IP drives the mobile trading revolution

If, as many predict, mobile commerce is set to be the next big thing, then customers need to get their networking infrastructure in place now.

That's the message coming from companies experimenting with the range of wireless services on the market, such as Wap, general packet radio system (GPRS) and so-called third-generation services such as universal mobile telephone system (UMTS).

There will be 1.5 billion mobile subscribers worldwide by 2006, predicts London-based analyst Ovum. Some 684 million of these will use 'micro-browser' facilities based on Wap or its successors, compared with 500 million internet users.

At the moment, internet protocol (IP) infrastructure is the architecture favoured by pioneering users for implementing the initial phases of mobile commerce strategies. This theoretically allows them to adopt a 'plug-and-play' approach to ecommerce services on mobile devices, and makes them less dependent on whatever next-generation technologies the telecommunications and mobile device suppliers have up their sleeves.

Banking on ebusiness
Barclays has made a £325m investment in ecommerce, which it says will enable its IP infrastructure to serve as the front-end of its mobile online business, including stock broking and credit banking services.

Barclays is looking to mobile technologies for substantial long-term cost savings and is keeping its options open: its IP-enabled back-office systems are designed to host both GPRS and Wap platforms.

The bank has linked up with a number of external service providers to connect its IP infrastructure to customers. In March, it signed a three-year contract with BT's mobile arm BT Cellnet and software giant Oracle, which will result in a "flexible" distribution and middleware system for its applications, according to a Barclays' spokesman.

Barclays believes that an IP infrastructure is a future-proof strategy for handling any new mobile service, such as Wap, GPRS or even third-generation (3G). The bank is relatively late in developing its Wap strategy, having been beaten to it by rivals Halifax and Woolwich. As a result, Barclays will leap straight to its successor, GPRS, and is trying out a GPRS-based service for its credit card customers in conjunction with BT Cellnet.

The bank's business will be "particularly affected" by the move, says Fiona Kelly, development manager for ecommerce at Barclaycard. The company expects to enable its customers to check balances and other functions via GPRS handheld devices "within the next few months", she adds.

Bridging the gap
The IP infrastructure approach has been strengthened by the announcement earlier this month that Nokia is to release a so-called All-IP platform to bridge the different worlds of Groupe Speciale Mobile (GSM) and Wap, enabling GPRS to be adopted sooner than had been expected.

"The Nokia 3G All-IP Core will support all major radio access standards, blurring the difference between the fixed and the mobile network user by combining Nokia carriers' know-how with the most advanced IP architecture," says Lauri Melamies, senior vice president for network systems at Nokia Networks.

Telecommunications standards organisations and related bodies have also agreed to co-operate to produce a complete set of globally applicable technical specifications for 3G mobile systems. These will be based on adapted GSM core networks and radio access technologies, supported by the Third Generation Partnership Project (3GPP).

At its last session about a month ago, 3GPP adopted the latest version of IP, version 6, as the fundamental building block of all IP mobile networks.

The internet is currently based on IP version 4, and version 6 will add extra functionality, such as the transmission of digital signatures for more secure ecommerce transactions. Third-generation mobile service providers are also expected to adopt the All-IP Core, as it has been approved by 3GPP.

Third-generation wireless communications are expected to be commercially available by the end of 2002. In the interim, high speed standards such as GPRS are expected to extend mobile internet business opportunities beyond the limited functionality of Wap.

"Today, voice probably accounts for 95 per cent of mobile operators' revenues. We believe that by 2005, mobile internet services will account for roughly 60 per cent," says Melamies.

Early adopters of GPRS include Finnish telecoms firm Sonera, online bookseller Amazon.com, global banking group HSBC, and UK web firm mywebworld.com.

These widely differing businesses are all linked by the need to interact in real time with their customers and to offer access to data from any mobile device. Mywebworld.com, for example, will offer its subscribers in central London up-to-date information on restaurant and theatre ticket availability.