Asia-Pacific mobile commerce, excluding Japan, is projected to become a US$12.4 billion market by 2005 from an estimated US$557 million this year, according to International Data Corp (IDC). The research firm said regional m-commerce activities were poised for major launches as operators unveiled next-generation mobile-phone network initiatives based on GPRS (general packet radio services) or third-generation (3G) wireless technologies. Rachel Lo, senior analyst for communications research at IDC Asia-Pacific, said the big m-commerce push in the region would happen next year when the bulk of GPRS handsets arrived, allowing GSM (global system for mobile) operators to package GPRS services to targeted customers. 'The early forms of m-commerce transactions are likely to comprise only low-priced items such as bus fares, train tickets, drinks, parking coupons and charges,' she said. Based on GSM, GPRS is a 2.5-gigabyte technology that offers packet-based wireless communications service at data rates from 56 kilobits to 114 kilobits per second and continuous Internet connection for mobile users. In comparison, 3G technologies offer wideband radio communications, with access speeds of up to two megabits per second. Present standards are based on either GSM or CDMA (code division multiple access) technology. M-commerce applications such as mobile banking, e-mail and downloading ring tones and graphics already are available with enhanced 2G networks. IDC said the market potential for m-commerce was tantalising, based on what South Korea's telecommunications sector had ac-complished. In 1999, Korea became the first Asian market to see wireless subscription numbers exceed wireline customers. It also has the highest level of broadband communications penetration in the world, with broadband access nearly 50 per cent cheaper than in Japan. IDC said Korea posted the highest penetration rate of mobile Internet, at 23 per cent, last year. It is projected to reach 43 per cent this year. The strong domestic phone-manufacturing industry has boosted the use of mobile Internet services in the CDMA-based Korean market. Ms Lo predicted m-commerce in the region would mature when the concept of the 'mobile wallet' was introduced. She said the mobile phone eventually would replace the credit card for conducting transactions. However, she said this would depend on commitment from operators. In Korea, the operators have assumed the middleman's role in settling m-commerce transactions. Enterprise applications would encourage co-operation between mobile operators, data centres and software providers, IDC said. Applications under discussion among operators, enterprises and systems integrators in Asia include inventory-tracking and logistics management. As for 'killer applications', operators are expected to offer a mix of mobile banking, remote diagnostics, games, shopping, music and multimedia messaging as part of services based on next-generation infrastructure. The research firm said a wide-ranging product offering would prove the most successful for operators crafting their m-commerce initiatives. Mobile operators are urged to focus on research and development or teaming up with content developers or application providers who can provide the products subscribers need. Research firm Ovum earlier predicted that winners in the wireless Internet market would be those that charged users for content. It said NTT DoCoMo's i-mode service in Japan was proof that the system worked. A business plan that hinged on paid content typically shared the content fees with the content provider and combined them with secondary revenue streams such as transactions and wireless marketing, said Ovum senior analyst Eden Zoller. 'The business model based on paid content is simple and transparent. Content providers know what they want and what revenues they will get,' she said. 'Users will pay for content that has a high perceived value, that is personalised and delivered in a format that suits their device of choice.' Such valued content includes information that has emotional or psychological pull, such as horoscopes, or is needed urgently, such as share-market quotes. The information must be delivered in a personalised, location-sensitive fashion to any device. Taking another approach to m-commerce strategy, Ovum recommended service providers offer a mixture of paid and free content from the start. This is expected to immediately instil a sense of value in the consumers' thinking - that content is worth paying for. This also would mean companies earned revenues from the start. A mixed content business offers free basic services while charging for more desirable, valuable premium content.