Mobile app providers rethink industry image

Controversial industry

Gareth Ochse, newly appointed MD of Mira Networks, a mobile content aggregator (Mira provides connectivity and billing tools between content owners and mobile networks), admits his industry is a controversial one but also says it is working hard to regulate itself and to rid itself of its bad boy image.

"Consumers must remember that on the whole our industry strives to give them the content they desire at an affordable price and that we are actively working towards getting rid of misleading advertising around these services," Ochse says.

Ochse, who'll be a speaker at the Tech4Africa conference, 12 - 13 August 2010, in Johannesburg, is also founder of iSigned.com and is a director of DNA Economics.

Ochse says the self-regulating industry body, the Wireless Application Service Providers Association (WASPA), is attempting to ground the fly-by-nights and to put in place processes that protect consumers and industry members.

New additions to WASPA rules

WASPA recently announced new additions to its rules applying to wireless application service providers (WASPs) or providers of services such as bulk SMS messaging, ringtones, wallpapers, games, music etc. These include that subscribers to member services need to receive a SMS notification once their bill exceeds R200 a month and another message for every R200 after that. A welcome message and monthly reminder - which includes the name of the service, the cost, clear instructions for unsubscribing from the service and the service provider's telephone number - must also be sent out.

Of course, these rules only apply to current WASPA members. On closer inspection it's worth noting the number of fines left unpaid or suspended - a point industry critics often highlight when discussing WASPA's effectiveness. The forthcoming implementation of the Consumer Protection Act will add further consumer protection in late 2010.

Mira Networks, which is also a member of WASPA, and Ochse, support industry regulation and oversight. He says the organisation is effective in taking aim at misleading member advertising and that it has achieved some success against operators illegally 'auto-subscribing' consumers to a service. Mira itself is often a target for consumer anger as it hosts and processes payment for numerous third-party content providers, and the words Mira Networks is often the name consumers see on their cellular bills, which can lead to confusion.

Mira is currently active in Kenya, Ghana, Côte d'Ivoire, the DRC and Nigeria, and is experiencing rapid growth in these countries as well. Ochse describes it as the Wild West of mobile content, with companies pulling stunts they would never have tried in more mature or regulated markets.

Standards

In an effort to ensure compliance with standards, Mira doesn't accept clients in other African countries who are not also clients in SA. All clients need to be signed-up members of WASPA as well.

Apart from legal complexities, technical connections to local operators in some African countries are also problematic, with services like reverse billing often unsupported. Services in these countries tend to be text-intensive. Mobile money will be a key growth area in Africa and has already been rolled out successfully in a number of countries across the continent.

Ochse says the industry continues to experience rapid growth into all sectors of society, indicating the desire for content - especially for music.

iTunes isn't available in South Africa as yet - regional rights holders have been unable to come to an agreement with Apple, according to Ochse - but the service show how mobile can redefine an industry. Apple entered the music business to sell more of its technology goodies. The concept seems to have been adapted by Nokia, which offers buyers of certain handsets free and unlimited music downloads from its Nokia Music Store.

Location-based services

Location-based services will be a key growth area, Ochse predicts - Vodacom's mobile social network, The Grid with its more than one million members, is one example of such a service. It recently expanded with a multiplayer, location-based, role-playing game called Legends of Echo. Players trade, battle and communicate with others across the country. Their physical location is their starting point in the virtual world of the game.

Like just about everything else in the communication world, mobile content and services are moving towards two-way communication. For many South Africans with basic phone sets, the challenge to the industry will lie in creating a viable value proposition. Ochse believes his industry will surprise the cynics through continued innovation and industry and consumer engagement. Ultimately, it wants to offer investors and marketers a sustainable and respectable industry free from the controversy it currently courts with such frequency.