innovation and technology. Japanese people are reported to be constantly interested in new valid technologies and, given their high
purchasing power, they configure as the best example of early adopter society (JETRO, 2006).
In summary, the mobile Internet in Japan has emerged almost at the same time as the wired Internet, as an alternative solution rather than a subsequent phenomenon, as occurred in many other countries, favoured by a strong ‘mobile communication culture’ commenced with the diffusion of pagers and continued by mobile phones. These conclusions relative to the link between the evolution of the Internet and mobile phones popularity result as an interesting contribute to formulate an answer to the research question (iv).
4.3.2. The launch of NTT DoCoMo’s i-Mode: analysis of an innovative business model
As anticipated above, NTT DoCoMo hit the Japanese market with the launch of its new mobile service, i-Mode, in February 1999, becoming one of the very few countries to obtain enormous success with the 2G mobile Internet (Srivastava, 2004).
Straight after its implementation, its rapid establishment as the most popular mobile service enabled NTT DoCoMo to obtain the leadership in the Japanese TLC sector, which also saw other two providers, KDDI and Vodafone (Ito et al., 2005; Srivastava, 2004). The big hit got by the i-Mode was due to many factors, and the majority of them have been reviewed in the last paragraph. Many of them were relative to the communications environment and its situation in those years in which the ideation of the system was still in progress.
Others concerned the physiognomy of the TLC sector and its mutations during the first period of implementation of the model, for want of the Japanese government. In fact, the launch of the i-Mode model was perfectly inserted in the governmental program called ‘e-Japan Strategy’, a large plan ideated in January 2001 with the aim of transforming Japan into the best IT country in the world. The development of the program would have taken five years and it was divided in two phases. The major aim of the government was to drive Japan straight to a ‘ubiquitous networked society’ within a very short time, based on high competitiveness and reduced costs. One of the keys for the success was the creation of an adequate infrastructure framework, a task clearly saddled to the Japanese TLC private sector (Srivastava, 2004).
But the main reason for the success of NTT DoCoMo’s model was surely due to the fact that it was (and still represents) a pure breakthrough. The system lays its foundations on a strong and innovative business model, which offers an easy-to-use service at a very cheap price to its customers. Considering that Japan offers a catchment area of about 127 million people (Srivastava, 2004), proposing a revolutionary model like i-Mode also meant the chance for huge revenues.
The greatest advantage offered by NTT DoCoMo was the possibility to exploit a packet-switched technology, which in turn granted an ‘always on’ feature (Ito et al., 2005). That meant enabling users to only pay for the actual content they access while the device is on. In a few words, a fairer way of charging the user based on the actual amount of data transferred (Sadeh, 2002). The monthly fee for the i-Mode subscription is around $3 (JPY 300 per month, plus JPY 0.3 per packet) (Srivastava, 2001). However, the packet-switched technology was extended to the voice traffic as well: every phone call was charged 10-yen per unit (Ito et al., 2005).
The transfer speed was initially of 9.6 Kbit/s, which might appear too slow at a first sight. Actually, due to the limited maximum application data size (10 kbytes) and the very small dimension of the content sent and received (e.g. emails), the apparently slow transmission speed did not affect the quality of the service (Elliott and Phillips, 2004; Srivastava, 2001).
Among its main services, which range from mobile Internet, email, mobile banking, infotainment (information services regarding traffic, weather, download of screensaver, ringtones etc.) and location-based services (information and services depending on the current location of the user 4 ), the i-Mode offers the possibility to choose from around 3000 ‘official websites’, regularly checked by NTT DoCoMo and made available from its portal. But that is not all. One of the most striking features of this new system stays in giving the chance to anyone to contribute in the enlargement of the i-Mode universe, creating and submitting his own websites (thus not a ‘walled garden’ approach). In fact, the i-Mode is based on a particular version of HTML (together with a special version of JAVA) called cHTML or compact HTML, which meant that the language used to create the website was the same as the wired Internet. That is also the main difference with the first WAP technology (based on WML language), popular in Europe and in many other areas of the world. Unofficial sites were supposed to be around 50000 in 2002 (Elliott and Phillips, 2004), and their amount kept growing, due to the great enthusiasm generated by such model. These sites (together with the official ones) are part of the ‘multiple sources of revenue’ pattern elaborated by the Nipponese TLC giant. More specifically, the mobile service provider keeps 9% of the subscription fees that it collects on behalf of the content providers, which exploit NTT DoCoMo’s wellestablished billing system to gather their revenues (Sadeh, 2002). The first positive results were not late. Elliott and Phillips (2004) assert that “81% of the world’s wireless Internet users were resident in Japan in the year
Location-based service were further subdivided into three main categories: services for the moving user, services for the moving objects and services when both the user and objects are moving (ITU, 2004)
2000, and of these over 61% accessed the mobile Internet using the i-Mode service” (p. 142). At the beginning of 2001, instead, NTT DoCoMo estimated around 20 million i-Mode subscribers (Sadeh, 2002), which became 24 million in July of the same year (Srivastava, 2001). In 2003, NTT DoCoMo calculated USD 236 as average annual revenue per i-Mode user (Srivastava, 2004). Finally, at the beginning of 2006 the NTT DoCoMo’s subscribers were over 50 millions, while data subscribers accounted for the 91% of the total subscribers (OECD, 2007).
In June 2000 NTT DoCoMo was awarded with one of the three 3G licenses available for the Japanese TLC sector. Winners were selected under those participants that comply with the minimum requirements established by the government (beauty contest) 5 . The Japanese major provider launched then its own 3G services (called FOMA) at the end of 2001. Such services were based on one of the five ITU’s IMT-2000 standards called W-CDMA, which allowed voice and data services, circuit and packet connection modes and high speed connections (from 384 kbit/s and up to 2Mbit/s) (Srivastava, 2004). At the end of January 2004, NTT DoCoMo’s 3G service subscribers went over 2 million units.
Another important step made by NTT DoCoMo still at the end of 2001, with a clear aim of getting ready for future investments abroad, has been the passage from cHTML to xHTML basic, the same language adopted by WAP Forum for its last WAP version (WAP2.0). The intent of both parts has been to cooperate to the creation of a more uniform mobile Internet environment, based on the languages used within the wired Internet (Dell’Aquila, 2003; Sadeh, 2002; WAP Forum, 2002).
As anticipated before, sending and receiving email is the most popular feature among the Japanese i-Mode users (Ito et al, 2005; Srivastava, 2004), who
Information obtained from ITU website (www.itu.int/net/home/index.aspx)
considered such practice the most important reason for the use of the mobile Internet (fig. 5).
Figure 5. Most important reasons connected to the mobile Internet use in Japan
Source: ITU Shaping the Future Mobile Information Society: The Case of Japan, 2004
According to Ito et al. (2005), the mobile Internet is particularly widespread among young people. Teens between 13-19 years register a 90% of keitai Internet usage (the heaviest users in Japan). After that age, mobile Internet usage tends to decrease gradually (to advantage the voice traffic), proportionally to age. However, mobile Internet adoption is still high among 20-29 year old mobile phone users (86.4%).
This case study has given a portrait of the i-Mode introduction in Japan and has highlighted its most important features, showing that such a success has been achieved thanks to many factors. Apart from a simple and at the same time incisive business model, the i-Mode has been successful because it has been proposed to a market that was ready to embrace it. The chances for NTT DoCoMo to hit the Japanese market were evidently increased by the presence of a strong mobile culture, constituted by both mobile phones and pagers popularity, but also by a determined governmental policy which aimed at turning Japan into the best example of IT society. With respect to that purpose, one of the most important decisions has been to create a proper infrastructure, in order to support the technological evolution. This model has also exploited cultural features typical of the Japanese society: the passion for technology and innovation (Vernon, 2006), and the high degree of mobility (time spent out of home) (Ito et al, 2005). Additionally, the great merit of NTT DoCoMo has been to keep investing in the TLC sector (while still keeping attention on its 2G subscribers, especially those ones living in the most rural areas of the country), following the evolution of the i-Mode service with continuous improvements in terms of infrastructure, quality and cost of the service. That policy has granted the Japanese major provider to maintain customer satisfaction and has made the i-Mode the best m-Commerce model ever implemented.
4.4. Other successful examples of m-Commerce implementation and the situation in the most important areas of the world
Although the model proposed by NTT DoCoMo is still seen as the most shining example of mobile commerce system, there are several other successful cases that deserve to be reviewed. Within the European scene, Northern Europe stands out for the large number of m-Commerce services launched on the market (Sadeh, 2002). The Finnish company Nordea launched its WAP Solo in October 1999, a service that mainly focuses on mobile banking, but also features a customised shopping mall called ‘Solo Market’, where users can choose a large number of sellers. The WAP Solo experience is also extended to wired Internet and via cable Internet TV, so the users are enabled to manage their own Solo accounts from any device and with the same ease. The price for such service is, like the i-Mode, extremely cheap. Nordea has more than 2 million subscribers.
Still in the Nothern Europe, Orange has developed in Denmark a mobile payment solution called ‘Orange Mobile Payment’ which works as a virtual point of sale, and is based on the WAP technology and SIM modules. Sonera has launched its ‘Sonera Mobile Pay’ in Finland and Sweden, enabling both real and virtual POS functions. The service called ‘dial a coke’, which was implemented in the Helsinki airport, obtained a very high resonance. It enabled customers to dial a special number in order to buy a drink. The cost was automatically detracted from the credit. Sonera Mobile Pay also enables its users to make reservations and book tickets, and even buy clothes from their mobile device.
In Holland, the Dutch provider KPN Mobile launched in 2002 a particular version of the i-Mode model, as part of the partnership with NTT DoCoMo. However, the implementation of the model that has had so much success in Japan has not had the same results in Holland. The same destiny happened to the 46
Italian operator Wind, who launched the Japanese model in Italy (Portel, 2003; Visionpost, 2007). Austria is also particularly active towards mobile commerce service adoption. ‘Banko.max’ from the Austrian branch of the German giant T-Mobile is another virtual POS system, which features an e-wallet that enables users to manage their credit card(s) and bank account details from the mobile device.
An interesting service called ‘Secure Mobile Commerce’ has been launched in Switzerland in 2006, thanks to the partnership among Crealogix (leader in the eCommerce field), Sunrise, Arcot, Datatrans, Visa Europe, Corner Banca and Telekurs Multipay. The solution in question enables mobile users to buy products using their Visa card from their mobile device. The payment system exploits the well-known feature ‘Verified by Visa’, extremely popular in the eCommerce area (Sunrise.ch, 2006)
In Spain, the service called ‘Mobypay’ involves both micro and macropayments, and has been produced though a cooperation between several mobile telephony providers and banks.
In the USA, the service promoted by Yahoo! called ‘Paydirect’ enables users to transfer money from their virtual accounts to their bank accounts and vice versa, similarly to Paypal (also used by mobile phone users). Still in the USA users can choose AT&T’s ‘DirectBill’, which limits the amount of micro payments to $10. However, users can request a special e-wallet feature for larger transactions. The USA is also the main country where mobile information services have got a foothold. Among the most pre-eminent providers there are CBS, Reuters and The Wall Street Journal. News and information are sent directly to the user in form of SMS messages. However, mobile commerce is struggling in the USA as well, mostly due to the low penetration of mobile phones (nearly 55% in 2005) (Consulteque, 2005).
In Africa, Kenya is one of the first adopters of mobile payment solutions (Rice, 2007). Vodafone has in fact launched a new service called ‘m-Pesa’ (translated as mobile money), with which people can transfer money to other devices. Such solution constitutes a great help for those people who want to send money to their relatives living in the rural areas. Rice underlines that in Kenya nearly 80% of the population has not actual access to the financial sector.
In Asia, Korea represents the second mobile commerce market after Japan. 3G services were launched in 2001 by both Korean and Japanese operators after the creation of a proper infrastructure (Minges, 2003; OECD, 2007). In 2002 mobile Internet subscribers were 74.9% of the total mobile subscribers (Srivastava, 2004).
In general, the most popular m-Commerce services around the world focus on mobile payment and mobile banking. Elliott and Phillips (2005) confirm this view: “In the USA and Europe emphasis is placed on business applications, such as checking banking details or stock portfolios, whereas both iMode and WAP services in Japan are market focused on games and entertainment and other social activities” (p.149)
They enable to send the so called ‘micro payments’ (Bradbury, 2006; Zandiri, 2001) via virtual POS, using the Bluetooth function, which is now available in the majority of the mobile devices. However, current m-Commerce solutions often embody further features, like e-tailing, entertainment content (games, ringtones, screensaver etc.) and various typologies of information services including location-based ones (Sonera and Orange are two of the most relevant providers offering this last type of services in Europe). The major reason for such a spread of mobile payment services is that the mobile telephony aims at
using mobile phones to replace our credit cards, as true electronic wallets (Hiscock, 2006). That is also why there is such emphasis on the Bluetooth technology, seen as the core feature for the future payment scenario (Bradbury, 2006).
However, one of the main differences between Japan and the rest of the world remains in the network infrastructure (NTT DoCoMO already counts a large number of 3G subscribers, which are constantly increasing, and is already planning to launch the Super 3G by 2010 (Nakamoto, 2007) and the quality of the devices (in Japan they have a bigger screen and longer battery life), extremely important for the optimal fruition of 3G mobile services. For what regards the difference in billing models, with its WAP 2.0 the WAP Forum has moved towards the packet-switched pattern (the one used by the iMode), a choice which will help reducing costs of the future mobile services. WAP 2.0 also aims at the complete diffusion of high speed connections in a very short time, for the exploitation of 3G services (called UMTS in Europe) in the majority of the European countries and the USA (WAP Forum, 2002). Finally, according to the European Commission (2006), in September 2005 3G service users in Europe accounted for just 15 million subscribers. Such figure confirms how 2G telephony is still the leading standard, and how far Europe is from the outcome obtained in Japan.
4.4.1. Mobile providers offering m-Commerce services in Italy
In Italy, each of the four mobile carries provides Mobile Commerce services.They are H3G, TIM, Vodafone and Wind.
The first one has been ‘3 Italia’ (of the H3G group), which in 2003 has launched a UMTS offer based on 10 hours of voice traffic, 10 hours of videocalls, 150
MMS, 100 emails, and 100 units of content per week. Prices shifted from €85 to €140 per month, with the latter price indicating the rent of the handset. The cost of the handsets, however, was very high: from €550 to €900, with the possibility to choose between a NEC and a Motorola model (Gianni, 2003). Actually, 3 Italia aimed at hitting the market with video telephony, rather than with other features. The main constraint, apart from the huge cost of its products, was the infrastructure. In fact, in 2003 only the 13% of the Italian territory was covered, following a choice made by the same provider to restrict the first stage of its implementation to the biggest cities. Things changed in 2004, with the network coverage reaching the 60% of the population (Bueti and Obiso, 2005). The last financial results say that by 21 March 2007, 3 Italia had 7.19 million customers in Italy, and by the end of 2006 the network coverage reached the 84% of the population. Current 3G services include video telephony, mobile Internet (one month of navigation currently costs €6), email, community chat, digital mobile television (via DVB-H) including six channels reserved exclusively to football. Digital television subscribers are nearly 400.000 (3 Italia, 2007). Finally, within 3 Italia’s business model, it is particularly interesting the service called ‘See Me TV’, close to the concept of YouTube, with which people upload video content and receive a small fee each time their material is watched (OECD, 2007).
TIM also offers mobile Internet (from €5 to €9 per month), but via WAP technology. The ‘Tutto Compreso’ offer, which includes mobile Internet, email, Google and YouTube navigation together with the UMTS mobile phone rental, costs €20 per month. TIM also offers mobile digital television via DVB-H, but the network coverage still appears limited. TIM is the only operator in Italy who has implemented the EDGE network, a sort of ‘bridge’ between GPRS and 3G.
Vodafone Italia has based its own WAP m-Commerce proposal on its Vodafone Live portal, which provides services focusing on communication (SMS, MMS and email), entertainment (audio and video content, screensavers, ringtones, games etc.), information (traffic information, general news, weather information
etc.) and mobility (location-based services). Interestingly, the majority of the services are sent to users in form of MMS 6 . Additionally, Vodafone offers the chance to watch mobile television too.
The last operator, Wind, has had a remarkable role in terms of m-Commerce implementation in Italy. As already noticed, Wind is the carrier that launched the i-Mode in Italy in 2003, thanks to a partnership with NTT DoCoMo (Portel, 2003). Still the most important investment made by Wind in these years, the iMode system reflects all the same characteristics of the Japanese one. In fact, users get directed to the main portal, where they can choose from a wide range of official sites, or simply type the URL of compatible websites. Just to give an example, the email service costs €3 per month, while mobile Internet and email cost €6 per month. However, the billing model follows the packet-switched pattern (cost based on Kb traffic sent and received), while the cost of the contents ranges from 0 to 5€. Wind also offers the i-Mode model via UMTS connection. By the end of 2006, Wind i-Mode subscribers were estimated to be around 680.000 7 .
Apart from the services offered by the four major telephony providers, in Italy there is a really small trace of other solutions ascribable to the category of mCommerce. One example is ‘MobilMat’, a circuit promoted by WIND and Visa which allows users to manage their own credit card or pre-paid traffic as an electronic wallet, in order to complete purchases on the Internet, in the shops belonging to the MobilMat circuit or simply to transfer money from/to other MobilMat customers. The second example is related to the project developed by the company Telepark in Turin and other 6 important cities in Italy, with which drivers can pay the
Information gathered from Vodafone Italia website (www.vodafone.it) Information gathered from Wind i-Mode website (i-mode.wind.it)
metered parking via mobile phone, just using an SMS. The charge is in fact automatically detracted from the Telepark card, previously bought by the motorist and activated with a text message, where all the detail concerning the parking must be specified (Ottolina, 2004). A similar service has been implemented by Vodafone in Brescia, Pisa and several other cities. Within mobile banking, instead, the financial institution Banca Intesa results particularly active, providing a full range of services to its customers via WAP, through SMS/MMS. Such services are completely independent: they can be managed regardless of the mobile provider chosen (Bueti and Obiso, 2005).
4.4.2. Mobile Commerce and the issues concerning security and privacy
From the analysis of 2.5G/3G telephony surely emerges an intriguing portrait of what our society will be and how our customs will be shaped. There will be (and in some places like Japan there are already) new services capable of making our everyday nature simpler, increasing our free time and comfort. However, this scenario is still open to doubt. Specifically, mobile security and privacy remain topic issues with regard to the m-Commerce diffusion. So far there has not been any notice of mobile viruses, apart from the so called ‘Cabir’ worm, which used the Bluetooth to spread and attack smartphones (Regan, 2005). Although remaining the only case of mobile device virus, it might open the door to a future problem, mining the security of mobile phones and consequently reduce the diffusion of the m-Commerce. Mobile payment involves credit card information, as well as personal data, which would certainly be under enormous risk in case of say, loss of the mobile phone, intrusion or virus attack. As James Messham (undated), technical director of Fraud Management Ltd refers when talking about m-Commerce, “experience has shown that wherever something is of value it will be targeted for attack”.
A possible solution is provided by NTT DoCoMo CEO Masao Nakamura, who explains that in the next future all the personal information regarding the user will be stored in the carrier’s server rather than in the mobile device (Hiscock, 2006). An alternative choice is relying on the SIM card module, which protects with encryption algorithms the information it stores; probably, that is the most used method all over the world. The last eventuality is represented by WAP Forum’s WIM, a module containing all the authentication keys required by the user. It can be embedded in the SIM card or just inserted in the device as a separate module (Sadeh, 2002). The only thing to do is to wait and see how these issues will be covered in the next future, knowing that they represent core aspects for the definitive take off of the Mobile Commerce.
Overview of the Italian situation
Italy reflects the general situation described so far, that is a market with a big potential yet not entirely exploited. According to Srivastava (2004), in 2002 mobile phones in Japan accounted for 63.6% (81.1 million users) of the whole Japanese population, and overtook the number of fixed line subscriptions. In 2005 instead, according to the Ministry of Internal Affairs and Communications, mobile phone subscriptions in Japan increased up to 87 million units. Out of this, 86.4% were also users of the mobile Internet. As a term of comparison, in the year 2003 Italy accounted for 52.3 million mobile phone users, with a mobile penetration percentage of 101.8% (Bueti and Obiso, 2005; OECD, 2005). This data, although not relative to the same year as Japan, confirm Italy to be a market with the same (or even proportionally better) potential as the Asian mobile leader.
However, the m-Commerce still represents a future prospect for mobile phone users, rather than a present opportunity (Bueti and Obiso, 2005).
From the analysis made in the section 4.4.1, it emerges that the m-Commerce environment in Italy is pretty variegated in terms of solutions offered by the telephony providers, and that a few services have been implemented by independent societies. In a few words, Italy does not seem, from the point of view of the mobile products available, so far from the most advanced countries. Nevertheless, the problems concerning the slow spreading of the mobile commerce are amenable to other factors, both technical (with some political implications) and cultural.
Starting from the technical side, a shared element among all the providers concerning the 3G telephony implementation is the lack of a complete network infrastructure, which in turn has been one of the priorities in Japan. In Italy, the absence of proper network coverage affects principally the south and the rural areas (Bueti and Obiso, 2005). Also the cost of 3G services appears still high, whereas the most accessible products are represented by the 2G/2.5G ones. Just until a couple of years ago, even the mobile devices had a very high cost, which was undoubtedly an insurmountable obstacle for many people.
Additionally, apart from the Wind case, all the mobile operators have chosen a ‘walled garden’ approach for their mobile Internet portals. This issue might represent another limitation to the diffusion of the m-Commerce models in Italy, since that solution has favoured the establishment of i-Mode in Japan. According to that, it might be wiser to introduce such pattern in the Italian paradigm too, especially now that the most used system regarding mobile Internet (WAP) has moved towards the most popular programming language (xHTML).
Within the technological sphere, the evolution of the Mobile Commerce in Italy might have a relationship with the slow diffusion of the e-Commerce and, in turn, of broadband and the Internet (reference to the research questions iv, v and vi). According to Bueti and Obiso (2005), by July 2004 there were just 3.500.000 broadband connections in Italy.
This aspect seems also to be connected to cultural characteristics. Specifically, a relevant factor might be what Fortunati (2002) has remarked as ‘technophobia’, discussed in the section 3.3. This view is supported by a study conducted by The Economist (2007) and called ‘The 2007 e-Readiness Rankings’, where e-readiness is defined as “the ‘state of play’ of a country’s information and communication (ICT) infrastructure and the ability of its consumers, businesses and governments to use ICT to their benefit” (p. 1). The ranking, which counts in 69 countries, sees Italy just in 25th position with a score of 7.45 (out of 10), while in the first three places there are Denmark (8.88), US and Sweden (both 8.85). Italy is surprisingly behind countries like Singapore, Bermuda, Israel and Malta. Moreover, the absence in Italy of what as been defined as ‘strong mobile culture’ in the section 4.3.3, referring to the previous pager and mobile phone popularity within the Japanese society, seems to be a valid element in relation to this issue.
As already noticed throughout this report, further limitations come from the devices employed for the 3G telephony exploitation and, also, by the often unclear range of offers available, which tend to confuse users.
Going back to the costs connected to m-Commerce services and to 3G telephony, it is impossible not to take into account the economic crisis into which Italy has fallen for many years now, and which is directly reflected in Italians’ purchasing power. A study from ISAE has found out that the 74% of the population in Italy affirms to be poorer than a couple of years ago, with a constant growth since 2003 (Corriere della sera.it, 2007). Such share also
remarks that the income available is normally sufficient for general and necessary family expenditure, without any ‘superfluous’ purchases. Considering such frame, it appears really hard to imagine how a society can have money available for a technology which has been so far too expensive and by many recognised as ‘unnecessary’ (Sofi, 2006).
Further verification of all these issues will come from the survey, the last part of this research project, which will be discussed in the sixth chapter.
The methodology adopted to carry out the research project has partially followed the framework outlined in the Dissertation Proposal. However, the two interviews previously planned were not executed. Also the number of online surveys has been reduced (from the initial two to one), giving entire space only to the Italian mobile phone users.
The research framework consisted then in the examination of a case study and the analysis of the results obtained throughout an online survey, thus following a both qualitative and quantitative pattern, and a deductive method of investigation.
5.1.1. Rationale behind the choice of the research method
The restrictions applied to the original methodology framework presented in the Dissertation Proposal have not been casual. Such choice has been made in order to concentrate the research on the core aspects of the subject. Conducting another survey on a Japanese sample would not have had fundamental implications with the research questions established prior to the research.
The research has consisted, as stated above, in one case study and one online survey, but has first formed its basis on literature. Literature review has helped to create a solid background necessary for the full understanding of the topic, gathering information from previous research, theoretical insights and updated content. In addition to this, literature has been
fundamental for the specific solutions adopted within the research process (e.g. choosing the sample and the object of the case study). The utilisation of both qualitative and quantitative methods has been preferred to choosing just one of the two patterns. Choosing both methods has increased the accuracy of the final results, enhancing the value of the research itself. Considering the nature of the subject in question, using a deductive pattern has been almost obligatory. That is, the research needed to start from the creation of a knowledge background (because of the complexity of the topic). Then, the case study was seen as a supportive way to literature in order to obtain more qualitative information. Examining the best example of m-Commerce implementation has enabled the extraction of the key aspects that drove to the success in Japan. In turn, such elements have constituted a logical framework that was successively compared to the Italian socio-economic context. The conclusions arisen from that stage of the research were than tested with the online survey. Variations in the methodology have been taken into account. For example, a comparative case study might have been another option. However, the choice has fallen only on the analysis of the most successful example of m-Commerce service because, so far, no one else has obtained the same outcome. In a few words, there would not have been a real term of comparison. The online survey has been preferred to the interview, as it was planned originally, because of two basic reasons. First of all, directing an interview to a TLC professional would have given an attestation coming from a specific point of view, different from the one which actually refers to the potential users of Mobile Commerce services. From the examination of the literature, the youth generation emerged as those who determined the spread of mobile phones and might do the same for the mCommerce. Lastly, the survey as a mere quantitative research tool has been, if compared to the interview, more effective because it has enabled to reach a larger sample
more rapidly. In fact, the objective was to gather as many answers as possible, in order to increase the value of the survey itself.
Overview of the case study
For the case study, as explicated in the section 1.2 ‘Organisation of the Dissertation’, the choice has fallen on the Japanese major telephony provider NTT DoCoMo and its system called i-Mode. The launch of such model has definitely had a surprising and sensational impact on the Japanese society, and the positive results obtained by NTT DoCoMo in such market still indicate i-Mode as the best example of m-Commerce solution ever implemented.
The analysis relative to NTT DoCoMo focuses on a full examination of the core aspects of i-Mode’s business model, together with a comprehensive report concerning the Japanese background pre/post i-Mode and a coherent review of statistical data. The last part of the case study ranks the most relevant reasons relative to the iMode usage in Japan.
5.2.1. Resources employed for the case study
The information used to carry out the case study has been retrieved mainly from books, but also from both online and offline articles. Statistical data were extracted from books and official reports.
Overview of the online survey
5.3.1. Survey tool employed
For the deployment of the survey an online survey tool has been chosen. Among all the possibilities available on the Internet, the best solution was represented by the Qualtrics’ ‘Surveyz!’, a tool which enables the creation, launch and management of the results directly from the web, without installing any software. The tool is available on the website:
Subsequently and thanks to Qualtrics’ staff, the survey has been transferred over the Qualtrics system, which offers a better interface for the management and analysis of the results obtained.
5.3.2. Ethical issues
The anonymity of the participants has been granted, with the total respect of the Data Protection Act of 1998 issued by the University of Sheffield and concerning research regulation.
The choice of the sample has been made according to the analysis of the literature relative to the development of mobile phones and Mobile Commerce.
As already underlined in this study, the heavy users of mobile phones (both in Italy and Japan) and of Mobile Commerce (in Japan) are young people. As a result of this, the youth share of the Italian population has been selected as the most interesting source of information with regards to the research aims and issues. The age of the participants ranges from 10 to 30 years. However, due to the small size of the sample, the results obtained from such analysis must be considered only as a purely indicative source of information. Therefore all the conclusions that will be expressed concerning the survey will need to be investigated more deeply.
5.3.4. Composition of the survey
The creation of the survey has followed the research aims and objectives presented at the beginning of the report. In general, then, the survey has been built in order to answer the research questions presented in the introductive chapter (see section 1.1 Research Aims and Objectives). However, the selection of every single survey question has been undertaken exclusively according to the elements derived from the literature examination. In fact, the logical pattern of the survey generally reflects the logical framework of the research, outlined in the second chapter.
The survey is made up of 33 questions in total. Of the first 28 questions, 8 are yes-no questions, while the other 20 are multiple choice questions. The last 5 questions compose the final part, relative to demographics.
The survey can be subdivided in four core areas: •
the first part, from the question 1 to the question 4, regards broadband and e-Commerce penetration
• • •
the second part, from the question 5 to the question 13, concerns the use of mobile phones the third part, from the question 14 to the question 28, is relative to mobile commerce the demographics, from the question 29 to the question 33
The analysis of the demographics in relation to the m-Commerce diffusion appears to be particularly relevant. Specifically, age, income and occupation are said to influence user’s behaviour in term of technology/innovation adoption (Vishwanatah and Goldhaber, 2003).
5.3.5. Delivery of the survey
In order to be delivered to the specific target in question, the direct link to the survey has been posted in a large number of Internet Italian forums relating to mobile telephony. Each post included a presentation, in which the general aims and objectives of the research were introduced, together with all the useful information needed by the participants to carry out the questionnaire.
6. Survey outcome: evaluation of the results
The survey reached a sufficient number of complete responses by nearly one month after its launch. Out of 181 participants that have started the questionnaire, 125 have completed it successfully, mostly confirming the expectations reviewed in the previous chapters of the report (in particular see section 4.5 Overview of the Italian situation).
Discussion of the results
The presentation of the results will follow the four core parts outlined above in the survey presentation, although giving precedence to the demographics.
From the analysis of the demographics (table 1), male users turned out to be the great majority among the participants (91.20%), with women resulting in a small 8.80%. Looking at the age of the participants, the most pre-eminent age bracket has been 26-30 (46.40%), while 19-22 were 23.20% and 23-25 just 16.80%. The remaining 13.60% was formed by people between 13 and 18 years old. Considering the level of education, instead, the majority is constituted by people who completed college, followed by bachelor (20.80%) and high school (19.20%).
Table 1 Demographic characteristics of the respondents (n=125)
0 3.2 10.4 23.2 16.8 46.4
Between 10 and 12 Between 13 and 15 Between 16 and 18 Between 19 and 22 Between 23 and 25 Between 26 and 30
Level of education
High school College Bachelor Masters Masters II level PhD
19.2 42.4 20.8 15.2 1.6 0.8
Unemployed Student Freelancer Full time employee Part time employee
4.88 53.66 11.38 27.64 2.44
Monthly income (in €)
Between 0 and 400 Between 400 and 750 Between 750 and 1000 Between 1000 and 1500 Between 1500 and 2000 Over 2000
44 7.2 14.4 20 10.4 4
Focusing on occupation, more than half of the users were students (53.66%), with full time employees and freelancers right behind them. These figures obviously affected the results of the last question, which regarded the monthly income of the participants. 0-€400 was the most hit solution (44%). Finally, the 20% of the users gains between €1000 and €1500, while the 14.40% of the participants earn between €750 and €1000.
6.2.2. First part: broadband and e-Commerce
This section regards the survey questions 1, 2, 3 and 4. Such questions aimed at finding out how popular the broadband connection is and the participants’ habits in relation to the Electronic Commerce. Broadband connection emerged as extremely popular among the participants, with a striking percentage of 91.16% (fig. 6.1).
Figure 6.1 SQ1: Do you have a broadband connection at home?
Also Electronic Commerce resulted to be a very common practice within the Italian people selected. The 76.24% of the participants to the survey, in fact, asserted that they have made purchases online in the last 6 months (fig. 6.2).
Figure 6.2 SQ2: Have you purchased products or services through the Internet for your personal use during the past 6 months?
When asked to specify what they have purchased most (fig. 6.3), the participants have indicated their preference for computer (28.39%) and technological equipment (26.81%), while books, music, information and financial services, clothing and other ranged between 5.05% and 12.93%.
Figure 6.3 SQ3: What type of goods or services did you purchase?
Obviously, these last details have a reflection on the expenditure made by the participants (fig. 6.4). The majority of them, in fact, have spent over €100 (66.42%) in the past 6 months, while the lowest share (at least €25) has been reached by the 11.19% of the people.
Figure 6.4 SQ4: How much did you spend on these items in the past 6 months?
6.2.3. Second part: the role of the mobile phone
This subdivision is composed by the survey questions 5, 6, 7, 8, 9, 10, 11, 12 and 13. Again, the aim here is to analyse the role of the mobile phone within the Italian users, with a peculiar stress on the most used mobile phone features. Within this sphere, particular attention is directed to the participants’ relationship with mobile Internet.
The majority of the users who responded to the survey, affirmed to own one mobile phone (44.57%). However, surprisingly, the second major share of users (31.43%) owns more than two mobile phones, while the 24% has at least two (fig. 6.5). This outcome is relatively astounding, actually. In fact, it appears a
further confirmation of the huge penetration of mobile phones in Italy discussed before.
Figure 6.5 SQ5: How many mobile phones do you own?
Equally surprising is the share of the monthly income normally spent by Italian users for their mobile phone usage (fig. 6.6). The large majority (80%) usually does not spend more than 10% of their income, while the 16% of the users do not go beyond the 40%. Only a percentage around the 4% destines more than 50%.
Figure 6.6 SQ6: What percentage of your monthly income do you usually destine to mobile phone usage? (percent)
When asked about the way they use their mobile phone (fig. 6.7), users gave particular relevance to voice calls (17.23%), SMS (16.73%) and taking pictures (12.67%). Emailing, the most popular function among Japanese users, is employed by just a very small share of the participants (3.66%). Interestingly, three out the four features that scored around 8% (mobile gaming, listening to music, video recording and MMS) and stay right behind the three most used functionalities, represent mobile functions that do not require any cost.
Figure 6.7 SQ7: What do you use your mobile phone for?
Nevertheless, when asked to choose among the functions they use the most (fig. 6.8), the participants’ answers have been unanimous: nearly the 3 users out of 4 prefer voice calls (33.58%) and SMS (35.52%), while the third place is occupied by camera (11.68%). Going back to emailing, it is easy to note how unpopular it is among the Italian users. In fact, the actual use of emailing corresponds to a very small percentage (1.46%).
Figure 6.8 SQ8: Which of those functions do you use the most?
Talking about how Italian users usually exchange content stored in their mobile phone with other people (fig. 6.9), Bluetooth got the largest preference (56.68%), but also exchanging files via PC has obtained a good response (28.11%). The element emerging here is again cost. According to this response, in fact, users show their preference towards cheap solutions (which might not be comfortable sometimes), rather than those ones who require ‘avoidable’ expenditure.
Figure 6.9 SQ9: How do you usually exchange the files stored in your mobile phone with other people?
With regards to mobile Internet (fig. 6.10), instead, 3 users out of 5 declare to be interested in such technology (62.13%). On the other hand, relatively large is the percentage of users that do not find it attractive (28.40%).
Figure 6.10 SQ10: Do you find interesting the possibility to use the Internet from your mobile phone?
Among those who responded positively, the 13.86% declares to use mobile Internet every day, while the 16.83% more than once a week (fig.6.11). However, the largest part is constituted by those who use mobile Internet very rarely (29.70%) and never (24.75%). Considering that, it follows that although interested, nearly the 50% of the participants refrain from surfing the Internet from their mobile phones for some reason.
From the analysis of the responses given by those who are not interested in mobile Internet or have not a definite opinion, instead, the economic factor resulted again dominant (fig. 6.12). Cost, in fact, has been suggested as the main reason for not choosing mobile Internet (34.62%); connection speed and usefulness also have an important relevance in user’s opinion, respectively with the 20% and 17.69%. Curiously, security and privacy accounted for a total 10% of responses.
Figure 6.11 SQ11: If yes, how often do you connect to the Internet via your mobile phone?
Figure 6.12 SQ12: If not or not sure, please indicate the most important factors that influence your opinion.
The answers to the question 13 (fig. 6.13), instead, confirmed the importance of the mobile phone as a communication tool which helps improving interaction with friends (41.88%). That is according to the Italian users the main purpose of mobile phone utilisation. However, mobile phones are also seen an instrument which enhances coordination of the daily activities (30.77%). Fashion, indicated
as a very influencing factor especially among teens, was seen relatively significant in this case, with a score of 12.82%. Within ‘other’ (7.69%), instead, the majority of the answers given by the participants remind to the communicative function of mobile phones and the comfort connected to the possibility of simplifying coordination.
Figure 6.13 SQ13: What do you think the main aims and motivations associated to the purchase of a mobile phone are?
6.2.4. Third part: the diffusion of the m-Commerce
This part is the largest one in the survey and covers the questions from 14 to 28. The goal here is to understand how Mobile Commerce is perceived within the mobile phone heavy users, what driving factors are connected with its present adoption and what its future perspectives in the Italian market are. Also, two specific questions concerning the popularity of 3G mobile phones have been submitted.
Precisely, the diffusion of 3G mobile phones is what the question 14 aims at finding out (fig. 6.14).
Out of 159 respondents, 101 (63.52%) answered positively. It certainly represents a notable percentage. However, the opinion of those 58 which represent the 36.48% that do not own a 3G mobile phone reflect, somehow, the current situation in Italy, where still a great part of the population still do no think that shifting to the third generation is needed.
Figure 6.14 SQ14: Do you have a 3G mobile phone?
This opinion is corroborated by the results obtained with the question 15. Of those 58 that do not own a 3G mobile phone yet, the majority (38 people, 65.52%) still confirm their intention not to buy one (fig. 6.15), attributing to the high cost of the services (54.05%) the most valid reason for not switching to the third generation (fig. 6.17). This element is also present in the second motivation chosen by the participants: it is more convenient to find cheaper methods for getting the information they require or exploiting the services they need (32.43%), rather than spending useless money with 3G services. Finally, the quality of the services is not considered a problem for mobile users (8.11%), and even less concern there is on security (0%).
On the other hand, the remaining 20 people (34.48%) would take into consideration buying a 3G mobile phone, symbolising a mild interest towards such sphere of the mobile telephony.
Figure 6.15 SQ15: If no, would you be interested in buying a 3G mobile phone?
Moreover, among those users which would buy a 3G mobile phone (fig. 6.16), the great majority (70%) would also be keen on using 3G services, while the 20% declares to be unsure about that.
Figure 6.16 SQ16: If yes, would you be interested in using 3G services?
Figure 6.17 SQ17: If no, what would be the main reason?
When asked to express how they would define their level of knowledge regarding m-Commerce, the participants gave answers more or less balanced (fig. 6.18). The largest share is represented by those who have minimal competence (25%), followed by those who are sufficiently aware (17.95%), those who have comprehensive (16.67%) and vague knowledge (16.03%). Considering instead the two extremes, the most skilled ones account for the 7.69%, while those who are totally new to mobile commerce represent the 16.67% of the participants.
Figure 6.18 SQ18: Please state your own level of knowledge regarding mobile commerce
The partial lack of competence in relation to Mobile Commerce is partially reflected in the actual practice of purchasing goods or services via mobile phone (fig. 6.19). Four people out of five (80.77%) have never made any purchases through their mobile phone. This striking datum demonstrates how still far such practice from the Italian people’s habits is.
Figure 6.19 SQ19: Have you ever used your mobile phone to purchase any goods or services?
However, considering the answers provided by those users who have purchased goods or services via their mobile device (fig. 6.20), mobile Internet and mobile gaming are among the most popular purchases, respectively with 14.68% and 13.76%. Apart from these two top ones, the remaining choices are pretty balanced, ranging from 1.83% of community chat to 10.09% of credit card services. An interesting score has been achieved by the category indicating localisation/maps services and emailing (9.17%). Video telephony, instead, the core product of the principal Italian 3G provider, obtained only 8.26% of the total favours.
Figure 6.20 SQ20: If yes, which goods or services did you purchase/use?
Among those who have never purchased via mobile phone (19.23%), the majority finds cost (25.91%) the most relevant explanation for their behaviour (fig. 6.21).
Figure 6.21 SQ21: If no, please indicate the reasons why you have never done it before
Also the lack of competence (seen as lack of promotion and lack of knowledge) occupies a sizeable percentage, with a total 32.39%.
Comparing to the results referring to the mobile Internet usage, concern on security has nearly the same prominence (7.69%), renewing that users are do not trust mobile phone services that would require the input of their personal data. Within the category ‘other’, in general Italian users have reasserted that it is safer and cheaper to use other means, while a few users have stated that a further element is related to the ‘uncomfortable’ features of the mobile phones currently on the market.
Subsequently, participants were asked to express which goods or services they would purchase if they had the chance (table 2).
Italian mobile phone users have shown remarkable interest in the eventuality of booking tickets or seats, maps (GPS) and location based services, email and mobile Internet.
Average interest has been shown towards general information services and video telephony.
Very mild involvement has instead characterised the choice towards credit card services and music streaming and downloading.
Finally, no interest has been shown for gambling, sporting services, mobile games, ringtones and community chat. With regards to these last options, the values of the standard deviation of each element suggest that the opinion of the users has been particularly unanimous.
Table 2 SQ22: If you have never purchased any goods or services via your mobile phone, which of the following services would you intend using?
1= absolutely no 2= slightly interested 3= not sure 4= interested 5= very interested Mean Booking tickets/seats Credit card services Gambling Sporting services Mobile games General info Maps (GPS) Ringtones Community chat Video telephony Music streaming/downloading Email Mobile Internet 3 3 1 2 2 3 4 1 2 2 2 4 4 Standard deviation 1.5 1.6 1 1.2 1 1.5 1.4 0.5 1 1.4 1.4 1.5 1.4 Most hit value 4 1 1 1 1 1 4 1 1 1 1 5 5
The next question shifted the attention to the possible medium through which users could receive information about m-Commerce and mobile services (table 3). Participants had to rank 7 different channels from 1 (highest score) to 7 (lowest score).
Considering all the solutions proposed, only websites registered high consensus. Furthermore, SMS, TV, printed matter and email/newsletters all obtained an average score. Finally, radio and billboards got the lowest percentage of favour among the sample selected.
Table 3 SQ23: Please state, in order of preference, the medium by which you would prefer to receive information about Mobile Commerce and mobile services
Score range (from 1 to 7) : 1 = Highest, 7 = Lowest; number of hits (percent) 1 SMS Websites TV Radio Billboards Printed matter Email and newsletters 26.12 32.84 13.43 2.99 5.22 6.72 12.69 2 12.69 25.37 12.69 7.46 10.45 17.91 13.43 3 5.22 11.94 18.66 17.16 11.94 13.43 21.64 4 11.94 8.96 14.93 17.91 15.67 22.39 8.21 5 2.99 7.46 16.42 23.88 21.64 18.66 8.96 6 15.67 7.46 11.94 17.16 11.94 18.66 17.16
7 25.37 5.97 11.94 13.43 23.13 2.24 17.91
After that, users were asked to state which factors they think are most relevant for using a Mobile Commerce service (table 4).
Table 4 SQ24: Please indicate the importance of the following factors in using a particular m-Commerce service
1= no importance 2= slightly important 3= not sure 4= important 5= highly important Mean Cost Ease of use Transmission speed Privacy Connection quality Richness of content received Security Usefulness 5 4 4 4 4 4 4 4 Standard deviation 1 1.2 0.9 1 0.9 1.1 0.9 1 Most hit value 5 4 5 5 5 5 5 5
In general, all the factors have been considered important. Some of them, however, have been portrayed as critical: it is the case of cost, privacy and security.Slightly less importance is given to all the other elements in question, specifically ease of use, transmission speed, connection quality, richness of
content and usefulness. Lastly, the opinion regarding every single element in question resulted to be shared by the great majority of the participants, as indicated by the standard deviation.
Subsequently, question 25 asked the mobile phone users to state how they would spend their mobile credit if choosing among communication, entertainment, financial and location-based services (fig. 6.22). Following the indications gathered so far, communication services confirmed their preponderance (53.75%). After that, the three other categories collected a balanced preference, with entertainment services occupying the last place.
Figure 6.22 SQ25: How would you spend your mobile budget given the following services?
The last set of questions regarding Mobile Commerce directed the attention to the Japanese scenario (fig. 6.23). Participants were asked their opinion about the possibility Italy has of becoming a country where mobile phones will have more and more power, up to replace credit cards. The largest share of them showed a positive opinion (55.56%), denoting ‘great trust’ in mobile technology.
Figure 6.23 SQ26: In Japan it is possible to use a mobile phone to purchase more and more goods and services like with a credit card, pursuing a policy that will bring Japanese people to completely ‘replace their wallet’ in a very short time. Do you think it to be a good perspective also for the Italian scenario, even if in a longer term?
To those people who declared to be not sure (19.05%), then, it was asked to indicate which factor they believe to be more pre-eminent in that case (fig. 6.24). According to them, an extremely safe system would be the principal key for a positive result (45.83%). Cost was then pointed out as the second factor (25%), while finding benefits from such a perspective was selected by 1 users out of 5 (20.83%). Less importance was given to the fact that such change would be radical (8.33%), stating that Italians would get used without any particular worries to those new practices.
Figure 6.24 SQ27: If not sure, please indicate which of the following the most influent factor is in this case
Those users who were more categorical and affirmed that such perspective would not be applicable to the Italian context (fig. 6.25), stated that the major motivation would lay in the fact that it represents an eventuality too distant from the Italian culture (40.63%). The 21.88% of the participants stated both that they would not have any improvement and that it is much better to maintain the actual distinction between mobile phones and credit cards. Finally, fewer concerns are directed to risks connected to security and privacy (15.63%).
Figure 6.25 SQ28: If not, please indicate why
The results obtained with the online survey generally reasserted the considerations made after the evaluation of the literature and the analysis of the case study. The sample targeted has confirmed a strong penetration of mobile phones: more than the 50% of the users interviewed owned at least 2 mobile telephones, a percentage that ‘justifies’ Italy’s second place in mobile phone diffusion and the hopes for a future wide embracement of the Mobile Commerce.
However, Italians do not seem very keen on considering mobile phones beyond the sphere of communication yet. As anticipated in the previous sections, in Italy the mobile phone is a tool connected to many elements (many of them cultural), but what it actually represents is reassumed in Fortunati’s thought: the mobile phone has been successful because it has been proposed as an easy-to-use toy, viewed, in terms of communicative functions, as an extension of the wired phone. The results concerning the survey question 8 have clearly highlighted this view: Italians use their mobile phone almost only to make voice calls and interact via SMS. Nearly the 70% of the participants have responded in that direction, a huge confirmation of the communicative importance of the mobile phone, which gets even more meaningful if compared to the myriad of functions that users have now at their disposal. However, the employment of the other mobile phone features is characterised by a constant common denominator: the avoidance of charges. This factor is also recognisable in the daily practice: beeping phenomenon, as underscored by the literature, and utilisation of cheaper strategies like transferring content via Bluetooth or pc (highlighted by the survey) instead of, say, MMS, all renew the same concept.
The economic factor has then emerged powerfully within the mobile phone utilisation sphere, as also revealed by the amount of monthly income that the users who responded to the survey destine to their telephone utilisation. Since the heavy users of mobile phones in Italy coincide with people with a low purchasing power (due to many reasons, but mostly to the objective difficulties in finding a valid job, an aspect directly connected to the individual’s separation from the family circle and the subsequent creation of the own independence), cost can be easily reckoned as the most relevant factor not only in this context, but in the every day life indeed. And in 2003, when H3G launched the first mCommerce solution, such aspect has obviously increased its emphasis, seen the high price for both handsets and mobile services. Nevertheless, cost has not been the only obstacle in the further development of mobile telecommunications in Italy so far. Strictly connected with what has been just said above about H3G, also the creation of a proper network infrastructure should have been one of the absolute priorities. In Japan, that choice revealed to be extremely on the beam. Logically, in fact, it is impossible for a product or service to hit if it is not provided efficaciously. That seems to be one of the biggest mistakes made in Italy: only now, many years after the m-Commerce boom in Japan, Italy has reached an almost complete coverage of its territory. Infrastructure has also affected the quality of the services (most of them have relied on slow connections up till a very short time ago), which has been an issue that users have always taken into account. Additionally, the conception of the Internet is still anchored to the wired experience. Users associate the navigation of the web exclusively to a desktop pc, and that is not a surprise. Browsing the Internet from a mobile phone should be conceived as a different experience. In Italy, however, it is just seen as an ‘uncomfortable’ way to perform the same practice; huge limitations of the handsets, lack of complete network coverage, cost, usefulness etc. all contribute to the slow separation of mobile phones from the mere communicative area. As
Scifo underlined, Italians perceive the mobile phone as communication instrument, while the Internet as a domestic practice: two different experiences which do not seem to find a connection in any way yet. The establishment of 3G telephony and m-Commerce is directly influenced by this situation. Why should people pay for services that can be obtained in different ways, sometimes more comfortably and at cheaper prices? In a country where 3G data prices are seven times more expensive than Japan (OECD, 2007), a scenario of this kind is fully comprehensible. To a broader extent, the perspective of using the mobile phone as an electronic wallet resulted to be fascinating to many, but at the same time absolutely utopian to many others. As a large number of users stated in the survey, that one would be a solution extremely bound to a set of assurances in terms of security and privacy and, in general, to a safe system which is too far from the one existing at the moment. For others, instead, it is a view that does not coincide with the Italian culture at all. If we think about the ‘technophobia’ typical of the Italian people discussed by Fortunati, that aspect does not represent a surprise either. The slow diffusion of the e-Commerce also configures in the same context, testifying Italians’ hesitation towards technology.
On a broader perspective then, if we compare the Japanese TLC development to the situation in Italy, many divergences crop out. In Italy, fundamentally, the lack of a ‘mobile culture’, on the model of the one present in Japan prior to the mobile phone establishment, has not been supported by the cultural features proper of the Italian society with regards to the mCommerce embracement. Culture, however, which has been the driving factor for its diffusion at the beginning as a tool that enhances the management of relationships, now is restraining its evolution.
In any case, the sensation is that this slow process will finally bring to the embracement of the Mobile Commerce, although the current constraints. Users can now choose among a pretty wide range of services, but mobile providers will need to convince their customers with specific policies, based on low costs and high quality of the services, following the pattern promoted throughout the enhancement of competitiveness by the major organisations of the TLC and economic sectors, and now even by governments. As noticed by many analysts (Abacus.it, 2003; PassioneMobile, 2006), the new TLC technology will definitely occupy a dominant place in the next future, around the 2010. In the meantime, what the main actors in the mobile telephony scene have to do is to solve the core issues that still make doubtful the majority of the Italian users, in order to create that safe and affordable system they are rightly invoking.
Starting from a full analysis of the impact of mobile phones, both from the verbal and non-verbal communicative point view, Italy configured as one of the best scenarios for the current and future evolution of the TLC sector. With a level of penetration that has gone beyond the 100%, the mobile phone can be easily defined as the most popular tool within the Italian society. Teenagers, in particular, have embraced it extremely quickly, so to be defined the real heavy users of such instrument. Many are the factors linked to its owning and utilisation: in general, the mobile phone represents a tool that enables the personal expression, both verbally and non-verbally. In fact, the mobile phone user ‘shapes’ its device according to its own personality, transforming it into a symbol of his way of being, right as fashion does. However, due to cultural and technical factors, the figure of the mobile phone is struggling to find a place outside the mere communicative context, as something that might mean more than just an instrument for the management of the relationships. And right among the core factors that are influencing the growth of the telecommunications sector in Italy, the importance of relationships is surely the most significant cultural element that is limiting such process. People, in fact, consider the mobile phone an extension of the wired telephone, enriched by further and sometimes ‘useless’ functions. Another cultural aspect is the wellknown lack of proneness towards technology, which gets enormous proportions when the technology itself ‘risks’ to undermine ticklish areas like security and privacy. Among the technical factors, instead, several elements emerged in the Italian context as core ones in relation to the mobile telephony evolution.
Cost can be deemed as the most influent element in Italian users’ decisions. The price of the new handsets, those which enable a better fruition of the mCommerce services, have started to decrease only for a short time, while the costs connected to the new mobile products and services are still seen as too expensive. Therefore, users tend to bypass the charges connected to the new practices, simply adopting different (but not less efficacious) methods. Moreover, the analysis has stressed how the infrastructure has contributed to limit the mobile services diffusion and, combined to costs, has configured as an unworthy compromise to the majority of the Italian users of mobile phones. Additionally, the slow diffusion of broadband (which might be justified with the small proneness towards technology) and Electronic Commerce has not ‘educated’ the Italians towards such a close concept like the m-Commerce, which has been suddenly projected into a market that was not ready to fully ‘appreciate’ and embrace it.
Nevertheless, the future outlook is bright. In fact, from the research conducted it emerged that the new telecommunications generation will only need a few more years in order to conquer the Italian dimension. The measures adopted in this direction lead to think that the way undertaken is the correct one, and that with the contribution of all the main actors of the mobile telephony scene, especially for what regards core issues like security, privacy, promotion of the services and cost, it is just a matter of time for the Mobile Commerce to become reality even in the Italian context.
This research project has tried to cover all the most relevant aspects connected to the Mobile Commerce situation in Italy, aiming at discovering what the core motivations for its slow penetration are. The analysis of literature, a case study and the results obtained throughout an online survey has provided valid answers in relation to these issues.
However, due to the extreme complexity of the topic and the evident limitations of the analysis conducted, further investigation is needed in all directions in order to better understand the dynamics of the m-Commerce phenomenon.
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Appendix A: Original Version of the Survey
Appendix B: Translated Version of the Survey
1) Do you have a broadband connection at home? Answers: yes, no
2) Have you purchased products or services through the Internet for your personal use during the past 6 months? Answers: yes, no
3) What type of goods or services did you purchase? Answers: books, music, computer equipment, technological equipment (mp3 players, mobile phones, TV, etc.), information/financial services, clothing, other
4) How much did you spend on these items during the past 6 months? Answers: less than €25, €26-€50, €51-€75, €76-€100, more than €100
5) How many mobile phones do you own? Answers: 1, 2, more than 2
6) What percentage of your monthly income do you usually destine to mobile phone usage? Answers: 10% or less, 20%-40%, 50%, 60%-90%, 100%
7) What do you use your mobile phone for? Answers: voice calls, SMS, MMS, mobile Internet, email sending/receiving, listening to music (e.g. mp3), recording
videos, taking pictures, ringtones (periodical selection of), play games, community chat, other
8) Which of those functions do you use the most? Answers: voice calls, SMS, MMS, mobile Internet, email sending/receiving, listening to music (e.g. mp3), recording videos, taking pictures, ringtones (periodical selection of), play games, community chat, other
9) How do you usually exchange the files stored in your mobile phone with other people? Answers: MMS, Bluetooth, email, via PC
10) Do you find interesting the possibility to use the Internet from your mobile phone? Answers: yes, no, not sure
11) If yes, how often do you connect to the Internet via your mobile phone? Answers: every day, more than once a week, once a week, a few times a month, extremely seldom, never
12) If not or not sure, please indicate the most important factors that influence your opinion (tick more than one if needed) Answers: knowledge concerning the service, security, privacy, ease of use, cost, connection speed, usefulness, other
13) What do you think the main aims and motivations associated to the purchase of a mobile phone are?
Answers: it enables better communication with peers, it enables better communication with the family, it enhances coordination, it is a symbol of fashion and ‘personal’ style, other
14) Do you have a 3G mobile phone? Answers: yes, no
15) If no, would you be interested in buying a 3G mobile phone? Answers: yes, no
16) If yes, would you be interested in using 3G mobile services? Answers: yes, no, not sure
17) If not, what would be the main reason? Answers: the quality of the services would not satisfy me; the cost of the services would be too high if compared to the actual use I would make of them; I can find cheaper ways to obtain the information I need or to get access to the services I prefer; 3G services are not secure: I think that my personal data would lay on the line; other
18) Please state your own level of knowledge regarding mobile Commerce Answers: highly skilled, comprehensive, aware, vague, minimal, null
19) Have you ever used your mobile phone to purchase any goods or services? Answers: yes, no
20) If yes, which goods or services did you purchase/use? Answers: booking of tickets/seats, credit card services, gambling, sporting services (goals, highlights etc.), mobile games, general info (weather, traffic, news, events etc.), maps (GPS), ringtones, community chat, video telephony, music streaming/downloading, email, Internet, other
21) If no, please indicate the reasons why you have never done it before (you can choose more than one option) Answers: lack of knowledge, cost, low ease of use, security reasons, low usefulness, connection quality, lack of promotion, other
22) If you have never purchased any goods or services via your mobile phone, which of the following services would you intend using? (Level of interest range: absolutely no, slightly interested, not sure, interested, very interested) Answers: booking of tickets/seats, credit card services, gambling, sporting services (goals, highlights etc.), mobile games, general info (weather, traffic, news, events etc.), maps (GPS), ringtones, community chat, video telephony, music streaming/downloading, email, mobile Internet
23) Please state, in order of preference, the medium by which you would prefer to receive information about Mobile Commerce and mobile services (Range: 1 – Highest / 7 – Lowest) Choices: SMS, websites, TV, radio, billboards, printed matter, email and newsletters
24) Please indicate the importance of the following factors in using a particular m-Commerce service (Level of importance range: no importance, slightly important, not sure, important, highly important) Choices: cost, ease of use, transmission speed, privacy, connection quality, richness of content received, security, usefulness
25) How would you spend your mobile budget given the following services? (the total of all answers must add up to 100) Answers: communication (e.g. SMS, MMS, email), entertainment services (music streaming/downloading, films, highlights, TV), financial services (online shopping, banking, online booking), location based services (roadmap, restaurant/cinema reservations)
26) In Japan it is possible to use a mobile phone to purchase more and more goods and services like with a credit card, pursuing a policy that will bring the Japanese people to completely ‘replace their wallet’ in a very short time. Do you think it to be a good perspective also for the Italian scenario, even if in a longer term? Answers: yes, no, not sure
27) If not sure, please indicate which of the following is the most influent factor in this case Answers: only if the Italian users would be gradually educated to such a radical change; people would need to rely on a safe system which is too far from the one existing now; it will depend on the costs of such a technology; only if people will find this new perspective a great source of benefit
28) If not, please indicate why Answers: it is a perspective that does not go along with the Italian culture at all; people would not embrace this possibility as there would be too many risks connected to security and privacy; it is better to keep the distinction between mobile phones and credit card based on their original purposes; I do not think that that type of innovation would improve our life
29) Please select your gender Choices: male, female
30) What is your age bracket? Answers: 10-12, 13-15, 16-18, 19-22, 23-25, 26-30
31) What is your level of education? Answers: high school, college, bachelor, masters, masters II level 8 , PhD
32) What is your occupation? Answers: unemployed, student, freelancer, full time employee, part time employee
33) What is your monthly gross income? Answers: 0-€400, €400-€750, €750-€1000, €1000-€1500, €1500€2000, over €2000
University rules in Italy have changed not so much time ago; so many people would still refer to the old system. Additionally, two types of masters are available (master di primo e di secondo livello)
Appendix C: Introduction to the Survey
Ciao a tutti! Mi chiamo Roberto, ho 26 anni e sono iscritto alla University of Sheffield (UK) dove sto per terminare un master in Multilingual Information Management. Manca ormai solo la tesi, finalmente! L’ obiettivo della mia tesi di ricerca e’ quello di scoprire le principali ragioni che riguardano la lentissima evoluzione relativa al Mobile Commerce (cioe’ la possibilita’ di acquistare beni e/o servizi tramite il proprio cellulare) in Italia, esaminandone la situazione odierna e raffrontandola con altri paesi in cui l’mCommerce e’ ormai una realta. Prendendo a modello il Giappone, l’esempio migliore in questi termini dove e’ possibile utilizzare il proprio telefono cellulare a mo’di carta di credito per avvalersi di sempre piu numerosi servizi, la mia indagine tocca principalmente gli aspetti socio-culturali ed economici di tale fenomeno. Per ottenere delle risposte credibili a supporto della mia analisi, ho deciso di utilizzare un questionario online da rivolgere a tutti coloro che facciano uso di un cellulare (chi non ne ha almeno uno oggigiorno!?), dal momento che solo gli utenti italiani possono confermare quanto da me sinora ottenuto e ipotizzato attraverso statistiche e letteratura. Il sondaggio, che si rivolge a tutti coloro utilizzino un cellulare e abbiano tra i 10 ed i 30 anni, e’ assolutamente anonimo e pertanto non presenta alcun rischio relativo a privacy e sicurezza. E’ stato realizzato sul sito Surveyz.com ed e’ costituito da 28 domande a risposta multipla. Dategli un’occhiata, vi rubera’ al massimo 5 minuti. Potete dunque stare piu che tranquilli! Cliccate sul link qua sotto e verrete portati direttamente alla prima pagina del sondaggio. http://www.surveyz.com/TakeSurvey?id=72184&responseCheck=false Vi ringrazio anticipatamente per la collaborazione!!! Roberto
P.S. Qualora aveste commenti o suggerimenti da proporre, scrivete pure, mi sarete senz’altro d’aiuto!