Welcome to 'Google on your phone'

Earlier this month T-Mobile launched Web 'n' Walk in the UK. The service, which is already available in Germany and Austria, provides an improved Internet browsing experience from a small range of high-end mobile phones. Google is preset as the homepage on the phones. T-Mobile is targeting a Web'n' Walk subscriber base in 'six or maybe even seven' figures by end 2006.

To start with, let's be clear: this is not a first, either for the UK or even for T-Mobile. In February 2003, T-Mobile partnered with MSN to offer its subscribers Pocket MSN, a branded version of the MSN portal for mobile handsets running the Pocket PC operating system. Pocket MSN didn't get very far, its failure linked to that of the handset genre to which it was anchored.

But let's also be clear about this: things have moved on a lot since then. Web'n'Walk may not be a first, but we believe that it may herald a very important trend in mobile multimedia. The large operator groups now have relatively well-developed portal brands and business models, and the biggest of them are becoming more self-confident in their dealings with the big Internet portal brands.

There is, too, a growing realisation among mobile operators that they have two big advantages in their dealings with the Internet brands. One: the Internet players have a strong interest in working with, rather than bypassing, the mobile operators. It's their best hope of establishing a significant stream of end-user revenues, something they've largely failed to do on the Internet. Two: the Internet brands are in a fierce, cut-throat battle with each other, destroying any collective leverage they might otherwise be able to exert in dealing with the operators.

So mobile operators now have an opportunity to use the Internet brands as a way to drive awareness and usage of mobile data services. Google has massive brand recognition and a horde of regular users, many of whom have Google as their Internet homepage. 'Google on your phone' is a service proposition that is easy to understand and carries a great deal of immediate appeal.

Nor need this spell the end of the operator's own portal. For operators like T-Mobile and Vodafone, who retain a large percentage of the revenues from on-portal content, the clear possibility of a two-track customer proposition opens up. Track one: the operator portal, with a wide range of content and no end-user charging for browsing and downloads. Track two: the Internet, with all its familiar brands and facilities — but on this track, end users pay for their data traffic. (This strategy will be harder for the i-mode operators to implement. They only keep a small fraction of their on-portal content revenues, so they need to make money from the data traffic generated by both on-portal and off-portal usage.)

But there's not only opportunity here: there's danger too. If the mobile operators fail to reach a rapprochement with the Internet portals fairly soon, the latter will eventually cut their losses and go straight to the mobile subscriber. The danger for the operator is this: once your customer finds out how to activate their Internet browser, find Google and bookmark it, they need never see your portal again. More and more customers will discover this over the next couple of years.