Mobile technology is one of the fastest growing areas of the industry, as businesses look to create a more flexible workforce.

For a long time, mobile computing has been a frustrating experience, with slow download speeds and confusing tariffs. But new wireless technologies such as 3G and WiFi are starting to make mobility a serious proposition for IT directors.

Computing talked exclusively to O2 UK chief executive Matthew Key about the challenges of mobile IT.

Q: Mobile phone companies have struggled to replicate the success of voice calls in the data market. What do you need to do to better support the needs of business IT?

The mobile industry is still relatively young, only 20 to 25 years old, and has been through huge changes in that period. But the industry hasn’t done enough to focus on customers needs. We have to get the customer at the heart of everything, Are we there? Do we do it every time? No, not yet. But are we going to get there? Yes, we are on a path to give customers what they want. I can absolutely understand that people would look at the mobile industry in the past and think it’s a bit of a pain – because coverage doesn’t work, or my phone doesn’t work in the US, or the roaming tariff is too high, or whatever. We are on a journey.

Q: Where should IT directors start in developing a mobile IT strategy?

People are starting to look at mobile as an investment rather than an overhead. That means you start to look at productivity gains, rather than how much has been spent on calls this month. There are more and more examples of companies using mobile to drive productivity benefits.

The first point is to understand your business model and how mobile can help you to improve productivity. What is best practice and who can you talk to to find out? A trial helps to make sure that best practice works, and that the IT team understands the potential for how to run the business more efficiently and effectively.

Q: Can you give any examples of firms that are doing this?

Balfour Beatty is an interesting example. It has lots of work going on around the UK on different construction sites, and keeping control of that is pretty tough. Safety officers have to go round sites making sure the right things are being done, and fill out audit questionnaires for a site. They now have a bit of software on an XDA handheld computer, and the internal auditors go to the field site, fill in the questionnaire on the XDA, which is transmitted directly back to head office via a clever bit of software that gives immediate analysis of what is going on at different sites. It reduces the amount of time people have to spend on site, speeds up information back to head office about what is going on, and if they see something significant they can take a picture with the XDA and transmit it back to the office. That makes control easier for head office, and they can look at each site and see if there are common themes. That is an example of the power of mobile technology to improve productivity.

Another example shows how mobile can change a business model, not just operate within an existing model. Trafficmaster and Norwich Union are piloting a pay-as-you-drive insurance scheme. We know where Sim cards are moving on the network and how fast they are going, in terms of moving between cells. It is a pilot scheme at the moment, but putting a Sim card in cars to know where and when people travel is a really powerful use of location-based services, which has been talked about for a long time but hasn’t really started to be exploited with customers. That is about combining the power of mobile with knowledge of what that business wants to do.

West Yorkshire Police are using Blackberry handheld devices, heavily encrypted and password protected, but with direct access to the Police National Computer from the street. The productivity of the police on the beat is increased significantly because they don’t have to keep phoning up or going back to the office. And it gives police real-time information in the field.

Q: 3G has so far been a disappointment for many businesses, with complaints of poor coverage and high costs. Will 3G ever live up to its promises?

It’s no secret that the mobile industry as well as everyone else has been a bit disappointed with this much-heralded 3G. It has been around for long enough now to see a pattern of how people use it and when they use it, and if it really brings true customer benefits. Until it brings true benefits, people won’t use it.

If people can buy solutions, they are more likely to use the technology. If we can put a service over 3G instead of GPRS, the customer’s experience will be a bit better. Should the customer have to pay a premium for that? They are buying the same solution, so no. Until we bring real customer solutions that make a real difference with 3G, the development of the market will still be slow.
The faster speeds from using HSDPA technology will make a difference, but there are two or three things that need to be in place before it really starts to penetrate the market. Devices is a key one – 3G devices are getting to the point where they are comparable in cost, form factor and battery life to 2G/2.5G devices. But they are not to the mass-market point yet, although they probably will be in 12 to 18 months. The second thing is the quality of the network and the technology. We are all still building out or developing the quality of the technology. It is getting there, and a lot of users won’t notice the difference. But we’re still not happy with it. The difference is starting to be quite small between 3G and 2.5G, but we are still investing in the quality of the customer experience. The technology is still maturing.
Until those factors work together, driving mass-market penetration is very difficult. We will get there, but it will take another 18 months to two years before we start to see mass adoption.

Q: Do you expect to meet Ofcom’s target of 80 per cent of the population with 3G coverage by the end of 2007?

It is not just geographical coverage, it is quality where you have the coverage. We are over 50 per cent coverage, and we are building the network to customer demand.

We have done in-depth analysis of where people are going to use 3G, and it is classically on train lines, bus routes, motorway service stations, offices, conurbations, and that is where we are focusing our build and investment.

There is a balance to be had between missing 80 per cent and building to demand. Where we have built, we are now going back and improving quality as well, and we are expanding geographic coverage.

We will have discussions with Ofcom about what it really means by that 80 per cent, because there is a big quality push in there as well.

To build 80 per cent coverage for the sake of it is not a sensible commercial or investment decision from the customer’s perspective.

Q: Given the problems with 3G, will users just opt for other wireless services such as WiFi or WiMax instead?

A lot of these technologies are still relatively immature. I think it will end up being a patchwork quilt of different technologies. It will be the right technology at the right place at the right time that wins. Customers aren’t interested if it is WiFi, WiMax, 3G, 2.5G or whatever. They are interested in the customer experience, in terms of product, quality, price, and so on. Until they get the right mix of those elements, they will not be interested in buying 3G or WiFi or whatever, they are interested in their experience and the real use.

If you can see real benefits in investing in 3G now, then invest, That technology will mature and continue to improve the use it can have in business. If it’s right for your business, invest. If you can’t see a proposition that brings productivity benefits, then wait for the next iteration. It has to be a business by business decision.

The boundaries of mobile are becoming very blurred now. In a couple of years’ time I have no doubt a lot of in-building services will be delivered by WiFi over broadband. Voice over IP over broadband is going to happen. We can’t bury our head in the sand and hope it isn’t going to affect us, so we are embracing it and trying to use all the different technologies.

Will we be a pure mobile company in three years’ time? Absolutely not.

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