The mobile Internet: Are we there yet?

After years of hype, wireless users in the United States are waiting for all the technology pieces to come together to make surfing the Internet from their handsets as easy as it is on their PCs at home.

So how close are we to simple and robust Web surfing from a cell phone?

The answer depends on whom you ask. Some experts say the mobile Internet is already here. Millions of people throughout the world are accessing wireless application protocol, or WAP, Web sites--stripped-down sites specially designed for mobile handsets. But other experts argue that WAP sites are too limited. Some people say an entirely new domain name, called "dot-mobi," should be used for Web sites that are optimized for mobile surfing. Still others propose using intelligent browsers to turn traditional Web sites into something that can be viewed on a small handset.

"I think what people really want is to be able to access the same sites they access on their PCs, but from their phones," said Matt Hatton, a senior analyst with the Yankee Group based in the United Kingdom. "Once we can get the experience to look and feel more like the traditional Internet, more people will be willing to spend the money to pay for the services."

While there is still a lot of disagreement over how subscribers should be accessing mobile Web sites, there's almost complete agreement that when the mobile Internet finally hits mainstream adoption, it's going to be big.

The largest U.S. mobile carriers--Cingular Wireless, Sprint Nextel, T-Mobile and Verizon Wireless--are already seeing huge growth in data usage. Together they generated more than $6.3 billion in wireless data revenues for the first half of 2006, said Chetan Sharma, an independent mobile wireless consultant. Overall, wireless data service revenues, which also include several regional carriers, exceeded $7 billion in the first half of the year. Mobile carriers in the U.S. could generate more than $15 billion in data revenue for all of 2006. This is almost a 75 percent jump from 2005, when data services for the entire year accounted for $8.6 billion.

To date, most of the mobile data growth in the United States has been from consumer messaging services, like short-message service (SMS), and from enterprise data services. But unlike mobile Internet usage by wireless customers in Japan or South Korea, surfing the mobile Web in the U.S. hasn't yet caught on. In a survey conducted by Yankee Group in April, about 18 percent of wireless users in the U.S. said they had at least tried using the mobile Internet, but only 6 percent considered themselves regular mobile Internet users.

Experts say the biggest reason why users aren't using their cell phones to access the Web more often is that compared with the traditional Internet, today's mobile Internet is still fairly rudimentary when it comes to Web site quality and ease of navigation. Part of this experience is determined by the technology used by Web site developers and phone manufacturers providing access to sites. But it's also impacted by the fact that most users don't yet have access to faster 3G networks and affordable 3G handsets, which greatly improve quality.

"We're just waiting for all the pieces to come together," said Linda Barrabee, program manager for Wireless and Mobile at Yankee Group in the U.S. "I think once carriers improve the experience and solve the network and handset penetration issues, the services will become a lot more appealing to consumers."

Specialty services
New mobile virtual network operators, or MVNOs, such as Mobile ESPN and Helio, are trying to improve the mobile Internet and multimedia experience for consumers. Mobile ESPN is going after sports fanatics with a service that offers video clips, alerts and news that can be downloaded onto phones. And Helio is targeting young hipsters by offering high-end phones for accessing interactive games, high-quality videos and Web content. The company struck a special deal with the MySpace social-networking Web site, so users can read and write MySpace mail from their handsets, send bulletins, read and write blogs, view photos and profiles, and post photos to the MySpace space directly from their phones.

But because Mobile ESPN and Helio lease capacity from Sprint Nextel instead of owning their own networks, their services are dependent on the underlying speed of the network, which means that even though the handsets are capable of doing much more, downloading content or surfing Web pages could still take a long time. Early indications suggest Mobile ESPN and Helio are struggling to sign up customers.

Most mobile Internet users in the U.S. access WAP sites, which provide only basic information on the Internet, like news summaries. When WAP first came out, mobile operators pitched it as the Internet for your phone. But the WAP sites often loaded very slowly and they offered only text content with few, if any, graphics. They were also difficult to navigate, requiring users click through several layers of menus.

"People who first surfed WAP sites were disappointed by the experience," said Eskil Sivertsen, a spokesman for Opera Software, a company that has developed a mini-browser that allows users to access traditional Web pages on their mobile handsets. "And they've never really come back."

Advancing toward full Web browsing
But a newer version of the protocol, WAP 2.0, has been introduced, and some people believe WAP has finally come of age, rendering more robust mobile Web pages that offer one-click access. In fact, the number of WAP Web sites has grown exponentially in the last couple of years. And companies such as Bango, which helps mobile Web site owners monetize their mobile content, say they've seen an explosion in new users accessing WAP-based content from their handsets. Bango sees 400,000 new users each month and the company processes more than 9 million transactions every month.

"Twelve or 24 months ago, I would have said that the WAP browsers weren't particularly rich, but that's really changed," said Adam Kerr, vice president of North America for Bango. "And we're seeing the number of WAP sites growing. The great thing about WAP is that it allows users from any carrier, using any handset, to access a site."

Still, some experts say that WAP is only the beginning of where the mobile Internet is headed. As carriers roll out faster wireless networks based on 3G technology and handset makers sell more-sophisticated handsets with more processing power and memory and larger screens, users will expect a mobile Internet experience that is similar to the one they experience at home on their PCs.

"WAP is really the midway solution to getting around having low bandwidth speeds on a 2 and 2.5G network," Yankee Group's Hatton said. "I think what you really need to make it a good user experience is a full HTML browser."

Typically, full mobile Web browsing has been reserved for devices, such as smart phones, that have powerful processing capabilities and operating systems. But some companies have also developed intelligent mini-browsers for less-sophisticated phones. In January, Opera Software introduced Opera Mini, a free downloadable browser client designed for Java-enabled cell phones that strips down the size of regular Web pages to allow them to transfer to mobile phones more quickly and fit on smaller screens. Sites viewed through the Opera Mini browser are compressed about 70 percent to 80 percent.

Since its launch, the company says its little browser has been downloaded onto more than 5 million handsets worldwide. Some carriers, such as T-Mobile, are also preinstalling the browser into phones it sells.

But new applications and browsers are only two of the many elements needed to improve the user experience. Users also need access to fast 3G wireless networks and 3G handsets, experts say. In the U.S., only about 7 million subscribers use 3G services out of a total of about 207.9 million wireless subscribers, according to data from wireless consultant Sharma. Other analysts agree that more penetration in the market is needed.

"The installed base of 3G phones is still limited," Yankee's Barrabee said. "It's building momentum, but until you have the speed of the 3G network and 3G phones in customers' hands, it's not going to be a great experience."