Targeting the next mobile sweet spot

1 Feb 2007

More than 70 Irish software firms recorded annual revenues of €200m in 2005 trying to crack a €900bn global telecoms market, says Jennifer Condon, head of software and emerging markets at Enterprise Ireland.

This, she says, is a very young sector with the majority of companies trading less than five years. “Ireland has had a strong tradition in the telecoms arena with the legacy of companies like Siemens, Ericsson and Aldiscon, from whom there were many spin-off companies.”

This is a market that she predicts is set to widen in the years to come with the interest of major media companies like Warner and Universal in TV over mobile and broadband as well as new generation web companies like YouTube and MySpace translate themselves to a handset near you.

This year Enterprise Ireland is bringing 18 Irish firms to the 3GSM World Congress in Barcelona, regarded as the world’s most important event for mobile and fixed broadband.

Every year a new topic raises the ante at this event as companies try to identify the next industry sweet spot and this year the focus is heavily on mobile TV and entertainment.

Standards such as DVB/H (digital video broadcasting over handheld) attract millions of euro of investment by operators and are set to be exploited by media companies. In Ireland both 3 and O2 are rolling out DVB/H services.

According to Enterprise Ireland, as mobile TV handset capability increases, revenue opportunities exist for operators and media firms to further exploit such areas as games and music. In the UK, revenues from ringtones alone have already surpassed CD single sales.

Research by the state agency suggests the market for mobile content and multimedia could reach €100bn and upwards, whilst the value of the global telecoms market will grow from €900bn to €1trn next year.

Irish telecoms companies targeting the communications industry are distinguished in particular by their blue-chip client lists and by the innovative nature of their technology.

Dublin firm Cicero Networks is one of the companies attending 3GSM in Barcelona with Enterprise Ireland in the next fortnight. The company develops wireless voice over internet protocol product, focusing heavily on areas like Wi-Fi and winning deals with companies in Europe and Asia as well as forging alliances with Nokia and HTC.

The company was at the World Economic Forum (WEF) in Davos last week where it joined Napster and Google as among the 47 hottest technologies identified by the company’s panel of experts.

The company’s chief executive Ross Brennan explains: “There was a belief that the world was going cellular and the traditional fixed-line business was going to come to a full stop. But the way it is going is that operators are targeting revenues from fixed and mobile.

“Irish companies targeting this sector are doing well and punching way above their weight. Because a lot of the innovation around mobile happens in Europe it is easier to be based in Dublin to sell to the mobile industry than be based somewhere like Silicon Valley,” says Brennan.

Another Dublin-based company NewBay Software, headed by Paddy Houlihan, has won major deals with T-Mobile in the US, Bell in Canada and Orange in the UK. It employs 60 people in Dublin and 10 people in Seattle.

“We are going through a very aggressive growth phase,” says Houlihan. “NewBay was founded as a user-generated content business and funnily enough it is user-generated content on sites like Bebo and MySpace that is taking the world by storm.

“The opportunity for Irish mobile software firms is bigger than most people realise. The sector itself can be quite easily defined by the fact that there are around 500 mobile operators worldwide. Out of these there are only 200 operators that really matter.

“But if you consider there are more than three billion mobile subscribers in the world the opportunity to help operators replace falling call revenues with compelling content is quite large.

“Out of the companies operating from Ireland, many are highly focused and are well versed in winning deals. The competition is international but the deals you can win in this sector are quite large.”

Earlier this week the importance of the mobile software industry in Ireland was underlined when Zamano revealed it was to go for a second stock listing on Dublin’s IEX market.

The very same morning it emerged that another mobile firm Vimio was selected to power the mobile TV element of Denis O’Brien’s Caribbean mobile network, Digicel.

For Evanna Kearins, head of marketing at Wicklow-based Valista, Irish mobile software firms are benefiting from the blurring of the lines between mobile and fixed-line broadband.

“We’re not just targeting mobile operators anymore. We’re very much seeing a huge target audience for Valista in media and entertainment companies. We will always target mobile operators but the movement of media towards communications is compelling.

“Our market has expanded from mobile operators to include gaming companies, newspapers, TV channels and music providers,” said Kearins.

“The edges between operators and media companies are becoming blurred,” confirmed Enterprise Ireland’s Jennifer Condon. “The success stories of Irish firms in the communications space went unreported over the years because they were focused on the back-end technicalities of billing and infrastructure.

“But when you add in content and bring media firms like Sony and other entertainment conglomerates into the equation then it becomes more understandable.

“Irish software firms in the communications space are targeting real market needs as opposed to technical services,” Condon concluded.

Irish firms attending 3GSM
Company Sector

Accuris – Fixed Mobile Convergence
Anam – Messaging
Arantech – Customer experience management
Asavie – Enterprise mobility
CAPE Technologies – Revenue assurance
ChangingWorlds – Personalisation
Cibinix – Mobile portals
Cicero Networks – Fixed mobile convergence
Macalla – Mobile commerce
MobileAware – Mobile data services
NewBay – Mobile data services
OpenMIND Networks – Messaging
Silicon & Software Systems – Mobile TV
Tango Telecom – Messaging
Trust 5 – Personalisation
Valista – Digital commerce over mobile
Vimio – Mobile TV
XIAM – Mobile content