DIFFUSION OF THE MOBILE COMMERCE:

ANALYSIS OF THE ITALIAN SITUATION

A study submitted in partial fulfilment

of the requirements for the degree of
Master of Arts in Multilingual
Information Management

at

THE UNIVERSITY OF SHEFFIELD

by

ROBERTO LECCA

September 2007
 Abstract

This study aims at analysing the general status of the Mobile Commerce evolution in
Italy and provides a background for further studies on this topic.

TLC companies have been almost ‘obliged’ to direct their attention towards Mobile
Commerce services, because in many social contexts they have already exploited
effectively the voice telephony market. This shift has encountered both extreme and
rapid appreciation in some Asian markets, Japan and South Korea above all.
Their successful experience has therefore represented a peculiar driving force to all
the other mobile telephony companies, pushed by the need to generate new sources of
competitive advantage.
Nevertheless, so far this effort has not produced the same positive outcomes achieved
within the major Asian contexts.
Italy surely represents an ideal setting for the implementation of m-Commerce
policies, mostly due to the very high level of penetration of mobile telephones and the
attitude of its population towards innovations. However, although being introduced
by one of the most important ICT firms a couple of years ago, m-Commerce has not
breached into the Italian society yet.

In order to obtain relevant results and significant answers to these issues, this study
has been developed following both qualitative and quantitative patterns. A case study
covering the best example of Mobile Commerce success was selected and examined
in deep. Additionally, an online survey was formulated and sent out.
Finally, reviewing part of the literature available has constituted a fundamental step to
form a solid background to put this analysis through.

Overall, the research project has tried to cover the most influent aspects regarding the
development of the Mobile Commerce and contributed to explore such a phenomenon

ii
from a critical point of view, trying to provide significant recommendations for
further investigation.

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 Acknowledgments

First of all, special thanks to my supervisor Dr. Angela Lin, for her patience and
guidance throughout the whole dissertation preparation period.

Secondly, thanks to all the people who contributed to the research project, particularly
those ones who spent part of their time completing the online survey, which has been
fundamental in order to reach the goals established. Among these people, I would
also like to thank Mr. Bryce Winkelman of Qualtrics for his scrupulous aid and
understanding.

Last but not least, a very special thanks goes to my family, which gave me the
possibility to do a master course and supported me in all possible ways during this
fantastic experience.

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 Table of Contents

1. INTRODUCTION ...............................................................................................................................4

1.1. RESEARCH AIMS AND OBJECTIVES ................................................................................................6

1.2. ORGANISATION OF THE DISSERTATION..........................................................................................8
2. LITERATURE REVIEW .................................................................................................................10

2.1. LITERATURE OVERVIEW ..............................................................................................................10

2.2. LITERATURE REVIEW: THEORETICAL BACKGROUND ...................................................................12
3. THE MOBILE PHONE IN THE MODERN SOCIETY................................................................15

3.1. THE EVOLUTION OF THE MOBILE PHONE AND ITS IMPACT ON THE SOCIETY .................................16
3.1.1. The mobile phone as a tool that enhances security and safety ..............................................17
3.1.2. Unadvised use of the mobile phone and reduction of safety..................................................19
3.1.3. The connection between mobile phone and public place utilisation .....................................19
3.1.4. The mobile phone and the maintenance of relationships ......................................................20
3.1.5. The role of the mobile phone within non-verbal communication ..........................................21
3.2. THE DIFFUSION OF SMS..............................................................................................................22
3.3. THE MOBILE PHONE DOMESTICATION WITHIN THE ITALIAN YOUTH SOCIETY ..............................24
3.4. THE ‘BEEPING’ PHENOMENON: NOT ONLY AN ITALIAN PRACTICE ...............................................27
4. THE MOBILE COMMERCE..........................................................................................................29

4.1. THE CONCEPT OF MOBILE COMMERCE........................................................................................30

4.1.1. Differences and analogies between e-Commerce and m-Commerce ....................................32
4.2. OVERVIEW OF THE M-COMMERCE BUSINESS MODELS .................................................................33
4.2.1. User fee business models.......................................................................................................34
4.2.2. Shopping business models .....................................................................................................34
4.2.3. Marketing business models ...................................................................................................34
4.2.4. Improved efficiency business models.....................................................................................35
4.2.5. Advertising business models..................................................................................................35
4.2.6. Revenue-sharing business models .........................................................................................36
4.3. CASE STUDY: NTT DOCOMO’S I-MODE SUCCESS ......................................................................36
4.3.1. The Japanese background at the end of the millennium and the contextual factors that
enabled NTT DoCoMo’s i-Mode service to stand out on the market...................................................37
4.3.2. The launch of NTT DoCoMo’s i-Mode: analysis of an innovative business model...............40
4.3.3. Conclusions ...........................................................................................................................45
4.4. OTHER SUCCESSFUL EXAMPLES OF M-COMMERCE IMPLEMENTATION AND THE SITUATION
IN THE MOST IMPORTANT AREAS OF THE WORLD .......................................................................................46
4.4.1. Mobile providers offering m-Commerce services in Italy .....................................................49
4.4.2. Mobile Commerce and the issues concerning security and privacy......................................52
4.5. OVERVIEW OF THE ITALIAN SITUATION.......................................................................................53
5. METHODOLOGY ............................................................................................................................57

5.1. OVERVIEW ..................................................................................................................................57

5.1.1. Rationale behind the choice of the research method.............................................................57
5.2. OVERVIEW OF THE CASE STUDY ..................................................................................................59
5.2.1. Resources employed for the case study .................................................................................59
5.3. OVERVIEW OF THE ONLINE SURVEY ............................................................................................60
5.3.1. Survey tool employed.............................................................................................................60
5.3.2. Ethical issues.........................................................................................................................60
5.3.3. Sample ...................................................................................................................................60
 5.3.4. Composition of the survey .....................................................................................................61
5.3.5. Delivery of the survey............................................................................................................62
6. SURVEY OUTCOME: EVALUATION OF THE RESULTS.......................................................63

6.1. SURVEY STATISTICS ....................................................................................................................63

6.2. DISCUSSION OF THE RESULTS ......................................................................................................63
6.2.1. Demographics .......................................................................................................................63
6.2.2. First part: broadband and e-Commerce ...............................................................................65
6.2.3. Second part: the role of the mobile phone.............................................................................67
6.2.4. Third part: the diffusion of the m-Commerce ........................................................................73
7. DISCUSSION.....................................................................................................................................85

8. CONCLUSIONS................................................................................................................................89

BIBLIOGRAPHY .......................................................................................................................................92

APPENDIX A: ORIGINAL VERSION OF THE SURVEY .................................................................101

APPENDIX B: TRANSLATED VERSION OF THE SURVEY...........................................................113

APPENDIX C: INTRODUCTION TO THE SURVEY.........................................................................119

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 List of Tables

TABLE 1 DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS (N=125).........................................64

TABLE 2 SQ22: IF YOU HAVE NEVER PURCHASED ANY GOODS OR SERVICES VIA YOUR MOBILE PHONE,
WHICH OF THE FOLLOWING SERVICES WOULD YOU INTEND USING?.............................................80

TABLE 3 SQ23: PLEASE STATE, IN ORDER OF PREFERENCE, THE MEDIUM BY WHICH YOU WOULD
PREFER TO RECEIVE INFORMATION ABOUT MOBILE COMMERCE AND MOBILE SERVICES .............81
TABLE 4 SQ24: PLEASE INDICATE THE IMPORTANCE OF THE FOLLOWING FACTORS IN USING A
PARTICULAR M-COMMERCE SERVICE ..........................................................................................81

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 1. Introduction

We may say that mobile phones have by now conquered almost any society in
the whole world, particularly those contexts that belong to the most developed
countries. However, also thanks to the poor level of fixed infrastructure in their
territories, many of the so called ‘underdeveloped’ countries are already playing
a surprising role in the evolutionary process of such a phenomenon, concerning
the exploitation of both B2B and B2C mobile services (Muthigani, 2007; Rice,
2007; Vodafone, 2005; Wangui, 2005).
One of the foremost conditions for the establishment of the m-Commerce has
been, especially in the Western countries, the deep penetration of wireless
devices. Among that type of devices, the principal role is surely played by the
mobile phone.
In the EU-25, two countries have reached unexpected results, going beyond the
100% for what regards mobile phone penetration: in 2003, the best outcome
belonged to Luxembourg, which registered nearly 110% of mobile phone
subscriptions. Italy placed second with around 101.8%, and a constant pace of
growth that will possibly lead to the first position in the forthcoming future
(Bueti and Obiso, 2005).
Outside the EU, the trends for 2006 foresaw a penetration ratio of 74% for the
USA, while Japan (95%), South Korea (94%) and China (93%) symbolised the
huge potential of the Asian market (Ipsos Insight, 2006). Finally, Africa
constitutes a context where mobile phone users are growing rapidly: in 2004 it
accounted for 50 million mobile subscribers (7% of the population), while it is
expected to reach over 160 million users by the end of 2009, with a pace of 35%
per year (Batchelor et al., 2004).
Therefore, it can be argued that the mobile phone has literally conquered its
relevance in the new millennium society, constituting an essential tool that has

4
 been by now incorporated in our everyday life so to affect our personal
dimension.
Mobile phones’ extreme spreading has evidently generated a huge business,
mainly based on voice and SMS traffic. Nevertheless, the partial saturation of the
market in relation to those two particular features of mobile telephony has
pushed TLC companies to look for further areas of exploitation, creating new
products and services that would meet the needs of their costumers. Japan can be
considered the pacemaker in this field: in 1999 NTT DoCoMo, the most
important mobile provider launched i-Mode service, reaching in a short time an
impressive number of subscriptions and in fact projecting the Japanese society
towards the new mobile era. In 2007, it still represents the most successful model
of m-Commerce service.
Moreover, i-Mode introduction has given boost to the other telephony
enterprises, whose aim has been to emulate the Japanese performance in the
most profitable markets of the world.

Going back to the data that have been discussed at the beginning, many represent
examples of countries in which the Mobile Commerce would find an ideal
ground for its growth, thanks to the massive presence of mobile phones and the
high standards of innovation. Among them, Italy is certainly one of the most
profitable socio-economic contexts in terms of new mobile services exploitation.
However, although being introduced with great expectations in 2003 by the
provider H3G 1 , the popularity of m-Commerce in Italy can be still considered at
an embryonic stage.
In fact, the mobile phone still appears far from being deemed as a tool that goes
beyond the communicative scope, remaining still anchored to its original
conception.

1
H3G was later followed by the other 3 major mobile providers, Vodafone, TIM and Wind.
However, H3G has been the only one to provide m-Commerce services based exclusively on UMTS
technology.

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1.1. Research aims and objectives

Following the conceptual background highlighted before, the main aim of this
research has been to understand the reasons why the mobile commerce is
struggling to make an opening in the Italian society. But that is not all. In fact, it
would be relevant to know how the use of the mobile phone is conceived among
the Italian youth population. The reasons behind the selection of such a peculiar
target will be explained later on.
Also, determining at what extent Mobile Commerce awareness is present within
that share of the Italian population will be interesting, together with its possible
relationship with the diffusion of the broadband and the internet, and the
presence of any electronic commerce (e-Commerce) culture.
This study would help to draw a scenario useful for the future development of
this kind of technology.

More precisely, for what regards the spreading of the mobile phone within the
Italian territory and its usage among the Italian youth generation, this study aims
at finding an answer to the following questions:

i. How is the mobile phone conceived within the Italian youth

society?

ii. What are the most popular features connected to the usage of
mobile phones within the Italian youth society?

iii. What is the mobile phone potential in the Italian market?

Concerning the popularity of the Internet and the well known practice of making
transactions online (e-Commerce), these are the interrogatives that this
investigation will try to answer to:

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 iv. To what extent the Internet can be associated to the use of mobile
phones?

v. How deep is the utilization of the internet among the Italian

society?

vi. How frequently do they use the Internet to make purchases

(Electronic Commerce)?

The last part of the research project will focus on Italian mobile phone users’
current knowledge regarding the Mobile Commerce potential, together with the
most outstanding factors that drive (or would drive) their choice towards the
embracement of such a new frontier of mobile telephony:

vii. Is there a Mobile Commerce awareness/culture in Italy?

viii. Do youth Italians perceive any benefits/improvements in their life

from the exploitation of Mobile Commerce?

ix. What are the major factors taken into account by Italian users in
relation to the m-Commerce utilization?

x. What are their needs and potential interests in terms of

exploitable services through the use of mobile phone?

This final set of questions (and especially the last two ones) is particularly
interesting from a marketing point of view. In fact, the answers to those queries
would be very useful to understand how mobile commerce appeals the Italian
mobile phone users, highlighting both those elements that still constraint its
evolution and the major elements that they take into consideration for its
acceptance.

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1.2. Organisation of the dissertation

The organisation of this report reflects the conceptual framework underlined in

the initial part of this chapter, with a descriptive process that moves from a more
general point of view, studying the role of the mobile phone within the modern
society, to the m-Commerce as a phenomenon, which is expected to contribute to
the announced shift towards a ‘ubiquitous society’ based on the concept of
convergence of mobile and fixed telecommunication services (Alleman and
Rappoport, 2007; Bueti and Obiso, 2005; EC, 2006; Feldmann, 2003).
After a chapter dedicated to a brief literature review of the most relevant sources,
the analysis focuses on how the mobile phone has penetrated the modern society
and which part of the population represents its heavy users. As expressed before,
a special emphasis will be given to the Italian social context.

The fourth section goes straight to the foremost issue of this topic: the Mobile
Commerce.
After giving a definition of such a particular innovation, the report will discuss
the relationship lying between m-Commerce and e-Commerce.
Subsequently, after a review of the most common business models, the
discussion will shift to the close examination of the most successful case of m-
Commerce service implementation: NTT DoCoMo’s i-Mode.
The analysis will explore how that change has been domesticated by the
Japanese society, how it shaped it, how it fitted into the technological pattern
featuring the country and enabling it to become the most advanced nation in the
TLC circle with many years of anticipation in comparison to the many other
advanced countries. In relation to this, further cases of m-Commerce model
implementation will be presented.
The chapter ends with an overview of the Italian situation, trying to understand
what elements define the Italian TLC market and why it can be still considered at
an embryonic stage. Valid examples concerning this issue will be provided.

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The fifth part is entirely dedicated to the presentation of the research
methodology.
The choices regarding the various methods selected to carry out the research
project will be reviewed. Within this section, the survey definitely occupies a
core position because it reflects the direct opinion of the Italian mobile phone
users.
However, as it will be underlined many times during the discussion, the sample
chosen does not represent the whole segment of the Italian users; therefore its
outcome must be retained cautiously, as it does not have any statistical value.
A brief note regarding the choice of the online survey tool chosen for this task
will be included.
Consequently, the sixth section of the dissertation centres on the interpretation of
the results obtained through the online survey, which will be graphically
displayed.

The seventh chapter, instead, embodies a discussion concerning the data

analysis, which will be compared to the findings and considerations made in the
previous parts of the dissertation pattern.

Ultimately, the last chapter concentrates on a quick review of the core features
and findings obtained by the research procedure. It will also involve suggestions
for further research, along with final recommendations useful for the further
expansion of the Italian TLC context.

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 2. Literature review

As it has been observed in the previous chapter, the literature available has
resulted necessary in order to build up a well-grounded background concerning
the many issues dealt with during the research task. Considering the high level of
complexity of the topic chosen, many types of sources have been taken into
account.

2.1. Literature overview

Books have been the principal source of information. Beyond a doubt, they
represent the most appropriate channel from where to get the necessary
knowledge to manage sufficiently the topic in question.
Unfortunately, due to the short evolutionary path of the mobile commerce, it has
not been simple to retrieve a large number of books dealing with such a
technological phenomenon.
Nevertheless, a few sources that deal in a very comprehensive way with the core
topics of the research are:

• R. Ling’s Mobile Connection – The Cell Phone’s Impact on Society

• N. Sadeh’s M-Commerce – Technologies, Services and Business Models
• M. Ito, D. Okabe and M. Matsuda’s Personal, Portable, Pedestrian –
Mobile Phones in Japanese Life
• G. Elliott and N. Phillips’ Mobile Commerce and Wireless Computing
Systems
• E. Rogers’ Diffusion of Innovations

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Apart from books then, a concrete contribution has been given by:

• Official reports from world and national telecommunication/IT

organisations (e.g. ITU, AITech-Assinform, WapForum, DVB, PCIC),
world economic/financial committees (e.g. CPSS), political and
economic institutions (e.g. EU and EU Commission, OECD), national
statistics committees and marketing consultancies (e.g. Abacus, Censis,
Ipsos Insight), political organisms (e.g. Japanese Ministry of Internal
Affairs and Communications (MIC) and finally important magazines
(e.g. The Economist). Such reports have provided updated statistical data
and information with respect to both general and specific trends affecting
different types of technological innovation. The details extracted from
those documents have been also efficacious in order to draw a
comparison between the situations of the most developed countries in the
world scene.

• Previous research papers published by various reviews, in particular by

the journal New Media and Society. This review, signalled by Dr. Angela
Lin during the first phase of the dissertation preparation, resulted
prominently rich of research content focusing on mobile phones, mostly
considering the sociological implications of its adoption.
Also, relevant documents have been retrieved from The Journal of the
Communications Network, The Journal of the Electronic Commerce
Research, Computing and Electronic Markets.

• Articles extracted both from paper-written and online magazines (e.g.

The Economist), online newspapers (e.g. Financial Times, Il Corriere
della Sera, USA Today, The Guardian) and a large number of online
websites. This last set of resources has been fundamental in order to
obtain updated and global information about the mobile phenomenon.

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2.2. Literature review: theoretical background

The diffusion of mobile phone has had unpredicted implications since the early
stages of its evolution (Feldmann, 2003; Wei and Lo, 2006). However, in the
first years of its introduction, it faced a very slow diffusion rate, mostly due to its
high costs (Campbell, 2007). Therefore, it was strongly considered a technology
tool directed to the business area usage; on the top of that, usage of mobile
phones by businessmen had initially a vulgar acceptation (Feldmann, 2003;
Fortunati, 2005a; Ling, 2003, cited in Fortunati, 2005a; Rogers, 1995).
Subsequently, from the early 1990s, contemporaneously with the decrease of
handset prices and general service cost, mobile phones selling registered a
sudden increment. The advent of the GSM technology also accelerated the
process, with features that included the support for roaming and SMS texting
(Ling, 2004; Sadeh, 2002). The worldwide youngest population has proved to
constitute a base of mobile phone heavy users (Businessonline.it, 2006;
Entrepreneur.com, 2006(?); Ito et al., 2005). Ling (2004) studied the diffusion of
mobile phones in Norway, and found out that “by 2001… approximately 90% of
the teens interviewed in a representative national sample owned a mobile
telephone” (p.84). Interestingly, Ling (2004) noticed the popularity of text
messages within the sample analysed, fact that was accompanied by the adoption
of a peculiar but (in the majority of the occasions) simple written language. This
aspect is also strictly connected to the concepts of “personalisation”,
“individualisation” and “construction of identity” discussed by Fortunati (2005a)
and by Katz and Sugiyama (2006). To reinforce this last concept, Fortunati
(2002 and 2005a and 2005b) highlights the mobile phone as a symbol of fashion,
especially among the Italian users, a powerful feature for communicating one’s
personal identity. Fashion is also identified by Leung and Wei (2000, cited in
Wei and Lo, 2006). In their study regarding students from the US and Japan,
Katz and Sugiyama (2006) found out a directly proportional relationship
between attention to fashion and mobile phone usage. Those findings confirm

12
the conclusions obtained from the studies concerning students from Korea,
Norway and Namibia (Katz and Sugiyama, 2006).
When in Europe the 2G telephony standard was still in its process of expansion,
in Japan the major telephony provider launched the service that would
revolutionise the TLC sector: it was 1999, and NTT DoCoMo challenged the
mobile telephony market with the i-Mode service (Elliott and Phillips, 2004; Ito
et al., 2005; Ling, 2004; Sadeh, 2002). This new model aimed at satisfying
Japanese mobile phone users’ needs, shaped by the raising ‘mobility’.
Contemporaneously, with i-Mode NTT DoCoMo conceived a new service with
whom they intended to gain competitive advantage from a sphere other than
voice telephony market, now almost completely saturated.
Therefore, Japan opened the way to the Mobile Commerce, yet standing as the
best example within this telecommunications area (Sadeh, 2002).
Nowadays, although the situation in the rest of the world appears still pretty far
from the results gained in Asia and mobile commerce’s adoption pace is still
slow, the current premises adumbrate an effective spread of 3G services and
mobile commerce in the forthcoming years (Bradbury, 2006; OECD, 2007;
PassioneMobile, 2006). The level of mobile phones penetration in many
countries (both developed and least-developed ones), the level of mobile
infrastructure and the policies adopted by national governments and continental
institutions that point to ‘convergence’, ‘ubiquity’ and the reduction of the so
called ‘digital divide’ portend the intention to follow the footsteps traced by the
Japanese culture. However, the evolution of m-Commerce is still at its first
stage, due to various reasons (Feldmann, 2003; i-dome.com, 2001; OECD,
2007).
Although being the second nation in EU for mobile phones penetration with one
of the highest indexes in the world and being one of the leaders in 3G network
coverage, Italy is one of those many countries that still struggle in terms of 3G
telephony adoption, mostly because of the services’ high costs (OECD, 2007).
Nonetheless, cost is not the only factor that thwarts the proliferation of the new

13
mobile standardisation within the Italian society: further limiting causes will be
analysed and spotted later on throughout this report.

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 3. The mobile phone in the modern society

Among all the mobile devices available today in the global TLC market, the
mobile phone surely plays the role of the main character, having conquered a
great number of countries regardless of the age of the users. Ling (2004) defines
it as “a taken-for-granted part of the social landscape in many countries” (p.21).
Its success is due to many factors, depending on the situation of every single
socio-economic context in which it has been adopted (Feldmann, 2003). But, as
a general consideration, we might say that one of the major reasons for its
enormous popularity is its striking ease of use. This characteristic enables
anyone to employ it, regardless of any particular knowledge (Ling, 2004).

According to the report “Mobile overtakes fixed: implications for policy and
regulation” published by the International Telecommunication Union (ITU), in
2002 the world assisted to the phase of a process that represented an authentic
milestone in the sphere of telecommunications: the number of mobile subscribers
outpaced the number of fixed lines, reaching a quantity of subscriptions that
went beyond 1200 million units (Feldmann, 2003). Surprisingly, this
phenomenon comprised both ‘developed’ and the so called ‘least developed
countries’, but was evidently forced by diverse drivers. However, this upshot
demonstrates how developing countries constitute markets with great potential
and thus ideal scenarios for future investments in TLC technology and services.
In Africa, for example, mobile companies registered a strong demand for mobile
voice services mostly due to the growing need of the populations living in the
rural areas of the continent to keep in touch more comfortably with the
respective families. Moreover, this was also a direct effect of the improving
general economic condition within many African societies and the widespread
aim of reducing personal risks. Such an increasing demand brought unexpectedly
the percentage of subscribers from 3% in 2001 up to 7% in 2004, reaching a
number of 50 million users (Batchelor et al., 2004; Feldmann, 2003). As shown

15
in the right part of figure 1, the African continent is going at an impressive and
constant pace of growth in terms of mobile phone subscribers. That datum is
even more astonishing if compared to the world growth average, sign of the great
rapidity with which Africa is coping with the technological (and economical)
‘divide’ in comparison with the most advanced areas of the world. Particularly
interesting is the percentage relative to Asia, another geographical context that
has exploited only a small part of its immense potential so far. Its high number of
inhabitants makes Asia one of the most appealing catchment areas of the world.
This view is supported by an NTT DoCoMo’s recent declaration, in which they
announce their intention of investing part of the company’s resources in that
market (Turner, 2006).

Figure 1 Mobile phones outpacing fixed lines and annual growth rate

Source: ITU World Telecommunication Development Report, 2003.

3.1. The evolution of the mobile phone and its impact on

the society

According to the figure 1, then, the mobile phone is quickly pushing off the fixed
line connection; this trend leads to the conclusion that, in the next future, mobile
phones will probably replace completely the fixed line as the principal

16
communications medium (Feldmann, 2003). As it has been mentioned before,
that is what is already happening in the African continent at the moment.
Before its spread among the majority of the world populations, the mobile phone
connoted a tool ‘designed’ just for very few ones. In fact, due to its huge cost
and the high prices of the services provided, the ones who could employ such an
expensive innovation were almost only wealthy people (Feldmann, 2003; Ling,
2004; Rogers, 1995; Srivastava, 2004).
As already stated in the paragraph 2.2, Fortunati (2005a) talks about this aspect
and reports the common reputation regarding the “higher classes” as “bearers of
vulgarity” (p.41). Later, with the prompt decrease of handset prices, services cost
and the introduction of prepaid services (Feldmann, 2003, Ling, 2004), the
mobile phone has become a technology tool popular within the masses, with the
consequent shift regarding its consideration. It passed from being reckoned as an
object symbolising “status”, to the idea of a “trendy and fashionable object”
(Fortunati, 2005a:41; Katz and Sugiyama, 2006). Ito et al. (2005) identify the
very same pattern in the penetration of the mobile phone within the Japanese
society.

3.1.1. The mobile phone as a tool that enhances security

and safety

Its common reputation is not the only one generated by the astounding popularity
of the mobile phone. As yet, a sufficient number of research studies have been
carried out with the aim of understanding better the role of the mobile phone
within the sphere of modern communication. And in that direction, the results
obtained by Ling appear extremely valuable. Talking about the mobile phone, he
asserts that “…one of the most common popular images is that it provides us
with a form of security…and safety” (Ling, 2004:35). Following this statement
and focusing on the results obtained from investigations conducted in Norway,
Ling underlines how the mobile phone is seen as the most efficacious device for

17
maintaining a high degree of security and safety. However, he points out that
granting a complete level of security and safety seems a pure utopia, since the
mobile phone is prone to technical limitations (such as battery power and
network coverage). Therefore, as those boundaries restrain from the total
attainment of such a goal, the mobile phone “[it] is not something on which we
can rely absolutely” (Ling, 2004:46).
Enhancing security is also the most important adoption factor within the young
people. In fact, parents are said to have found in the mobile phone a very
effective tool in order to increase their control over their children. Ito et al.
(2005), referring about Japanese young students’ use of keitai 2 , highlights their
parents’ common relief when their children carry a mobile phone with them, as it
enables contact at any time of the day. However, as Humphreys (2005) remarks,
children put in practice downright strategies to get around their parent’s
‘intrusion’: screening the incoming calls or switching the device off are just two
of the most popular tricks to avoid bothers. The introduction of the caller-ID
function has definitely enabled the process of screening, giving more power to
the recipient (Humphreys, 2005).
Apart from the matters concerning security, parents see the owning of a mobile
phone also as an efficient method with whom their children can learn how to
manage money. This factor was largely favoured by the introduction of prepaid
services, extremely popular among teens. Moreover, taking up their
responsibilities is also a feature highly connected to the personal growth of the
individual (hence of his personality) (Ling, 2004).

2
Keitai is the Japanese word for mobile telephone

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 3.1.2. Unadvised use of the mobile phone and reduction of
safety

Yet, talking about mobile phones and security/safety, it is relevant to underline

how its utilisation often coincides with situations of danger (hence reducing the
level of security/safety). The incorrect use of the mobile phone is often identified
with the causes of car accidents (Fortunati, 2002). This factor is evidently in
contradiction with the awareness stressed in the findings obtained by Ling. The
first example is given by a statistical datum reflecting one aspect of mobile
phones use in the US: nearly 27% of mobile phone calls in the USA are made
from vehicles on the move (Entrepreneur.com, 2006?). Such a percentage
illustrates the costume diffused among mobile phone users that contrasts with the
rules imposed by both social morality and legal environment. This proportion is
dramatically confirmed in a study conducted by Redelmeier and Tibshirani
(1997, cited in Ling, 2004), in which they analysed the situation preceding 742
cases of car accident. They obtained that 24% of the drivers were using a mobile
phone at least ten minutes prior to the accident, testifying how a more careful
utilisation of mobile communication tools might reduce the occurrence of
dangerous situations.
Again, that percentage of ‘careless users’ is reflected in a survey made by The
University of Michigan. Such study showed that the 80% of American mobile
phone users consider using a mobile phone while driving a great risk for safety
(Usatoday, 2005), hence denoting awareness of the risks connected to an
improper usage of mobile devices while on vehicles.

3.1.3. The connection between mobile phone and public

place utilisation

Within the field of social morality, a further aspect has been at the core of many
studies: the use of mobile telephones in public places. Concerning this issue,

19
Humphreys (2005) correctly states that “cellphone users tend to be less aware of
their surroundings” (p.830), underlining an opinion that is highly shared
nowadays. In addition to this, Ling (2004) asserts that “[The] use of the mobile
phone can be seen as an affront to the decorum of a situation” (p. 128). This
means that although there might be room for the utilisation of a mobile phone in
a public context, such practice is always strictly subject to the rules proper to the
setting in which the interaction is taking place.
With relation to these conclusions, it is interesting to observe what happened in
Japan, where the irregardless use of mobile phones brought the public transit
facilities to ban it during the rush hours (Ito et al., 2005). The disrespectful use
of keitai was associated to young people, in many cases careless of the social
rules (and sometimes even of the legal regulations) proper to the Japanese
community.

3.1.4. The mobile phone and the maintenance of

relationships

Looking at the verbal communication from another point of view, many

researchers have found confirmations regarding the mobile phone’s widespread
use as a tool which increases communication with families and friends (Sofi,
2006). As stated at the beginning of this chapter, that is the case of the
populations living in the rural areas of Africa. The lack of a proper fixed
infrastructure enhanced the diffusion of mobile phones, with the people pushed
towards such a tool by a constant and swelling need of preserving the
relationship with their emotional ties. In this connection, Wei and Lo (2006)
study regarding a sample of Taiwanese students confirms how frequent is for
mobile phone users to make calls to their families and, in general, people they
care of. Their results showed women to be much keener on such practice than
men. Curiously, they also found out that lonely people normally use the mobile

20
phone not to improve the level of their relationships, but “for its symbolic value
– fashion and status” (Wei and Lo, 2006:66).

3.1.5. The role of the mobile phone within non-verbal

communication

A further aspect of verbal communication via a mobile telephone is pointed out

by Ling. He states that such instrument improves the coordination of our
activities and, again, women appear to be the gender that benefits more of that
implication (Ling, 2004).
But there is another side of communication in which the mobile phone plays a
leading role. In fact, coming back again to Fortunati (2005a and 2005b) and her
fascinating parallel between two key conceptions linked to the mobile phone’s
idealization, individualisation and fashion, it is extremely interesting to note how
such a technological instrument embraces the sphere of communication tout
court: in fact, apart from conveying verbal communication (which is its main
purpose), the mobile phone, as it happens with fashion, is also “a powerful
vehicle in the construction of identity” (Davis, 1992, cited in Fortunati,
2005a:39), thus entering the domain of non-verbal communication. To support
the concept of “construction of identity” underlined by the Italian researcher, it is
sufficient to exemplify how youth people (as anticipated in the previous
chapters, heavy users of mobile phones) usually personalise their own devices
with featured attributes like ringtones, covers, logos, screensavers etc. As a
matter of fact, that practice is nothing but a way to express one’s self identity,
‘communicating’ it to the other people through the mobile phone.
This aspect, exactly like fashion, is among teens a feature that often determines
the inclusion/exclusion from a particular community (Ling, 2004).
These findings are also confirmed by the investigation conducted by Katz and
Sugiyama (2006) on a sample of US and Japanese students. They point out that
“…mobile phone [can be seen] not only as a tool to ‘talk’ but also as a means to

21
communicate symbolically about oneself” (p. 324). However, apart from
highlighting the strict correlation between fashion attentiveness and construction
of identity, they also noticed that the former one is directly proportional to
mobile phone usage. This means that the more people care about fashion, the
more they use their mobile phone, but also that the more people care about
fashion, and the earlier they started using a mobile phone.
Presentation of the self is also addressed by Ling and Yttri (2002), when
explaining the “two forms of social interaction via the cell phone: instrumental…
and expressive” (p. 55).
Ito et al. (2005) analysed the diffusion of pagers among the Japanese youth
population, and spotlighted the subsequent spread of mobile phones as the direct
consequence of the previous technological phenomenon. In addition to this, they
pointed out that personalisation is a common feature to the two wireless devices
in question.

Going back over the mobile phone attributes listed above (ringtones etc.), it must
be noticed that they are also some of the principal elements of the Mobile
Commerce business conception, which is the core topic of this analysis. Thus,
the idea of ‘expressing the self’ within the mobile phone usage is (again, as
fashion does) also a valuable concept that can be exploited to gain competitive
advantage and increase revenues.

3.2. The diffusion of SMS

As it has just been seen, mobile phones have definitely changed our lives in
terms of communication, both verbal and non-verbal.
Apart from the aspects linked to that issue and within the various features
embedded in the mobile telephone, text messages (SMS) have surely represented
a striking surprise in those last years, by many chosen as the preferred way of
interacting (Wright, 2006).

22
From a study included in the guide “The mobile is open for business” published
in 2005 by the company Netsize, it emerged that the number of text messages
sent each month in 20 countries of the EU reaches 200 billion units
(Consulteque, 2005). In another more updated investigation, Netsize affirms that
“between 20 and 25% of all operator revenues are generated by data services,
and 90% of all data revenues are SMS” (Netsize, 2007:17). The same company
argues that SMS might be the system upon which the m-Commerce will lever in
the upcoming future, although some other strategies can already be discerned in
the distance.

All this statistical information demonstrate how popular and at the same time
profitable is the market generated by SMS texts. Moreover, it is reasonable to
think that much of the success obtained by text messages is due to the high cost
of its direct successor, MMS (Consulteque, 2005; Ling, 2004). People use text
messages to communicate simple ideas, most of the times without having to wait
for a reply. This is surely one of the great advantages of such functionality. SMS
do not require immediate replies; therefore a user can comfortably rely on a
subsequent answer to his message as soon as his interlocutor notices it on his
device. For this reason, Ling (2004) correctly states that SMS are not as
“intrusive” as telephone calls.
From a communicative point of view, it is relevant to note how SMS are clearly
representative of the youth generation. We could affirm that teenagers use only
text messages to interact with other people. This aspect is strictly connected with
the economic factor, which has been mentioned in the paragraph 3.1.1.
But this element also relates to the concept of ‘personalisation’, discussed
previously; in fact, young people’s communication via SMS has proved to be
totally different from any type of interaction. The language they employ is
absolutely peculiar and distinguishable from the oral communication (Ling,
2004).
Therefore there is much truth in the opinion that teens appear to be the real
promoters of text messages. This last statement is also supported by parents’

23
view: a datum attributed to Cingular (now AT&T), in fact, reports that 63% of
US parents who use text messaging believe that it improves their communication
with their children (Entrepreneur.com, 2006?).

Figure 2. Worldwide SMS growth

Source: ITU Report Internet for a Mobile Generation, 2002; GSM Association.

3.3. The mobile phone domestication within the Italian

youth society

After the considerations made above in relation to the analogies among fashion,
construction of identity and mobile phone utilisation, the analysis narrows down
further and focuses on the Italian society.
This part of the discussion also leads us to the beginning of the research process,
and more specifically, to the first of the ten research questions presented in the
introductive chapter:

i. How is the mobile phone conceived within the Italian youth

society?

As it has been mentioned at the beginning of this report, Italy represents one of
those countries where the mobile phone has reached unexpected results. With a

24
degree of penetration that goes beyond 110% and that is constantly increasing, it
appears like an ideal market for the current and future telephony business.
Most of the factors that have been highlighted previously with respect to the
massive spread of the mobile telephone worldwide are applicable to the Italian
scenario.
Italian researcher Fortunati (2002) explains that the successful diffusion of the
mobile phone within the Italian society is mostly due to cultural reasons.
Fashion, for example, is a feature typical of the Italian culture, which is highly
observable in the mobile phone utilisation made by teenagers as well. But that is
not all. In fact, we might also include to this count the great importance given to
the concept of ‘family’ and, in general, to all the friendly and emotional ties. The
maintenance of the relationships (together with the improvement of
coordination) is seen as one of the core factors for the owning of a mobile phone
(Hooper, 2003; Sofi, 2006).
Fortunati (2002) introduces another interesting theme related to the Italian
culture.
As a matter of fact, she asserts that what really prompted the spread of the
mobile phone in Italy has been Italian’s lack of familiarity with technology. She
points out that:

“Italians are among the less enthusiastic about technological progress.

(Paradoxically, though, Italy is one of the European nations that have
most widely adopted the mobile phone)” (Fortunati, 2002:53).

And also

“The mobile [phone] has been a great success in Italy because it was
introduced not as a sophisticated technological instrument, but more
as a friendly, easy-to use gadget, a unique totem. So the early
promotion surrounding the technology showed it not as a serious
communication instrument, but rather as an easy-to-use toy – as
simple to use as a wired telephone.” (Fortunati, 2002:54).

25
In sum, Italian people conceive the mobile phone as a simple tool that enhances
communication, especially towards our most significant relationships.
This opinion is highly supported by another Italian researcher, Barbara Scifo, of
the Universita Cattolica of Milan. She asserts that adolescents see the mobile
phone as a ‘game’, while the adults consider it as a pure ‘communication
instrument’ (Sofi, 2006). This aspect reminds to what has been said previously
regarding teens, how they use the phone and the concept of personalisation.

Moreover, Scifo explains how the use of mobile phones by teens is extremely
conditioned by the economic factor (Sofi, 2006). In fact, in Italy it is very
popular the so called ‘beeping’ phenomenon, a practice with which users reduce
to zero the cost of communication. Such practice consists on calling a person and
make his device beep, in order to ‘inform’ him/her about, e.g. of the caller’s
presence or just to remind him/her of something. This strategy is extremely
popular and represents an effective way to interact without being charged.
According to what has been stressed in the previous sections, beeping finds its
roots in the fact that teens have a reduced economic power, which leads them to
manage their credit studiousness.
This aspect of the topic becomes extremely important, since it recalls the two
following research questions:

ii. What are the most popular features connected to the usage of
mobile phones within the Italian youth society?

iii. What is the mobile phone potential in the Italian market?

The problem connected to cost is something which is also directly reflected on

the way mobile phone users choose which device features they will use.
As the guide “The mobile is open for business” released by Netsize
demonstrates, among the factors that encumber the diffusion of MMS is their
high cost, nearly twice the cost of a text message (Consulteque, 2005). This

26
factor is emphasized by Scifo, which also adds how young people tend to avoid
the cost of sending the files stored in their mobile phone (e.g. pictures or audio
content) to their friends. Instead of using the MMS service, it is much more
common to employ the Bluetooth or a personal computer (Sofi, 2006).

In summary, we might say that the mobile phone is perceived as a pure

communication tool in Italy, regardless of the concepts of ‘convergence’ and
‘ubiquity’ that the EU and other important organisation are trying to promote.
Considering the last two questions, instead, it is clear that there is a great
difference between the utilisation of the mobile phone made by adolescents and
adults. Young people, who perceive it as an instrument for socialisation, tend to
exploit the ‘cheapest’ functions (e.g. SMS, music, camera etc.). On the other
hand, adults, who have more economic power, consider the mobile phone more
seriously, so appear to be the target to which mobile telephony firms have to
focus on in the next future.
In general, however, being the mobile phone seen as a communication medium,
it will struggle to find another place in the Italian people conception, especially if
the cost of the services will remain too high. This hypothesis is also reinforced
by what Fortunati (2002) calls ‘technophobia’. Nevertheless, the research
questions related to these aspects will need to find some kind of further
confirmation throughout the rest of the research paradigm.

3.4. The ‘beeping’ phenomenon: not only an Italian

practice

The strategy put in practice by so many Italian teens finds some common points
with the ‘beeping’ praxis so popular in sub-Saharan Africa, although the two
backgrounds in which they take place are substantially different.

27
 Jonathan Donner (2005), a researcher in the Technology for Emerging Markets
Group at Microsoft Research India in Bangalore 3 , has developed an interesting
study related to this issue. Basically, he claims that there are three different types
of beeping called ‘callback’, ‘pre-negotiated instrumental’ and ‘relational’.
The meaning of the first one (callback) is easily deducible: one person beeps
another one just to be called back, normally pushed by the lack of credit in his
mobile phone. This practice is also adopted by clients and employees, who beep
their providers/employers when they have to talk about work.
The second type of beep (pre-negotiated instrumental) refers to the
communication of pre-agreed messages. Donner cites the example of a taxi
driver that, by ‘flashing’ his wife’s mobile phone, ‘tells’ her that he has come to
pick her up in the placed they agreed to meet.
The last typology of beep (relational) belongs to the emotional sphere. In fact, it
is mostly used to convey messages like ‘I am thinking of you’ or ‘goodnight’,
without any expectations to be called back from the recipient of the beep.
In summary, these three main diversifications of the beep practice are regulated
by the concept that ‘the richer guy pays’ (Donner, 2005:7), a consequence of the
serious economic situation that the African continent is facing. Therefore, the
common point with the ‘beeping’ phenomenon typical of the Italian teenagers is
still the need to bypass the cost connected to the usual transmission of a message
via a mobile phone, forced by a precarious economic condition.
Mawaki (2005) also refers about the practice called ‘bip falado’ (spoken beep),
extremely diffused in Mozambique. Users exploit the fact that one mobile
operator in Mozambique starts charging after the third second of conversation, so
they interact with short discussions of 2 seconds each in order to avoid paying
for their calls.

3
Information retrieved from Jonathan Donner’s personal website (jonathandonner.com)

28
 4. The Mobile Commerce

So far this analysis has focused on the instrument that has changed the way we
interact, reflecting its great power in both verbal and non-verbal communication.
However, that is just the impact that the mobile phone has had on the sphere that
constitutes the main goal for its creation.
In fact, it has also indirectly changed the way we manage our time and simplified
the manner we coordinate our activities.
But with the course of the time, together with its rapid growth and penetration in
almost every society of the world and the constant innovation in terms of
telecommunication technology, the mobile phone has evolved to a tool that
means much more than simple communication.
Following the concepts of ‘ubiquity’ (as the consequence of the increased
amount of time spent out of home, typical of the modern individual) and
technological ‘convergence’ (Alleman and Rappoport, 2007; Bueti and Obiso,
2005;; OECD, 2007; Srivastava, 2004), the mobile phone will represent soon the
indispensable instrument whose functions will encompass all the possible
activities of our everyday life, able to satisfy our desires at any time and at any
place.

Looking at the topic from a business point of view, we might be tempted to

argue that the so invoked convergence is just a direction imposed by TLC
companies, which aim at exploiting new ‘prefabricated’ needs and generating
new sources of revenue following the saturation of the voice market in the most
advanced countries (Jeffries, 2007). Moreover, they have to regain what they
have spent to obtain the so expensive 3G licenses (Sadeh, 2002).
Nevertheless, the current scenario sees now the telecommunications sphere
projected towards the Mobile Commerce (or m-Commerce), an abstract and
confusing concept to many of us, but at the same time reality for some social

29
contexts. Japan is surely the example to imitate, a portrait of the future world
society based on the concepts described above (Bueti and Obiso, 2005).

4.1. The concept of Mobile Commerce

Defining Mobile Commerce is not a simple task. However, many sources try to
explain such a phenomenon in a very simplistic way: exploiting Electronic
Commerce (e-Commerce) from a mobile device.
This aspect must be surely taken into consideration when describing m-
Commerce, since both have many points in common. However, Mobile
Commerce has a broader scope: it is much more than simply browsing the net
and buying something. It is a more complete experience, able to enrich the deep
change begun by the mobile phone.
Here are some definitions of m-Commerce, which cover the topic differently.

According to Elliott and Phillips (2004), the Mobile Commerce is better

described as “the mobile devices and wireless networking environments
necessary to provide location independent connectivity” (p.3).

Sadeh (2002) instead, reports the description made by Durlacher Research which
defines the Mobile Commerce as “any transaction with a monetary value that is
conducted via a mobile telecommunications network” (p.5).

Schwiderski-Grosche and Knospe (undated) describe the term m-Commerce as

“…using a mobile device for business transactions performed over a mobile
telecommunication network, possibly involving the transfer of monetary values.”
(p.2)

30
Another set of interesting definitions is cited in Bertrand et al. (2001), a group of
students from the Kellogg University. Among the descriptions provided, two are
particularly interesting.
The first one comes from Forrester Research and asserts that the Mobile
Commerce corresponds to “the use of mobile handheld devices to communicate,
interact via an always on, high speed connection to the Internet” (Bertrand et al.,
2001:4).
The second one, instead, is attributed to Mobilocity, a management consultancy
based in the USA. They identify m-Commerce with “the use of wireless
technology to provide convenient, personalised and location-based service to
your customers, employees and partners” (Bertrand et al., 2001:4).

Among all these possibilities, the most appropriate seems to be the one proposed
by Mobilocity, which gives a clear and at the same time comprehensive
explanation of what Mobile Commerce really represents. In particular, it
correctly stresses the presence of ‘personalisation’, which features the m-
Commerce services.
However, there are a few important elements in the expression used by Forrester
Research, especially those ones referring to the type of connection.
Therefore, the best way to describe mobile commerce would be a combination of
both definitions, that is:

“The use of a wireless technology to provide convenient,

personalised and location-based services to customers, employees
and partners via an always on, high speed connection to the
Internet”

In this way, both the main characteristics that distinguish the m-Commerce
services and the quality of the connection employed are highlighted.

31
 4.1.1. Differences and analogies between e-Commerce and
m-Commerce

It has been explained in the latest paragraph that the Mobile Commerce is by
many described as the implementation of the Electronic Commerce via a mobile
device.
As we saw, that does not give a correct idea of what m-Commerce really stands
for.
In fact, although there are similarities between the two practices, the m-
Commerce is conceived as a totally diverse experience. It is actually ideated to
be performed in a different manner (via a wireless device, normally out of home)
and to satisfy different needs (buy a ticket for a show, reserve a table at the
restaurant or even get traffic information). Moreover, while with the e-
Commerce it is the user that searches for a specific product on the Internet, the
m-Commerce rests on the concepts of ‘personalisation’ and ‘mobility’.
In summary, although the two technologies share the idea of buying and selling
products/services over the Internet, the m-Commerce enables the user to get
specific services tailored to its preferences and current position.
This topic recalls one of the research questions, and more specifically:

iv. To what extent the Internet can be associated to the use of mobile
phones?

As the relationship between Electronic and Mobile Commerce testifies, the

Internet has an important place in the performance of both technologies.
However, in the m-Commerce the Internet plays a more ‘subordinate role’ with
respect to the e-Commerce, simply because the former is much more than
surfing the WWW and searching for a determined product/service. It definitely
goes beyond that.
The confirmation of this view is given by Elliott and Phillips (2004), who
observe that the “Mobile Internet is but one application amongst many others
within the m-Commerce world” (p.3).

32
Further information to complete the answer to the question number ‘iv’ will be
gathered in the next chapters. The study will also try to discover whether there is
a direct implication between the existence of an e-Commerce culture and the
potential success of m-Commerce, with a particular attention to the Italian
situation (research question ‘vi’).

4.2. Overview of the m-Commerce business models

From the close examination conducted in the previous section, the Mobile
Commerce emerged as a unique technology, if compared to the other ones
present in the telecommunications environment.
Its uniqueness, recognisable in its aims and trademarks, is also distinguishable in
the new business models ideated by the TLC companies.
The conception of m-Commerce has created new scenarios for the
telecommunications business, reshaping its ‘usual’ value chain and also offering
the chance of gaining market shares to new participants (Sadeh, 2002).

According to Sadeh (2002) “above all, m-Commerce is about content and giving
users access to a myriad of mobile services” (p. 37). This statement gives
prominence to what has been defined as unique with respect to Mobile
Commerce: the services that users can make use of.
But services are obviously made of content. Therefore, content providers are
seen as one of the most crucial constituents within the m-Commerce value chain.
Their utmost importance is recognisable in the great number of business models
that the companies can produce in order to exploit efficaciously the market.
Here are reviewed the most popular patterns within the m-Commerce universe
(Sadeh, 2002).

33
 4.2.1. User fee business models

The core ideology that constitutes this type of business model is charging users
according to the amount of content they utilise.
Users might be charged in two different ways:

• Subscription fees, which prefigure the charge of a fixed cost for the
utilisation of one or more services during a pre-agreed period of time.
• Usage fees, with which TLC enterprises assign a specific price to each
product/service they offer, charging users proportionally to their actual
access to the services. However, this model appears to be slightly
complicated in terms of billing process.

4.2.2. Shopping business models

It is without any doubt the simplest way of conceiving business via a mobile
device, in that it is pretty similar to the buying/selling experience occurring in
the Electronic Commerce.
It involves a mobile buyer and a mobile seller, which start and complete a
transaction. Sometimes there is the participation of a third part, who usually
manages the payment process.

4.2.3. Marketing business models

This particular type of business model is the one that better conveys the idea of
personalisation. In fact, companies use this strategy to send marketing messages
customised to the user’s profile, in order to increase the possibilities to appeal
the potential consumer.

34
The costumer’s information is normally gathered through the wired Internet, due
to the limitations of mobile devices.
Being personalisation the core concept of such a business strategy, for a
company knowing its customers better than its competitors will result the best
method to reach its business goals.

4.2.4. Improved efficiency business models

The general aim of these business models, as the name suggests, is to reduce
managing costs and contemporaneously improve costumer satisfaction.
Cutting costs may be reflected in many ways: the simplest example is surely the
reduction of personnel employment.
Mobile banking and mobile ticketing are seen as two expanding sectors in this
direction. They enable customers to avoid bothering queues in the respective
offices and manage every single step of the procedure from the mobile device.

4.2.5. Advertising business models

This framework lies in a basic and simple scheme: the advertiser is charged by
the content provider whenever it wants to deliver an advertisement to the
potential costumer.
Advertisements can be sent in two different ways to mobile phone users:

• push mode, that is sending specific messages to the users, i.e. via SMS

• pull mode, that consists in showing promotional messages (e.g. in form

of banners) while the users is accessing a specific typology of content.

35
 The promotional message is obviously chosen by the content provider
according to the information retrieved by the user

Finally, content providers may charge the advertisers in different modalities,

such as:

• flat fees, that is charging a pre-agreed fee for a specific period of time

• traffic-based fees, a charging method directly proportional to the number

of times that a message is shown
• performance-based fees, or charging the advertiser each time its
promotional message is ‘hit’ by the mobile phone user

4.2.6. Revenue-sharing business models

The basic pattern that underlies those business models, in their simplest
organisation, sees the content provider sharing the revenue that comes from the
business operation with all those parties that cooperate in creating the
product/service.

4.3. Case study: NTT DoCoMo’s i-Mode success

Following what has been anticipated in the first chapter, the best example of
successful implementation of an m-Commerce business model still belongs to
the major Japanese telephony provider, NTT DoCoMo, which launched the i-
Mode system in 1999, determining an important change both in the TLC market
and the habits of the Japanese society (Srivastava, 2001).

36
Analysing the reasons connected to its prominent results in Japan will help to
obtain relevant information useful to understand better the current situation of
the Italian socio-economic context, as well as draw conclusions for the future
development of the m-Commerce in the Italian market.

However, before considering its successful evolution, one question must be

answered: how was the Japanese telecommunications scenario when the i-Mode
was implemented?

4.3.1. The Japanese background at the end of the

millennium and the contextual factors that enabled NTT
DoCoMo’s i-Mode service to stand out on the market

Statistical data show that the i-Mode has boosted notably the level of Internet
penetration, with excellent results right after one year from its launch (fig. 3).
Such a model, in fact, proposed the mobile Internet as a more than valid
alternative to the wired one, which was encountering enormous problems with its
diffusion. Difficulties were mainly due to low pc penetration rates and high
leased line rates (Srivastava, 2001).

Data relative to market research conducted by the Japanese Ministry of Internal

Affairs and Communications also confirm that trend, highlighting, on the
contrary, the extraordinary popularity of the wired Internet within the large
businesses in those years (fig. 4).

37
Figure 3. Internet penetration in Japan from 1999 to 2000 (percent)

Source: ITU 3G Mobile Policy: the Case of Japan, 2001

Figure 4. Wired Internet diffusion rate in Japan from 1999 to 2005

Source: Japanese Ministry of Internal Affairs and Communications, 2006(?)

38
However, the main factor behind the immediate success of the mobile Internet
format has been undoubtedly the great penetration of mobile phones (keitai),
which jumped from around 45% to 53% over the two year period 1999/2000.
Contemporaneously, this growth had been largely pushed by the introduction of
colour display devices, which granted a much better exploitation of the new
mobile services (Srivastava, 2004).

In turn, the rapid diffusion of mobile phones has been favoured by a strong
governmental policy (deregulation) started in the 1990s: customer ownership of
the devices was introduced in 1994, and in 1996, following the Ministry of Posts
and Telecommunications (MPT) modification of the mobile calls charge
regulations, tariffs could be reduced, determining a sudden increment of keitai
purchases (Ito et al., 2005; Srivastava, 2004).

Another fundamental element that facilitated the spreading of keitai, who

subsequently enabled the mobile Internet evolution, was the great popularity
achieved by the pager (in 1996, pagers subscribers accounted for over 10 million
people).
Extremely popular in the 1990s among Japanese students, the pager was the
communicative instrument which contrasted the diffusion of the mobile phone
within the wealthy class. Ito et al. (2005) refer of a well-established pager
culture among the Japanese young students, which created the background for
the future establishment of mobile phones. As a result of this, pager messages
(popular especially among the Japanese young girls) can be considered as the
precursors of the email, largely preferred to SMS in Japan.

Last but not least, a cultural element rooted in the Japanese society which must
have notably bore on the evolution of such phenomena has been the great
proneness towards innovation and technology. Japanese people are reported to
be constantly interested in new valid technologies and, given their high

39
purchasing power, they configure as the best example of early adopter society
(JETRO, 2006).

In summary, the mobile Internet in Japan has emerged almost at the same time as
the wired Internet, as an alternative solution rather than a subsequent
phenomenon, as occurred in many other countries, favoured by a strong ‘mobile
communication culture’ commenced with the diffusion of pagers and continued
by mobile phones.
These conclusions relative to the link between the evolution of the Internet and
mobile phones popularity result as an interesting contribute to formulate an
answer to the research question (iv).

4.3.2. The launch of NTT DoCoMo’s i-Mode: analysis of an

innovative business model

As anticipated above, NTT DoCoMo hit the Japanese market with the launch of
its new mobile service, i-Mode, in February 1999, becoming one of the very few
countries to obtain enormous success with the 2G mobile Internet (Srivastava,
2004).

Straight after its implementation, its rapid establishment as the most popular
mobile service enabled NTT DoCoMo to obtain the leadership in the Japanese
TLC sector, which also saw other two providers, KDDI and Vodafone (Ito et al.,
2005; Srivastava, 2004).
The big hit got by the i-Mode was due to many factors, and the majority of them
have been reviewed in the last paragraph. Many of them were relative to the
communications environment and its situation in those years in which the
ideation of the system was still in progress.

40
Others concerned the physiognomy of the TLC sector and its mutations during
the first period of implementation of the model, for want of the Japanese
government.
In fact, the launch of the i-Mode model was perfectly inserted in the
governmental program called ‘e-Japan Strategy’, a large plan ideated in January
2001 with the aim of transforming Japan into the best IT country in the world.
The development of the program would have taken five years and it was divided
in two phases.
The major aim of the government was to drive Japan straight to a ‘ubiquitous
networked society’ within a very short time, based on high competitiveness and
reduced costs. One of the keys for the success was the creation of an adequate
infrastructure framework, a task clearly saddled to the Japanese TLC private
sector (Srivastava, 2004).

But the main reason for the success of NTT DoCoMo’s model was surely due to
the fact that it was (and still represents) a pure breakthrough.
The system lays its foundations on a strong and innovative business model,
which offers an easy-to-use service at a very cheap price to its customers.
Considering that Japan offers a catchment area of about 127 million people
(Srivastava, 2004), proposing a revolutionary model like i-Mode also meant the
chance for huge revenues.

The greatest advantage offered by NTT DoCoMo was the possibility to exploit a
packet-switched technology, which in turn granted an ‘always on’ feature (Ito et
al., 2005). That meant enabling users to only pay for the actual content they
access while the device is on. In a few words, a fairer way of charging the user
based on the actual amount of data transferred (Sadeh, 2002). The monthly fee
for the i-Mode subscription is around $3 (JPY 300 per month, plus JPY 0.3 per
packet) (Srivastava, 2001). However, the packet-switched technology was
extended to the voice traffic as well: every phone call was charged 10-yen per
unit (Ito et al., 2005).

41
 The transfer speed was initially of 9.6 Kbit/s, which might appear too slow at a
first sight. Actually, due to the limited maximum application data size (10
kbytes) and the very small dimension of the content sent and received (e.g.
emails), the apparently slow transmission speed did not affect the quality of the
service (Elliott and Phillips, 2004; Srivastava, 2001).

Among its main services, which range from mobile Internet, email, mobile
banking, infotainment (information services regarding traffic, weather, download
of screensaver, ringtones etc.) and location-based services (information and
services depending on the current location of the user 4 ), the i-Mode offers the
possibility to choose from around 3000 ‘official websites’, regularly checked by
NTT DoCoMo and made available from its portal. But that is not all. One of the
most striking features of this new system stays in giving the chance to anyone to
contribute in the enlargement of the i-Mode universe, creating and submitting his
own websites (thus not a ‘walled garden’ approach). In fact, the i-Mode is based
on a particular version of HTML (together with a special version of JAVA)
called cHTML or compact HTML, which meant that the language used to create
the website was the same as the wired Internet. That is also the main difference
with the first WAP technology (based on WML language), popular in Europe
and in many other areas of the world.
Unofficial sites were supposed to be around 50000 in 2002 (Elliott and Phillips,
2004), and their amount kept growing, due to the great enthusiasm generated by
such model. These sites (together with the official ones) are part of the ‘multiple
sources of revenue’ pattern elaborated by the Nipponese TLC giant. More
specifically, the mobile service provider keeps 9% of the subscription fees that it
collects on behalf of the content providers, which exploit NTT DoCoMo’s well-
established billing system to gather their revenues (Sadeh, 2002).
The first positive results were not late. Elliott and Phillips (2004) assert that
“81% of the world’s wireless Internet users were resident in Japan in the year

4
Location-based service were further subdivided into three main categories: services for the moving
user, services for the moving objects and services when both the user and objects are moving (ITU,
2004)

42
 2000, and of these over 61% accessed the mobile Internet using the i-Mode
service” (p. 142). At the beginning of 2001, instead, NTT DoCoMo estimated
around 20 million i-Mode subscribers (Sadeh, 2002), which became 24 million
in July of the same year (Srivastava, 2001). In 2003, NTT DoCoMo calculated
USD 236 as average annual revenue per i-Mode user (Srivastava, 2004). Finally,
at the beginning of 2006 the NTT DoCoMo’s subscribers were over 50 millions,
while data subscribers accounted for the 91% of the total subscribers (OECD,
2007).

In June 2000 NTT DoCoMo was awarded with one of the three 3G licenses
available for the Japanese TLC sector. Winners were selected under those
participants that comply with the minimum requirements established by the
government (beauty contest) 5 .
The Japanese major provider launched then its own 3G services (called FOMA)
at the end of 2001. Such services were based on one of the five ITU’s IMT-2000
standards called W-CDMA, which allowed voice and data services, circuit and
packet connection modes and high speed connections (from 384 kbit/s and up to
2Mbit/s) (Srivastava, 2004). At the end of January 2004, NTT DoCoMo’s 3G
service subscribers went over 2 million units.

Another important step made by NTT DoCoMo still at the end of 2001, with a
clear aim of getting ready for future investments abroad, has been the passage
from cHTML to xHTML basic, the same language adopted by WAP Forum for
its last WAP version (WAP2.0). The intent of both parts has been to cooperate to
the creation of a more uniform mobile Internet environment, based on the
languages used within the wired Internet (Dell’Aquila, 2003; Sadeh, 2002; WAP
Forum, 2002).

As anticipated before, sending and receiving email is the most popular feature
among the Japanese i-Mode users (Ito et al, 2005; Srivastava, 2004), who

5
Information obtained from ITU website (www.itu.int/net/home/index.aspx)

43
considered such practice the most important reason for the use of the mobile
Internet (fig. 5).

Figure 5. Most important reasons connected to the mobile Internet use in Japan

Source: ITU Shaping the Future Mobile Information Society: The Case of Japan, 2004

According to Ito et al. (2005), the mobile Internet is particularly widespread

among young people. Teens between 13-19 years register a 90% of keitai
Internet usage (the heaviest users in Japan). After that age, mobile Internet usage
tends to decrease gradually (to advantage the voice traffic), proportionally to
age. However, mobile Internet adoption is still high among 20-29 year old
mobile phone users (86.4%).

44
 4.3.3. Conclusions

This case study has given a portrait of the i-Mode introduction in Japan and has
highlighted its most important features, showing that such a success has been
achieved thanks to many factors.
Apart from a simple and at the same time incisive business model, the i-Mode
has been successful because it has been proposed to a market that was ready to
embrace it. The chances for NTT DoCoMo to hit the Japanese market were
evidently increased by the presence of a strong mobile culture, constituted by
both mobile phones and pagers popularity, but also by a determined
governmental policy which aimed at turning Japan into the best example of IT
society. With respect to that purpose, one of the most important decisions has
been to create a proper infrastructure, in order to support the technological
evolution.
This model has also exploited cultural features typical of the Japanese society:
the passion for technology and innovation (Vernon, 2006), and the high degree
of mobility (time spent out of home) (Ito et al, 2005).
Additionally, the great merit of NTT DoCoMo has been to keep investing in the
TLC sector (while still keeping attention on its 2G subscribers, especially those
ones living in the most rural areas of the country), following the evolution of the
i-Mode service with continuous improvements in terms of infrastructure, quality
and cost of the service. That policy has granted the Japanese major provider to
maintain customer satisfaction and has made the i-Mode the best m-Commerce
model ever implemented.

45
4.4. Other successful examples of m-Commerce
implementation and the situation in the most important
areas of the world

Although the model proposed by NTT DoCoMo is still seen as the most shining
example of mobile commerce system, there are several other successful cases
that deserve to be reviewed.
Within the European scene, Northern Europe stands out for the large number of
m-Commerce services launched on the market (Sadeh, 2002).
The Finnish company Nordea launched its WAP Solo in October 1999, a service
that mainly focuses on mobile banking, but also features a customised shopping
mall called ‘Solo Market’, where users can choose a large number of sellers.
The WAP Solo experience is also extended to wired Internet and via cable
Internet TV, so the users are enabled to manage their own Solo accounts from
any device and with the same ease. The price for such service is, like the i-Mode,
extremely cheap. Nordea has more than 2 million subscribers.

Still in the Nothern Europe, Orange has developed in Denmark a mobile

payment solution called ‘Orange Mobile Payment’ which works as a virtual
point of sale, and is based on the WAP technology and SIM modules.
Sonera has launched its ‘Sonera Mobile Pay’ in Finland and Sweden, enabling
both real and virtual POS functions. The service called ‘dial a coke’, which was
implemented in the Helsinki airport, obtained a very high resonance. It enabled
customers to dial a special number in order to buy a drink. The cost was
automatically detracted from the credit. Sonera Mobile Pay also enables its users
to make reservations and book tickets, and even buy clothes from their mobile
device.

In Holland, the Dutch provider KPN Mobile launched in 2002 a particular

version of the i-Mode model, as part of the partnership with NTT DoCoMo.
However, the implementation of the model that has had so much success in
Japan has not had the same results in Holland. The same destiny happened to the

46
Italian operator Wind, who launched the Japanese model in Italy (Portel, 2003;
Visionpost, 2007).
Austria is also particularly active towards mobile commerce service adoption.
‘Banko.max’ from the Austrian branch of the German giant T-Mobile is another
virtual POS system, which features an e-wallet that enables users to manage their
credit card(s) and bank account details from the mobile device.

An interesting service called ‘Secure Mobile Commerce’ has been launched in

Switzerland in 2006, thanks to the partnership among Crealogix (leader in the e-
Commerce field), Sunrise, Arcot, Datatrans, Visa Europe, Corner Banca and
Telekurs Multipay. The solution in question enables mobile users to buy
products using their Visa card from their mobile device. The payment system
exploits the well-known feature ‘Verified by Visa’, extremely popular in the e-
Commerce area (Sunrise.ch, 2006)

In Spain, the service called ‘Mobypay’ involves both micro and macropayments,
and has been produced though a cooperation between several mobile telephony
providers and banks.

In the USA, the service promoted by Yahoo! called ‘Paydirect’ enables users to
transfer money from their virtual accounts to their bank accounts and vice versa,
similarly to Paypal (also used by mobile phone users).
Still in the USA users can choose AT&T’s ‘DirectBill’, which limits the amount
of micro payments to $10. However, users can request a special e-wallet feature
for larger transactions.
The USA is also the main country where mobile information services have got a
foothold. Among the most pre-eminent providers there are CBS, Reuters and
The Wall Street Journal. News and information are sent directly to the user in
form of SMS messages.
However, mobile commerce is struggling in the USA as well, mostly due to the
low penetration of mobile phones (nearly 55% in 2005) (Consulteque, 2005).

47
In Africa, Kenya is one of the first adopters of mobile payment solutions (Rice,
2007). Vodafone has in fact launched a new service called ‘m-Pesa’ (translated
as mobile money), with which people can transfer money to other devices. Such
solution constitutes a great help for those people who want to send money to
their relatives living in the rural areas. Rice underlines that in Kenya nearly 80%
of the population has not actual access to the financial sector.

In Asia, Korea represents the second mobile commerce market after Japan. 3G
services were launched in 2001 by both Korean and Japanese operators after the
creation of a proper infrastructure (Minges, 2003; OECD, 2007). In 2002 mobile
Internet subscribers were 74.9% of the total mobile subscribers (Srivastava,
2004).

In general, the most popular m-Commerce services around the world focus on
mobile payment and mobile banking. Elliott and Phillips (2005) confirm this
view:

“In the USA and Europe emphasis is placed on business applications,

such as checking banking details or stock portfolios, whereas both i-
Mode and WAP services in Japan are market focused on games and
entertainment and other social activities” (p.149)

They enable to send the so called ‘micro payments’ (Bradbury, 2006; Zandiri,
2001) via virtual POS, using the Bluetooth function, which is now available in
the majority of the mobile devices. However, current m-Commerce solutions
often embody further features, like e-tailing, entertainment content (games,
ringtones, screensaver etc.) and various typologies of information services
including location-based ones (Sonera and Orange are two of the most relevant
providers offering this last type of services in Europe). The major reason for
such a spread of mobile payment services is that the mobile telephony aims at

48
using mobile phones to replace our credit cards, as true electronic wallets
(Hiscock, 2006). That is also why there is such emphasis on the Bluetooth
technology, seen as the core feature for the future payment scenario (Bradbury,
2006).

However, one of the main differences between Japan and the rest of the world
remains in the network infrastructure (NTT DoCoMO already counts a large
number of 3G subscribers, which are constantly increasing, and is already
planning to launch the Super 3G by 2010 (Nakamoto, 2007) and the quality of
the devices (in Japan they have a bigger screen and longer battery life),
extremely important for the optimal fruition of 3G mobile services.
For what regards the difference in billing models, with its WAP 2.0 the WAP
Forum has moved towards the packet-switched pattern (the one used by the i-
Mode), a choice which will help reducing costs of the future mobile services.
WAP 2.0 also aims at the complete diffusion of high speed connections in a very
short time, for the exploitation of 3G services (called UMTS in Europe) in the
majority of the European countries and the USA (WAP Forum, 2002).
Finally, according to the European Commission (2006), in September 2005 3G
service users in Europe accounted for just 15 million subscribers. Such figure
confirms how 2G telephony is still the leading standard, and how far Europe is
from the outcome obtained in Japan.

4.4.1. Mobile providers offering m-Commerce services in

Italy

In Italy, each of the four mobile carries provides Mobile Commerce

services.They are H3G, TIM, Vodafone and Wind.

The first one has been ‘3 Italia’ (of the H3G group), which in 2003 has launched
a UMTS offer based on 10 hours of voice traffic, 10 hours of videocalls, 150

49
MMS, 100 emails, and 100 units of content per week. Prices shifted from €85 to
€140 per month, with the latter price indicating the rent of the handset. The cost
of the handsets, however, was very high: from €550 to €900, with the possibility
to choose between a NEC and a Motorola model (Gianni, 2003). Actually, 3
Italia aimed at hitting the market with video telephony, rather than with other
features. The main constraint, apart from the huge cost of its products, was the
infrastructure. In fact, in 2003 only the 13% of the Italian territory was covered,
following a choice made by the same provider to restrict the first stage of its
implementation to the biggest cities. Things changed in 2004, with the network
coverage reaching the 60% of the population (Bueti and Obiso, 2005). The last
financial results say that by 21 March 2007, 3 Italia had 7.19 million customers
in Italy, and by the end of 2006 the network coverage reached the 84% of the
population. Current 3G services include video telephony, mobile Internet (one
month of navigation currently costs €6), email, community chat, digital mobile
television (via DVB-H) including six channels reserved exclusively to football.
Digital television subscribers are nearly 400.000 (3 Italia, 2007). Finally, within
3 Italia’s business model, it is particularly interesting the service called ‘See Me
TV’, close to the concept of YouTube, with which people upload video content
and receive a small fee each time their material is watched (OECD, 2007).

TIM also offers mobile Internet (from €5 to €9 per month), but via WAP
technology. The ‘Tutto Compreso’ offer, which includes mobile Internet, email,
Google and YouTube navigation together with the UMTS mobile phone rental,
costs €20 per month. TIM also offers mobile digital television via DVB-H, but
the network coverage still appears limited. TIM is the only operator in Italy who
has implemented the EDGE network, a sort of ‘bridge’ between GPRS and 3G.

Vodafone Italia has based its own WAP m-Commerce proposal on its Vodafone
Live portal, which provides services focusing on communication (SMS, MMS
and email), entertainment (audio and video content, screensavers, ringtones,
games etc.), information (traffic information, general news, weather information

50
 etc.) and mobility (location-based services). Interestingly, the majority of the
services are sent to users in form of MMS 6 . Additionally, Vodafone offers the
chance to watch mobile television too.

The last operator, Wind, has had a remarkable role in terms of m-Commerce
implementation in Italy. As already noticed, Wind is the carrier that launched the
i-Mode in Italy in 2003, thanks to a partnership with NTT DoCoMo (Portel,
2003). Still the most important investment made by Wind in these years, the i-
Mode system reflects all the same characteristics of the Japanese one. In fact,
users get directed to the main portal, where they can choose from a wide range of
official sites, or simply type the URL of compatible websites. Just to give an
example, the email service costs €3 per month, while mobile Internet and email
cost €6 per month. However, the billing model follows the packet-switched
pattern (cost based on Kb traffic sent and received), while the cost of the
contents ranges from 0 to 5€.
Wind also offers the i-Mode model via UMTS connection.
By the end of 2006, Wind i-Mode subscribers were estimated to be around
680.000 7 .

Apart from the services offered by the four major telephony providers, in Italy
there is a really small trace of other solutions ascribable to the category of m-
Commerce.
One example is ‘MobilMat’, a circuit promoted by WIND and Visa which
allows users to manage their own credit card or pre-paid traffic as an electronic
wallet, in order to complete purchases on the Internet, in the shops belonging to
the MobilMat circuit or simply to transfer money from/to other MobilMat
customers.
The second example is related to the project developed by the company Telepark
in Turin and other 6 important cities in Italy, with which drivers can pay the

6
Information gathered from Vodafone Italia website (www.vodafone.it)
7
Information gathered from Wind i-Mode website (i-mode.wind.it)

51
metered parking via mobile phone, just using an SMS. The charge is in fact
automatically detracted from the Telepark card, previously bought by the
motorist and activated with a text message, where all the detail concerning the
parking must be specified (Ottolina, 2004). A similar service has been
implemented by Vodafone in Brescia, Pisa and several other cities.
Within mobile banking, instead, the financial institution Banca Intesa results
particularly active, providing a full range of services to its customers via WAP,
through SMS/MMS. Such services are completely independent: they can be
managed regardless of the mobile provider chosen (Bueti and Obiso, 2005).

4.4.2. Mobile Commerce and the issues concerning security

and privacy

From the analysis of 2.5G/3G telephony surely emerges an intriguing portrait of

what our society will be and how our customs will be shaped. There will be (and
in some places like Japan there are already) new services capable of making our
everyday nature simpler, increasing our free time and comfort.
However, this scenario is still open to doubt. Specifically, mobile security and
privacy remain topic issues with regard to the m-Commerce diffusion.
So far there has not been any notice of mobile viruses, apart from the so called
‘Cabir’ worm, which used the Bluetooth to spread and attack smartphones
(Regan, 2005). Although remaining the only case of mobile device virus, it
might open the door to a future problem, mining the security of mobile phones
and consequently reduce the diffusion of the m-Commerce.
Mobile payment involves credit card information, as well as personal data,
which would certainly be under enormous risk in case of say, loss of the mobile
phone, intrusion or virus attack. As James Messham (undated), technical director
of Fraud Management Ltd refers when talking about m-Commerce, “experience
has shown that wherever something is of value it will be targeted for attack”.

52
A possible solution is provided by NTT DoCoMo CEO Masao Nakamura, who
explains that in the next future all the personal information regarding the user
will be stored in the carrier’s server rather than in the mobile device (Hiscock,
2006). An alternative choice is relying on the SIM card module, which protects
with encryption algorithms the information it stores; probably, that is the most
used method all over the world.
The last eventuality is represented by WAP Forum’s WIM, a module containing
all the authentication keys required by the user. It can be embedded in the SIM
card or just inserted in the device as a separate module (Sadeh, 2002).
The only thing to do is to wait and see how these issues will be covered in the
next future, knowing that they represent core aspects for the definitive take off of
the Mobile Commerce.

4.5. Overview of the Italian situation

Italy reflects the general situation described so far, that is a market with a big
potential yet not entirely exploited.
According to Srivastava (2004), in 2002 mobile phones in Japan accounted for
63.6% (81.1 million users) of the whole Japanese population, and overtook the
number of fixed line subscriptions. In 2005 instead, according to the Ministry of
Internal Affairs and Communications, mobile phone subscriptions in Japan
increased up to 87 million units. Out of this, 86.4% were also users of the mobile
Internet.
As a term of comparison, in the year 2003 Italy accounted for 52.3 million
mobile phone users, with a mobile penetration percentage of 101.8% (Bueti and
Obiso, 2005; OECD, 2005).
This data, although not relative to the same year as Japan, confirm Italy to be a
market with the same (or even proportionally better) potential as the Asian
mobile leader.

53
However, the m-Commerce still represents a future prospect for mobile phone
users, rather than a present opportunity (Bueti and Obiso, 2005).

From the analysis made in the section 4.4.1, it emerges that the m-Commerce
environment in Italy is pretty variegated in terms of solutions offered by the
telephony providers, and that a few services have been implemented by
independent societies. In a few words, Italy does not seem, from the point of
view of the mobile products available, so far from the most advanced countries.
Nevertheless, the problems concerning the slow spreading of the mobile
commerce are amenable to other factors, both technical (with some political
implications) and cultural.

Starting from the technical side, a shared element among all the providers
concerning the 3G telephony implementation is the lack of a complete network
infrastructure, which in turn has been one of the priorities in Japan. In Italy, the
absence of proper network coverage affects principally the south and the rural
areas (Bueti and Obiso, 2005).
Also the cost of 3G services appears still high, whereas the most accessible
products are represented by the 2G/2.5G ones. Just until a couple of years ago,
even the mobile devices had a very high cost, which was undoubtedly an
insurmountable obstacle for many people.

Additionally, apart from the Wind case, all the mobile operators have chosen a
‘walled garden’ approach for their mobile Internet portals. This issue might
represent another limitation to the diffusion of the m-Commerce models in Italy,
since that solution has favoured the establishment of i-Mode in Japan.
According to that, it might be wiser to introduce such pattern in the Italian
paradigm too, especially now that the most used system regarding mobile
Internet (WAP) has moved towards the most popular programming language
(xHTML).

54
Within the technological sphere, the evolution of the Mobile Commerce in Italy
might have a relationship with the slow diffusion of the e-Commerce and, in
turn, of broadband and the Internet (reference to the research questions iv, v and
vi). According to Bueti and Obiso (2005), by July 2004 there were just
3.500.000 broadband connections in Italy.

This aspect seems also to be connected to cultural characteristics. Specifically, a

relevant factor might be what Fortunati (2002) has remarked as ‘technophobia’,
discussed in the section 3.3.
This view is supported by a study conducted by The Economist (2007) and
called ‘The 2007 e-Readiness Rankings’, where e-readiness is defined as “the
‘state of play’ of a country’s information and communication (ICT)
infrastructure and the ability of its consumers, businesses and governments to
use ICT to their benefit” (p. 1). The ranking, which counts in 69 countries, sees
Italy just in 25th position with a score of 7.45 (out of 10), while in the first three
places there are Denmark (8.88), US and Sweden (both 8.85). Italy is
surprisingly behind countries like Singapore, Bermuda, Israel and Malta.
Moreover, the absence in Italy of what as been defined as ‘strong mobile culture’
in the section 4.3.3, referring to the previous pager and mobile phone popularity
within the Japanese society, seems to be a valid element in relation to this issue.

As already noticed throughout this report, further limitations come from the
devices employed for the 3G telephony exploitation and, also, by the often
unclear range of offers available, which tend to confuse users.

Going back to the costs connected to m-Commerce services and to 3G

telephony, it is impossible not to take into account the economic crisis into
which Italy has fallen for many years now, and which is directly reflected in
Italians’ purchasing power. A study from ISAE has found out that the 74% of the
population in Italy affirms to be poorer than a couple of years ago, with a
constant growth since 2003 (Corriere della sera.it, 2007). Such share also

55
remarks that the income available is normally sufficient for general and
necessary family expenditure, without any ‘superfluous’ purchases.
Considering such frame, it appears really hard to imagine how a society can have
money available for a technology which has been so far too expensive and by
many recognised as ‘unnecessary’ (Sofi, 2006).

Further verification of all these issues will come from the survey, the last part of
this research project, which will be discussed in the sixth chapter.

56
 5. Methodology

5.1. Overview

The methodology adopted to carry out the research project has partially followed
the framework outlined in the Dissertation Proposal.
However, the two interviews previously planned were not executed.
Also the number of online surveys has been reduced (from the initial two to
one), giving entire space only to the Italian mobile phone users.

The research framework consisted then in the examination of a case study and
the analysis of the results obtained throughout an online survey, thus following a
both qualitative and quantitative pattern, and a deductive method of
investigation.

5.1.1. Rationale behind the choice of the research method

The restrictions applied to the original methodology framework presented in the

Dissertation Proposal have not been casual. Such choice has been made in order
to concentrate the research on the core aspects of the subject. Conducting
another survey on a Japanese sample would not have had fundamental
implications with the research questions established prior to the research.

The research has consisted, as stated above, in one case study and one online
survey, but has first formed its basis on literature.
Literature review has helped to create a solid background necessary for the full
understanding of the topic, gathering information from previous research,
theoretical insights and updated content. In addition to this, literature has been

57
fundamental for the specific solutions adopted within the research process (e.g.
choosing the sample and the object of the case study).
The utilisation of both qualitative and quantitative methods has been preferred to
choosing just one of the two patterns. Choosing both methods has increased the
accuracy of the final results, enhancing the value of the research itself.
Considering the nature of the subject in question, using a deductive pattern has
been almost obligatory. That is, the research needed to start from the creation of
a knowledge background (because of the complexity of the topic). Then, the case
study was seen as a supportive way to literature in order to obtain more
qualitative information. Examining the best example of m-Commerce
implementation has enabled the extraction of the key aspects that drove to the
success in Japan. In turn, such elements have constituted a logical framework
that was successively compared to the Italian socio-economic context. The
conclusions arisen from that stage of the research were than tested with the
online survey.
Variations in the methodology have been taken into account. For example, a
comparative case study might have been another option. However, the choice
has fallen only on the analysis of the most successful example of m-Commerce
service because, so far, no one else has obtained the same outcome. In a few
words, there would not have been a real term of comparison.
The online survey has been preferred to the interview, as it was planned
originally, because of two basic reasons.
First of all, directing an interview to a TLC professional would have given an
attestation coming from a specific point of view, different from the one which
actually refers to the potential users of Mobile Commerce services. From the
examination of the literature, the youth generation emerged as those who
determined the spread of mobile phones and might do the same for the m-
Commerce.
Lastly, the survey as a mere quantitative research tool has been, if compared to
the interview, more effective because it has enabled to reach a larger sample

58
more rapidly. In fact, the objective was to gather as many answers as possible, in
order to increase the value of the survey itself.

5.2. Overview of the case study

For the case study, as explicated in the section 1.2 ‘Organisation of the
Dissertation’, the choice has fallen on the Japanese major telephony provider
NTT DoCoMo and its system called i-Mode.
The launch of such model has definitely had a surprising and sensational impact
on the Japanese society, and the positive results obtained by NTT DoCoMo in
such market still indicate i-Mode as the best example of m-Commerce solution
ever implemented.

The analysis relative to NTT DoCoMo focuses on a full examination of the core
aspects of i-Mode’s business model, together with a comprehensive report
concerning the Japanese background pre/post i-Mode and a coherent review of
statistical data.
The last part of the case study ranks the most relevant reasons relative to the i-
Mode usage in Japan.

5.2.1. Resources employed for the case study

The information used to carry out the case study has been retrieved mainly from
books, but also from both online and offline articles. Statistical data were
extracted from books and official reports.

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5.3. Overview of the online survey

5.3.1. Survey tool employed

For the deployment of the survey an online survey tool has been chosen. Among
all the possibilities available on the Internet, the best solution was represented by
the Qualtrics’ ‘Surveyz!’, a tool which enables the creation, launch and
management of the results directly from the web, without installing any
software. The tool is available on the website:

www.surveyz.com

Subsequently and thanks to Qualtrics’ staff, the survey has been transferred over
the Qualtrics system, which offers a better interface for the management and
analysis of the results obtained.

5.3.2. Ethical issues

The anonymity of the participants has been granted, with the total respect of the
Data Protection Act of 1998 issued by the University of Sheffield and
concerning research regulation.

5.3.3. Sample

The choice of the sample has been made according to the analysis of the
literature relative to the development of mobile phones and Mobile Commerce.

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As already underlined in this study, the heavy users of mobile phones (both in
Italy and Japan) and of Mobile Commerce (in Japan) are young people. As a
result of this, the youth share of the Italian population has been selected as the
most interesting source of information with regards to the research aims and
issues. The age of the participants ranges from 10 to 30 years.
However, due to the small size of the sample, the results obtained from such
analysis must be considered only as a purely indicative source of information.
Therefore all the conclusions that will be expressed concerning the survey will
need to be investigated more deeply.

5.3.4. Composition of the survey

The creation of the survey has followed the research aims and objectives
presented at the beginning of the report. In general, then, the survey has been
built in order to answer the research questions presented in the introductive
chapter (see section 1.1 Research Aims and Objectives). However, the selection
of every single survey question has been undertaken exclusively according to the
elements derived from the literature examination. In fact, the logical pattern of
the survey generally reflects the logical framework of the research, outlined in
the second chapter.

The survey is made up of 33 questions in total. Of the first 28 questions, 8 are

yes-no questions, while the other 20 are multiple choice questions. The last 5
questions compose the final part, relative to demographics.

The survey can be subdivided in four core areas:

• the first part, from the question 1 to the question 4, regards broadband
and e-Commerce penetration

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 • the second part, from the question 5 to the question 13, concerns the use
of mobile phones
• the third part, from the question 14 to the question 28, is relative to
mobile commerce
• the demographics, from the question 29 to the question 33

The analysis of the demographics in relation to the m-Commerce diffusion

appears to be particularly relevant. Specifically, age, income and occupation are
said to influence user’s behaviour in term of technology/innovation adoption
(Vishwanatah and Goldhaber, 2003).

5.3.5. Delivery of the survey

In order to be delivered to the specific target in question, the direct link to the
survey has been posted in a large number of Internet Italian forums relating to
mobile telephony. Each post included a presentation, in which the general aims
and objectives of the research were introduced, together with all the useful
information needed by the participants to carry out the questionnaire.

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 6. Survey outcome: evaluation of the results

6.1. Survey statistics

The survey reached a sufficient number of complete responses by nearly one

month after its launch.
Out of 181 participants that have started the questionnaire, 125 have completed it
successfully, mostly confirming the expectations reviewed in the previous
chapters of the report (in particular see section 4.5 Overview of the Italian
situation).

6.2. Discussion of the results

The presentation of the results will follow the four core parts outlined above in
the survey presentation, although giving precedence to the demographics.

6.2.1. Demographics

From the analysis of the demographics (table 1), male users turned out to be the
great majority among the participants (91.20%), with women resulting in a small
8.80%.
Looking at the age of the participants, the most pre-eminent age bracket has been
26-30 (46.40%), while 19-22 were 23.20% and 23-25 just 16.80%. The
remaining 13.60% was formed by people between 13 and 18 years old.
Considering the level of education, instead, the majority is constituted by people
who completed college, followed by bachelor (20.80%) and high school
(19.20%).

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 Table 1 Demographic characteristics of the respondents (n=125)

Demographic Characteristics %
Gender
Male 91.2
Female 8.8
Age
Between 10 and 12 0
Between 13 and 15 3.2
Between 16 and 18 10.4
Between 19 and 22 23.2
Between 23 and 25 16.8
Between 26 and 30 46.4
Level of education
High school 19.2
College 42.4
Bachelor 20.8
Masters 15.2
Masters II level 1.6
PhD 0.8
Employment
Unemployed 4.88
Student 53.66
Freelancer 11.38
Full time employee 27.64
Part time employee 2.44
Monthly income (in €)
Between 0 and 400 44
Between 400 and 750 7.2
Between 750 and 1000 14.4
Between 1000 and 1500 20
Between 1500 and 2000 10.4
Over 2000 4

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Focusing on occupation, more than half of the users were students (53.66%),
with full time employees and freelancers right behind them.
These figures obviously affected the results of the last question, which regarded
the monthly income of the participants. 0-€400 was the most hit solution (44%).
Finally, the 20% of the users gains between €1000 and €1500, while the 14.40%
of the participants earn between €750 and €1000.

6.2.2. First part: broadband and e-Commerce

This section regards the survey questions 1, 2, 3 and 4. Such questions aimed at
finding out how popular the broadband connection is and the participants’ habits
in relation to the Electronic Commerce.
Broadband connection emerged as extremely popular among the participants,
with a striking percentage of 91.16% (fig. 6.1).

Figure 6.1 SQ1: Do you have a broadband connection at home?

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Also Electronic Commerce resulted to be a very common practice within the
Italian people selected. The 76.24% of the participants to the survey, in fact,
asserted that they have made purchases online in the last 6 months (fig. 6.2).

Figure 6.2 SQ2: Have you purchased products or services through the Internet for
your personal use during the past 6 months?

When asked to specify what they have purchased most (fig. 6.3), the participants
have indicated their preference for computer (28.39%) and technological
equipment (26.81%), while books, music, information and financial services,
clothing and other ranged between 5.05% and 12.93%.

Figure 6.3 SQ3: What type of goods or services did you purchase?

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Obviously, these last details have a reflection on the expenditure made by the
participants (fig. 6.4). The majority of them, in fact, have spent over €100
(66.42%) in the past 6 months, while the lowest share (at least €25) has been
reached by the 11.19% of the people.

Figure 6.4 SQ4: How much did you spend on these items in the past 6 months?

6.2.3. Second part: the role of the mobile phone

This subdivision is composed by the survey questions 5, 6, 7, 8, 9, 10, 11, 12 and

13. Again, the aim here is to analyse the role of the mobile phone within the
Italian users, with a peculiar stress on the most used mobile phone features.
Within this sphere, particular attention is directed to the participants’ relationship
with mobile Internet.

The majority of the users who responded to the survey, affirmed to own one
mobile phone (44.57%). However, surprisingly, the second major share of users
(31.43%) owns more than two mobile phones, while the 24% has at least two
(fig. 6.5). This outcome is relatively astounding, actually. In fact, it appears a

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further confirmation of the huge penetration of mobile phones in Italy discussed
before.

Figure 6.5 SQ5: How many mobile phones do you own?

Equally surprising is the share of the monthly income normally spent by Italian
users for their mobile phone usage (fig. 6.6). The large majority (80%) usually
does not spend more than 10% of their income, while the 16% of the users do
not go beyond the 40%. Only a percentage around the 4% destines more than
50%.

Figure 6.6 SQ6: What percentage of your monthly income do you usually destine to
mobile phone usage? (percent)

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When asked about the way they use their mobile phone (fig. 6.7), users gave
particular relevance to voice calls (17.23%), SMS (16.73%) and taking pictures
(12.67%). Emailing, the most popular function among Japanese users, is
employed by just a very small share of the participants (3.66%). Interestingly,
three out the four features that scored around 8% (mobile gaming, listening to
music, video recording and MMS) and stay right behind the three most used
functionalities, represent mobile functions that do not require any cost.

Figure 6.7 SQ7: What do you use your mobile phone for?

Nevertheless, when asked to choose among the functions they use the most (fig.
6.8), the participants’ answers have been unanimous: nearly the 3 users out of 4
prefer voice calls (33.58%) and SMS (35.52%), while the third place is occupied
by camera (11.68%). Going back to emailing, it is easy to note how unpopular it
is among the Italian users. In fact, the actual use of emailing corresponds to a
very small percentage (1.46%).

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Figure 6.8 SQ8: Which of those functions do you use the most?

Talking about how Italian users usually exchange content stored in their mobile
phone with other people (fig. 6.9), Bluetooth got the largest preference (56.68%),
but also exchanging files via PC has obtained a good response (28.11%). The
element emerging here is again cost. According to this response, in fact, users
show their preference towards cheap solutions (which might not be comfortable
sometimes), rather than those ones who require ‘avoidable’ expenditure.

Figure 6.9 SQ9: How do you usually exchange the files stored in your mobile phone
with other people?

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With regards to mobile Internet (fig. 6.10), instead, 3 users out of 5 declare to be
interested in such technology (62.13%). On the other hand, relatively large is the
percentage of users that do not find it attractive (28.40%).

Figure 6.10 SQ10: Do you find interesting the possibility to use the Internet from
your mobile phone?

Among those who responded positively, the 13.86% declares to use mobile
Internet every day, while the 16.83% more than once a week (fig.6.11).
However, the largest part is constituted by those who use mobile Internet very
rarely (29.70%) and never (24.75%). Considering that, it follows that although
interested, nearly the 50% of the participants refrain from surfing the Internet
from their mobile phones for some reason.

From the analysis of the responses given by those who are not interested in
mobile Internet or have not a definite opinion, instead, the economic factor
resulted again dominant (fig. 6.12). Cost, in fact, has been suggested as the main
reason for not choosing mobile Internet (34.62%); connection speed and
usefulness also have an important relevance in user’s opinion, respectively with
the 20% and 17.69%. Curiously, security and privacy accounted for a total 10%
of responses.

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Figure 6.11 SQ11: If yes, how often do you connect to the Internet via your mobile
phone?

Figure 6.12 SQ12: If not or not sure, please indicate the most important factors
that influence your opinion.

The answers to the question 13 (fig. 6.13), instead, confirmed the importance of
the mobile phone as a communication tool which helps improving interaction
with friends (41.88%). That is according to the Italian users the main purpose of
mobile phone utilisation. However, mobile phones are also seen an instrument
which enhances coordination of the daily activities (30.77%). Fashion, indicated

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as a very influencing factor especially among teens, was seen relatively
significant in this case, with a score of 12.82%. Within ‘other’ (7.69%), instead,
the majority of the answers given by the participants remind to the
communicative function of mobile phones and the comfort connected to the
possibility of simplifying coordination.

Figure 6.13 SQ13: What do you think the main aims and motivations associated to
the purchase of a mobile phone are?

6.2.4. Third part: the diffusion of the m-Commerce

This part is the largest one in the survey and covers the questions from 14 to 28.
The goal here is to understand how Mobile Commerce is perceived within the
mobile phone heavy users, what driving factors are connected with its present
adoption and what its future perspectives in the Italian market are. Also, two
specific questions concerning the popularity of 3G mobile phones have been
submitted.

Precisely, the diffusion of 3G mobile phones is what the question 14 aims at

finding out (fig. 6.14).

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Out of 159 respondents, 101 (63.52%) answered positively. It certainly
represents a notable percentage. However, the opinion of those 58 which
represent the 36.48% that do not own a 3G mobile phone reflect, somehow, the
current situation in Italy, where still a great part of the population still do no
think that shifting to the third generation is needed.

Figure 6.14 SQ14: Do you have a 3G mobile phone?

This opinion is corroborated by the results obtained with the question 15.
Of those 58 that do not own a 3G mobile phone yet, the majority (38 people,
65.52%) still confirm their intention not to buy one (fig. 6.15), attributing to the
high cost of the services (54.05%) the most valid reason for not switching to the
third generation (fig. 6.17).
This element is also present in the second motivation chosen by the participants:
it is more convenient to find cheaper methods for getting the information they
require or exploiting the services they need (32.43%), rather than spending
useless money with 3G services. Finally, the quality of the services is not
considered a problem for mobile users (8.11%), and even less concern there is on
security (0%).

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On the other hand, the remaining 20 people (34.48%) would take into
consideration buying a 3G mobile phone, symbolising a mild interest towards
such sphere of the mobile telephony.

Figure 6.15 SQ15: If no, would you be interested in buying a 3G mobile phone?

Moreover, among those users which would buy a 3G mobile phone (fig. 6.16),
the great majority (70%) would also be keen on using 3G services, while the
20% declares to be unsure about that.

Figure 6.16 SQ16: If yes, would you be interested in using 3G services?

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Figure 6.17 SQ17: If no, what would be the main reason?

When asked to express how they would define their level of knowledge
regarding m-Commerce, the participants gave answers more or less balanced
(fig. 6.18). The largest share is represented by those who have minimal
competence (25%), followed by those who are sufficiently aware (17.95%),
those who have comprehensive (16.67%) and vague knowledge (16.03%).
Considering instead the two extremes, the most skilled ones account for the
7.69%, while those who are totally new to mobile commerce represent the
16.67% of the participants.

Figure 6.18 SQ18: Please state your own level of knowledge regarding mobile
commerce

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The partial lack of competence in relation to Mobile Commerce is partially
reflected in the actual practice of purchasing goods or services via mobile phone
(fig. 6.19).
Four people out of five (80.77%) have never made any purchases through their
mobile phone. This striking datum demonstrates how still far such practice from
the Italian people’s habits is.

Figure 6.19 SQ19: Have you ever used your mobile phone to purchase any goods or
services?

However, considering the answers provided by those users who have purchased
goods or services via their mobile device (fig. 6.20), mobile Internet and mobile
gaming are among the most popular purchases, respectively with 14.68% and
13.76%.
Apart from these two top ones, the remaining choices are pretty balanced,
ranging from 1.83% of community chat to 10.09% of credit card services.
An interesting score has been achieved by the category indicating
localisation/maps services and emailing (9.17%). Video telephony, instead, the
core product of the principal Italian 3G provider, obtained only 8.26% of the
total favours.

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Figure 6.20 SQ20: If yes, which goods or services did you purchase/use?

Among those who have never purchased via mobile phone (19.23%), the
majority finds cost (25.91%) the most relevant explanation for their behaviour
(fig. 6.21).

Figure 6.21 SQ21: If no, please indicate the reasons why you have never done it
before

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Also the lack of competence (seen as lack of promotion and lack of knowledge)
occupies a sizeable percentage, with a total 32.39%.

Comparing to the results referring to the mobile Internet usage, concern on

security has nearly the same prominence (7.69%), renewing that users are do not
trust mobile phone services that would require the input of their personal data.
Within the category ‘other’, in general Italian users have reasserted that it is safer
and cheaper to use other means, while a few users have stated that a further
element is related to the ‘uncomfortable’ features of the mobile phones currently
on the market.

Subsequently, participants were asked to express which goods or services they

would purchase if they had the chance (table 2).

Italian mobile phone users have shown remarkable interest in the eventuality of
booking tickets or seats, maps (GPS) and location based services, email and
mobile Internet.

Average interest has been shown towards general information services and video
telephony.

Very mild involvement has instead characterised the choice towards credit card
services and music streaming and downloading.

Finally, no interest has been shown for gambling, sporting services, mobile
games, ringtones and community chat. With regards to these last options, the
values of the standard deviation of each element suggest that the opinion of the
users has been particularly unanimous.

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Table 2 SQ22: If you have never purchased any goods or services via your mobile
phone, which of the following services would you intend using?

1= absolutely no 2= slightly interested 3= not sure 4= interested 5= very interested

Mean Standard deviation Most hit value

Booking tickets/seats 3 1.5 4
Credit card services 3 1.6 1
Gambling 1 1 1
Sporting services 2 1.2 1
Mobile games 2 1 1
General info 3 1.5 1
Maps (GPS) 4 1.4 4
Ringtones 1 0.5 1
Community chat 2 1 1
Video telephony 2 1.4 1
Music streaming/downloading 2 1.4 1
Email 4 1.5 5
Mobile Internet 4 1.4 5

The next question shifted the attention to the possible medium through which
users could receive information about m-Commerce and mobile services (table
3). Participants had to rank 7 different channels from 1 (highest score) to 7
(lowest score).

Considering all the solutions proposed, only websites registered high consensus.
Furthermore, SMS, TV, printed matter and email/newsletters all obtained an
average score.
Finally, radio and billboards got the lowest percentage of favour among the
sample selected.

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Table 3 SQ23: Please state, in order of preference, the medium by which you would
prefer to receive information about Mobile Commerce and mobile services

Score range (from 1 to 7) : 1 = Highest, 7 = Lowest; number of hits (percent)

1 2 3 4 5 6 7
SMS 26.12 12.69 5.22 11.94 2.99 15.67 25.37
Websites 32.84 25.37 11.94 8.96 7.46 7.46 5.97
TV 13.43 12.69 18.66 14.93 16.42 11.94 11.94
Radio 2.99 7.46 17.16 17.91 23.88 17.16 13.43
Billboards 5.22 10.45 11.94 15.67 21.64 11.94 23.13
Printed matter 6.72 17.91 13.43 22.39 18.66 18.66 2.24
Email and newsletters 12.69 13.43 21.64 8.21 8.96 17.16 17.91

After that, users were asked to state which factors they think are most relevant
for using a Mobile Commerce service (table 4).

Table 4 SQ24: Please indicate the importance of the following factors in using a
particular m-Commerce service

1= no importance 2= slightly important 3= not sure 4= important 5= highly important

Mean Standard deviation Most hit value

Cost 5 1 5
Ease of use 4 1.2 4
Transmission speed 4 0.9 5
Privacy 4 1 5
Connection quality 4 0.9 5
Richness of content received 4 1.1 5
Security 4 0.9 5
Usefulness 4 1 5

In general, all the factors have been considered important. Some of them,
however, have been portrayed as critical: it is the case of cost, privacy and
security.Slightly less importance is given to all the other elements in question,
specifically ease of use, transmission speed, connection quality, richness of

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content and usefulness. Lastly, the opinion regarding every single element in
question resulted to be shared by the great majority of the participants, as
indicated by the standard deviation.

Subsequently, question 25 asked the mobile phone users to state how they would
spend their mobile credit if choosing among communication, entertainment,
financial and location-based services (fig. 6.22).
Following the indications gathered so far, communication services confirmed
their preponderance (53.75%). After that, the three other categories collected a
balanced preference, with entertainment services occupying the last place.

Figure 6.22 SQ25: How would you spend your mobile budget given the following
services?

The last set of questions regarding Mobile Commerce directed the attention to
the Japanese scenario (fig. 6.23).
Participants were asked their opinion about the possibility Italy has of becoming
a country where mobile phones will have more and more power, up to replace
credit cards.
The largest share of them showed a positive opinion (55.56%), denoting ‘great
trust’ in mobile technology.

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Figure 6.23 SQ26: In Japan it is possible to use a mobile phone to purchase more
and more goods and services like with a credit card, pursuing a policy that will
bring Japanese people to completely ‘replace their wallet’ in a very short time. Do
you think it to be a good perspective also for the Italian scenario, even if in a longer
term?

To those people who declared to be not sure (19.05%), then, it was asked to
indicate which factor they believe to be more pre-eminent in that case (fig. 6.24).
According to them, an extremely safe system would be the principal key for a
positive result (45.83%). Cost was then pointed out as the second factor (25%),
while finding benefits from such a perspective was selected by 1 users out of 5
(20.83%).
Less importance was given to the fact that such change would be radical
(8.33%), stating that Italians would get used without any particular worries to
those new practices.

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Figure 6.24 SQ27: If not sure, please indicate which of the following the most
influent factor is in this case

Those users who were more categorical and affirmed that such perspective
would not be applicable to the Italian context (fig. 6.25), stated that the major
motivation would lay in the fact that it represents an eventuality too distant from
the Italian culture (40.63%). The 21.88% of the participants stated both that they
would not have any improvement and that it is much better to maintain the actual
distinction between mobile phones and credit cards. Finally, fewer concerns are
directed to risks connected to security and privacy (15.63%).

Figure 6.25 SQ28: If not, please indicate why

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 7. Discussion

The results obtained with the online survey generally reasserted the
considerations made after the evaluation of the literature and the analysis of the
case study.
The sample targeted has confirmed a strong penetration of mobile phones: more
than the 50% of the users interviewed owned at least 2 mobile telephones, a
percentage that ‘justifies’ Italy’s second place in mobile phone diffusion and the
hopes for a future wide embracement of the Mobile Commerce.

However, Italians do not seem very keen on considering mobile phones beyond
the sphere of communication yet. As anticipated in the previous sections, in Italy
the mobile phone is a tool connected to many elements (many of them cultural),
but what it actually represents is reassumed in Fortunati’s thought: the mobile
phone has been successful because it has been proposed as an easy-to-use toy,
viewed, in terms of communicative functions, as an extension of the wired
phone.
The results concerning the survey question 8 have clearly highlighted this view:
Italians use their mobile phone almost only to make voice calls and interact via
SMS. Nearly the 70% of the participants have responded in that direction, a huge
confirmation of the communicative importance of the mobile phone, which gets
even more meaningful if compared to the myriad of functions that users have
now at their disposal.
However, the employment of the other mobile phone features is characterised by
a constant common denominator: the avoidance of charges. This factor is also
recognisable in the daily practice: beeping phenomenon, as underscored by the
literature, and utilisation of cheaper strategies like transferring content via
Bluetooth or pc (highlighted by the survey) instead of, say, MMS, all renew the
same concept.

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The economic factor has then emerged powerfully within the mobile phone
utilisation sphere, as also revealed by the amount of monthly income that the
users who responded to the survey destine to their telephone utilisation.
Since the heavy users of mobile phones in Italy coincide with people with a low
purchasing power (due to many reasons, but mostly to the objective difficulties
in finding a valid job, an aspect directly connected to the individual’s separation
from the family circle and the subsequent creation of the own independence),
cost can be easily reckoned as the most relevant factor not only in this context,
but in the every day life indeed. And in 2003, when H3G launched the first m-
Commerce solution, such aspect has obviously increased its emphasis, seen the
high price for both handsets and mobile services.
Nevertheless, cost has not been the only obstacle in the further development of
mobile telecommunications in Italy so far.
Strictly connected with what has been just said above about H3G, also the
creation of a proper network infrastructure should have been one of the absolute
priorities. In Japan, that choice revealed to be extremely on the beam. Logically,
in fact, it is impossible for a product or service to hit if it is not provided
efficaciously.
That seems to be one of the biggest mistakes made in Italy: only now, many
years after the m-Commerce boom in Japan, Italy has reached an almost
complete coverage of its territory.
Infrastructure has also affected the quality of the services (most of them have
relied on slow connections up till a very short time ago), which has been an issue
that users have always taken into account.
Additionally, the conception of the Internet is still anchored to the wired
experience. Users associate the navigation of the web exclusively to a desktop
pc, and that is not a surprise. Browsing the Internet from a mobile phone should
be conceived as a different experience. In Italy, however, it is just seen as an
‘uncomfortable’ way to perform the same practice; huge limitations of the
handsets, lack of complete network coverage, cost, usefulness etc. all contribute
to the slow separation of mobile phones from the mere communicative area. As

86
Scifo underlined, Italians perceive the mobile phone as communication
instrument, while the Internet as a domestic practice: two different experiences
which do not seem to find a connection in any way yet.
The establishment of 3G telephony and m-Commerce is directly influenced by
this situation. Why should people pay for services that can be obtained in
different ways, sometimes more comfortably and at cheaper prices? In a country
where 3G data prices are seven times more expensive than Japan (OECD, 2007),
a scenario of this kind is fully comprehensible.
To a broader extent, the perspective of using the mobile phone as an electronic
wallet resulted to be fascinating to many, but at the same time absolutely utopian
to many others.
As a large number of users stated in the survey, that one would be a solution
extremely bound to a set of assurances in terms of security and privacy and, in
general, to a safe system which is too far from the one existing at the moment.
For others, instead, it is a view that does not coincide with the Italian culture at
all.
If we think about the ‘technophobia’ typical of the Italian people discussed by
Fortunati, that aspect does not represent a surprise either. The slow diffusion of
the e-Commerce also configures in the same context, testifying Italians’
hesitation towards technology.

On a broader perspective then, if we compare the Japanese TLC development to

the situation in Italy, many divergences crop out.
In Italy, fundamentally, the lack of a ‘mobile culture’, on the model of the one
present in Japan prior to the mobile phone establishment, has not been supported
by the cultural features proper of the Italian society with regards to the m-
Commerce embracement. Culture, however, which has been the driving factor
for its diffusion at the beginning as a tool that enhances the management of
relationships, now is restraining its evolution.

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In any case, the sensation is that this slow process will finally bring to the
embracement of the Mobile Commerce, although the current constraints.
Users can now choose among a pretty wide range of services, but mobile
providers will need to convince their customers with specific policies, based on
low costs and high quality of the services, following the pattern promoted
throughout the enhancement of competitiveness by the major organisations of
the TLC and economic sectors, and now even by governments.
As noticed by many analysts (Abacus.it, 2003; PassioneMobile, 2006), the new
TLC technology will definitely occupy a dominant place in the next future,
around the 2010.
In the meantime, what the main actors in the mobile telephony scene have to do
is to solve the core issues that still make doubtful the majority of the Italian
users, in order to create that safe and affordable system they are rightly invoking.

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 8. Conclusions

Starting from a full analysis of the impact of mobile phones, both from the
verbal and non-verbal communicative point view, Italy configured as one of the
best scenarios for the current and future evolution of the TLC sector.
With a level of penetration that has gone beyond the 100%, the mobile phone
can be easily defined as the most popular tool within the Italian society.
Teenagers, in particular, have embraced it extremely quickly, so to be defined
the real heavy users of such instrument.
Many are the factors linked to its owning and utilisation: in general, the mobile
phone represents a tool that enables the personal expression, both verbally and
non-verbally.
In fact, the mobile phone user ‘shapes’ its device according to its own
personality, transforming it into a symbol of his way of being, right as fashion
does.
However, due to cultural and technical factors, the figure of the mobile phone is
struggling to find a place outside the mere communicative context, as something
that might mean more than just an instrument for the management of the
relationships.
And right among the core factors that are influencing the growth of the
telecommunications sector in Italy, the importance of relationships is surely the
most significant cultural element that is limiting such process. People, in fact,
consider the mobile phone an extension of the wired telephone, enriched by
further and sometimes ‘useless’ functions. Another cultural aspect is the well-
known lack of proneness towards technology, which gets enormous proportions
when the technology itself ‘risks’ to undermine ticklish areas like security and
privacy.
Among the technical factors, instead, several elements emerged in the Italian
context as core ones in relation to the mobile telephony evolution.

89
Cost can be deemed as the most influent element in Italian users’ decisions. The
price of the new handsets, those which enable a better fruition of the m-
Commerce services, have started to decrease only for a short time, while the
costs connected to the new mobile products and services are still seen as too
expensive.
Therefore, users tend to bypass the charges connected to the new practices,
simply adopting different (but not less efficacious) methods.
Moreover, the analysis has stressed how the infrastructure has contributed to
limit the mobile services diffusion and, combined to costs, has configured as an
unworthy compromise to the majority of the Italian users of mobile phones.
Additionally, the slow diffusion of broadband (which might be justified with the
small proneness towards technology) and Electronic Commerce has not
‘educated’ the Italians towards such a close concept like the m-Commerce,
which has been suddenly projected into a market that was not ready to fully
‘appreciate’ and embrace it.

Nevertheless, the future outlook is bright. In fact, from the research conducted it
emerged that the new telecommunications generation will only need a few more
years in order to conquer the Italian dimension.
The measures adopted in this direction lead to think that the way undertaken is
the correct one, and that with the contribution of all the main actors of the mobile
telephony scene, especially for what regards core issues like security, privacy,
promotion of the services and cost, it is just a matter of time for the Mobile
Commerce to become reality even in the Italian context.

This research project has tried to cover all the most relevant aspects connected to
the Mobile Commerce situation in Italy, aiming at discovering what the core
motivations for its slow penetration are.
The analysis of literature, a case study and the results obtained throughout an
online survey has provided valid answers in relation to these issues.

90
However, due to the extreme complexity of the topic and the evident limitations
of the analysis conducted, further investigation is needed in all directions in
order to better understand the dynamics of the m-Commerce phenomenon.

(19973 words)

91
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Appendix A: Original Version of the Survey

101
102
103
104
105
106
107
108
109
110
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112
Appendix B: Translated Version of the Survey

1) Do you have a broadband connection at home?

Answers: yes, no

2) Have you purchased products or services through the

Internet for your personal use during the past 6 months?
Answers: yes, no

3) What type of goods or services did you purchase?

Answers: books, music, computer equipment, technological
equipment (mp3 players, mobile phones, TV, etc.),
information/financial services, clothing, other

4) How much did you spend on these items during the past 6
months?
Answers: less than €25, €26-€50, €51-€75, €76-€100, more
than €100

5) How many mobile phones do you own?

Answers: 1, 2, more than 2

6) What percentage of your monthly income do you usually

destine to mobile phone usage?
Answers: 10% or less, 20%-40%, 50%, 60%-90%, 100%

7) What do you use your mobile phone for?

Answers: voice calls, SMS, MMS, mobile Internet, email
sending/receiving, listening to music (e.g. mp3), recording

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 videos, taking pictures, ringtones (periodical selection of),
play games, community chat, other

8) Which of those functions do you use the most?

Answers: voice calls, SMS, MMS, mobile Internet, email
sending/receiving, listening to music (e.g. mp3), recording
videos, taking pictures, ringtones (periodical selection of),
play games, community chat, other

9) How do you usually exchange the files stored in your

mobile phone with other people?
Answers: MMS, Bluetooth, email, via PC

10) Do you find interesting the possibility to use the Internet

from your mobile phone?
Answers: yes, no, not sure

11) If yes, how often do you connect to the Internet via your mobile
phone?
Answers: every day, more than once a week, once a week, a few
times a month, extremely seldom, never

12) If not or not sure, please indicate the most important factors that
influence your opinion (tick more than one if needed)
Answers: knowledge concerning the service, security, privacy, ease
of use, cost, connection speed, usefulness, other

13) What do you think the main aims and motivations associated to
the purchase of a mobile phone are?

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 Answers: it enables better communication with peers, it enables
better communication with the family, it enhances coordination, it
is a symbol of fashion and ‘personal’ style, other

14) Do you have a 3G mobile phone?

Answers: yes, no

15) If no, would you be interested in buying a 3G mobile phone?

Answers: yes, no

16) If yes, would you be interested in using 3G mobile services?

Answers: yes, no, not sure

17) If not, what would be the main reason?

Answers: the quality of the services would not satisfy me; the cost
of the services would be too high if compared to the actual use I
would make of them; I can find cheaper ways to obtain the
information I need or to get access to the services I prefer; 3G
services are not secure: I think that my personal data would lay on
the line; other

18) Please state your own level of knowledge regarding mobile

Commerce
Answers: highly skilled, comprehensive, aware, vague, minimal,
null

19) Have you ever used your mobile phone to purchase any goods or
services?
Answers: yes, no

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20) If yes, which goods or services did you purchase/use?
Answers: booking of tickets/seats, credit card services, gambling,
sporting services (goals, highlights etc.), mobile games, general
info (weather, traffic, news, events etc.), maps (GPS), ringtones,
community chat, video telephony, music streaming/downloading,
email, Internet, other

21) If no, please indicate the reasons why you have never done it
before (you can choose more than one option)
Answers: lack of knowledge, cost, low ease of use, security
reasons, low usefulness, connection quality, lack of promotion,
other

22) If you have never purchased any goods or services via your
mobile phone, which of the following services would you intend
using?
(Level of interest range: absolutely no, slightly interested, not sure,
interested, very interested)
Answers: booking of tickets/seats, credit card services, gambling,
sporting services (goals, highlights etc.), mobile games, general
info (weather, traffic, news, events etc.), maps (GPS), ringtones,
community chat, video telephony, music streaming/downloading,
email, mobile Internet

23) Please state, in order of preference, the medium by which you

would prefer to receive information about Mobile Commerce and
mobile services
(Range: 1 – Highest / 7 – Lowest)
Choices: SMS, websites, TV, radio, billboards, printed matter,
email and newsletters

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24) Please indicate the importance of the following factors in using a
particular m-Commerce service
(Level of importance range: no importance, slightly important, not
sure, important, highly important)
Choices: cost, ease of use, transmission speed, privacy, connection
quality, richness of content received, security, usefulness

25) How would you spend your mobile budget given the following
services? (the total of all answers must add up to 100)
Answers: communication (e.g. SMS, MMS, email), entertainment
services (music streaming/downloading, films, highlights, TV),
financial services (online shopping, banking, online booking),
location based services (roadmap, restaurant/cinema reservations)

26) In Japan it is possible to use a mobile phone to purchase more and

more goods and services like with a credit card, pursuing a policy
that will bring the Japanese people to completely ‘replace their
wallet’ in a very short time. Do you think it to be a good
perspective also for the Italian scenario, even if in a longer term?
Answers: yes, no, not sure

27) If not sure, please indicate which of the following is the most
influent factor in this case
Answers: only if the Italian users would be gradually educated to
such a radical change; people would need to rely on a safe system
which is too far from the one existing now; it will depend on the
costs of such a technology; only if people will find this new
perspective a great source of benefit

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 28) If not, please indicate why
Answers: it is a perspective that does not go along with the Italian
culture at all; people would not embrace this possibility as there
would be too many risks connected to security and privacy; it is
better to keep the distinction between mobile phones and credit card
based on their original purposes; I do not think that that type of
innovation would improve our life

29) Please select your gender

Choices: male, female

30) What is your age bracket?

Answers: 10-12, 13-15, 16-18, 19-22, 23-25, 26-30

31) What is your level of education?

Answers: high school, college, bachelor, masters, masters II level 8 ,
PhD

32) What is your occupation?

Answers: unemployed, student, freelancer, full time employee, part
time employee

33) What is your monthly gross income?

Answers: 0-€400, €400-€750, €750-€1000, €1000-€1500, €1500-
€2000, over €2000

8
University rules in Italy have changed not so much time ago; so many people would still refer to the
old system. Additionally, two types of masters are available (master di primo e di secondo livello)

118
Appendix C: Introduction to the Survey

Ciao a tutti!

Mi chiamo Roberto, ho 26 anni e sono iscritto alla University of Sheffield

(UK) dove sto per terminare un master in Multilingual Information
Management. Manca ormai solo la tesi, finalmente!
L’ obiettivo della mia tesi di ricerca e’ quello di scoprire le principali ragioni
che riguardano la lentissima evoluzione relativa al Mobile Commerce (cioe’ la
possibilita’ di acquistare beni e/o servizi tramite il proprio cellulare) in Italia,
esaminandone la situazione odierna e raffrontandola con altri paesi in cui l’m-
Commerce e’ ormai una realta.
Prendendo a modello il Giappone, l’esempio migliore in questi termini dove e’
possibile utilizzare il proprio telefono cellulare a mo’di carta di credito per
avvalersi di sempre piu numerosi servizi, la mia indagine tocca principalmente
gli aspetti socio-culturali ed economici di tale fenomeno.
Per ottenere delle risposte credibili a supporto della mia analisi, ho deciso di
utilizzare un questionario online da rivolgere a tutti coloro che facciano uso di
un cellulare (chi non ne ha almeno uno oggigiorno!?), dal momento che solo
gli utenti italiani possono confermare quanto da me sinora ottenuto e ipotizzato
attraverso statistiche e letteratura.

Il sondaggio, che si rivolge a tutti coloro utilizzino un cellulare e abbiano tra i

10 ed i 30 anni, e’ assolutamente anonimo e pertanto non presenta alcun
rischio relativo a privacy e sicurezza. E’ stato realizzato sul sito Surveyz.com
ed e’ costituito da 28 domande a risposta multipla. Dategli un’occhiata, vi
rubera’ al massimo 5 minuti.
Potete dunque stare piu che tranquilli! Cliccate sul link qua sotto e verrete
portati direttamente alla prima pagina del sondaggio.

http://www.surveyz.com/TakeSurvey?id=72184&responseCheck=false

Vi ringrazio anticipatamente per la collaborazione!!!

Roberto

P.S. Qualora aveste commenti o suggerimenti da proporre, scrivete pure, mi

sarete senz’altro d’aiuto!

119