Russia’s Cellular Providers Getting into the M-Commerce Act

[Moscow, RUSSIA] Leaping forward in merging the Internet with the cellular world, Moscow’s
dominant local mobile telephony operator Vimpelcom formally launched its
BeeOnline-Portal ( last week, adding new features such as
e-mail and a monthly charge.

Vimpelcom first vice president Nikolai
Pryanishnikov told a news conference that the “price wars” with Mobile
Telesystems, or MTS, were over and that competition would now revolve around
developing mobile Internet technologies.

“There will be no more radical decreases in tariffs,” he said – since they can’t go much
lower after falling by two times in the past year.

One new offer is the SMS location-based directory service: Subscribers type in a
metrostation and the service they seek – pharmacy, gas station, etc. – and contact
information for the nearest places pops up on the screen.

The Web site itself does not work on Netscape
and runs poorly on Macintosh computers, though this does not affect people
accessing information from their phones. The company said it is in the
process of adapting the portal so that it can be accessed not only through Microsoft
programs and Internet Explorer.

With about $1 million invested,
BeeOnline has actually been available to contract subscribers since June,
but until now the service was free and in an experimental phase; pre-paid
subscribers can log on by the year’s end, the company said.

Since the June
launch, BeeOnline registered 40,000 users, with just under half considered
regular daily users. Some analysts said that this number will dip noticeably
once the charge is implemented, perhaps down to 1,000 a day – just a sliver
of Vimpelcom’s subscriber base of about 800,000.

Tom Adshead, telecoms analyst at Troika Dialog, said the jury is still out on
whether the market wants this new product – that is, access to real information via a handset,
minus wireless application protocols, or WAP.

“Either it may take off or it may not,” Adshead said. “It’s a new product category… there’s real uncertainty.”

He said revenues would be minimal, $1 million a year at the most, but that the site
could help the company keep clients from wandering to the competition.

Braginsky, telecoms analyst at Renaissance Capital, also had misgivings
about the portal’s success, but said that its creation and expansion was a good
step for the cellular provider.

“If you create services and educate subscribers, sooner or later, you’ll be rewarded
for this,” Braginsky said.

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