Vending sector next for m-commerce

TALLINN - M-commerce, the process of buying services or products with the help of a mobile phone, was the subject of a recent seminar in Tallinn. Although m-commerce is in its infancy, the popularity of i-banking in Estonia could indicate room for growth of mobile commerce in the country.

The seminar, organized by First Tuesday Baltics, a consulting company majoring in technology issues, allowed Estonian mobile business professionals and their Finnish colleagues to share their experience. So far, the only service available in Estonia is paying for parking over a mobile with the help of SMS or WAP.

Andrus Hiiepuu, board member of Radiolinja Eesti AS, the second largest mobile communication operator, said consumers are not responsible for the relatively minor popularity of m-commerce. People do want to use convenient services.

"In the case of Internet bank transactions it is easier to go online than to go to the nearest bank, and that's why i-banking is so common in Estonia," said Hiiepuu.

"When the terminals (mobile phones) are as easy to use as desktop computers, we can expect a certain growth of mobile commerce," he added.

Hiiepuu said he thought mobile parking was really the first working and convenient service of Estonian m-commerce. "The next step would be various vending machines such as Coke and coffee machines," Hiiepuu predicted.

It is already possible (for EMT clients only) to buy Coke from a vending machine by calling a special number. The subscriber gets the drink cost added to his mobile phone bill. But so far the only machine of that kind stands in the office of EMT, the largest mobile communication company in the country. Mobi, a young Estonian company founded in Tartu this year by a couple of mobile communication fans, enjoys the growing support of giants such as EMT, the country's largest mobile communication operator.

Rain Rannu, director of Mobi, said the niche of a new service operator was completely free and that enabled the growth Mobi experienced. In the beginning the company had three employees (who actually were the founders), and now has a staff of 23.

"We began active work this summer, and an SMS quiz at Elton John's concert was the first serious challenge for us," says Rannu.

The quiz, carried out minutes before the concert, let the crowd answer a simple question about Sir Elton John by sending an SMS to a special short number.

"Mobile communication companies cannot afford testing all the possible additional services such technology as SMS can provide. So they need third party companies," Rannu explained the current situation in the Estonian mobile communication market.

The point of the services Mobi provides is to bring added value and convenience to satisfy entertainment and other demands of mobile phone users. The additional value can be a quiz with a prize on offer, an SMS-chat on a video screen in a night club or audience polls at large conferences.

Western experts predict the popularity of SMS will decline in the next two years as GPRS, which enables faster data transfer, will conquer the markets, added Rannu.