The New "Old" Caller ID?

Wireless Week –Monica Alleven – December 15, 2006 – In these days of picture and music ID, it may sound strange that some vendors are plugging a better form of caller ID for cell phone users. But that is exactly what some vendors say the industry needs to truly compete head-to-head with wireline phone services.

As wireless phones increasingly become the sole source of telecommunications in homes nationwide, the theory is consumers will expect the same level of caller ID as they are accustomed to in the wireline world. For wireline phones, caller ID is a wildly popular, albeit simple, feature for which consumers will pay $5 a month. Not so in wireless, where carriers pitched their watered-down versions of caller ID into calling plans early in the digital revolution without additional charges.

Sure, a subscriber can program his or her phone to show a picture of a friend who is calling, but if that subscriber has never spoken to the caller, he or she could be missing out on a new business or personal opportunity. So, why haven't wireless carriers offered more detailed caller ID information when the capability exists at the switch? The answers are varied, with customer privacy often cited as a barrier. Implementation costs, potential handset software issues and the reliability of connecting phone numbers accurately with names are factors as well.

MISSED OPPORTUNITY That's not stopping vendors from evangelizing the services, though. From VeriSign to Syniverse Technologies and points in between, vendors say potential voice revenues are being lost as carriers focus more of their attention on gaining revenue from data. Pilot projects show subscribers would be much more willing to answer their phones if they know who is calling.

In fact, caller ID to cell phones basically does not exist today, even though it is technically feasible, says Rob Fisher, vice president at TargusInfo. And contrary to what it may seem at first glance, caller ID is not directly related to the industry's contentious wireless phone number directory. "A lot of people have tied the two together when, in fact, they are completely the opposite," he says.

The privacy issue primarily is what's tying up the wireless phone number directory, which many carriers support in one form or another but which Verizon Wireless has steadfastly opposed. Fisher, however, argues that caller ID is actually a privacy keeper. In directory assistance, the system takes a name and produces a number; in caller ID, the system takes a number and produces a name. "It helps keep your wireless number private because you can see who's calling you," he says.

TargusInfo, which has access to millions of names connected to phone numbers, is approaching cable companies as they enter their early stage wireless rollouts. To compete on par with wireline, cable companies, namely those involved in the Sprint Nextel joint venture, may be more inclined to consider a full caller-ID solution and get ahead of the customer demand, he says.

At it stands now, most carrier executives still find it difficult to make the case that they could charge for improved caller ID, and most haven't bought into the notion that it's enough of a differentiator in the market to help them get and retain customers.

VeriSign, one of the largest providers of calling party name services, also has witnessed the reticence of wireless operators to embrace caller name ID. Right now, however, the benefits to carriers for offering the name are "astronomically high," says Tom Kershaw, vice president of database services at VeriSign. Research shows call completion rates are dramatically higher when the name and number are displayed.

DECIDING FACTORS Syniverse has gone so far as to do testing with both GSM and CDMA operators that have turned on the caller ID feature at the switch and that conducted tests with handset manufacturers, according to Mike O'Brien, vice president of marketing at Syniverse. Still, it doesn't appear that any large carriers have turned caller name ID into a commercial offering.

If a carrier were to roll out caller name ID, another issue is how to introduce a new service when the software in existing phones supports the method of displaying phone numbers previously stored in the phone book. If the phone is preloaded with a number, does the system give priority to the network database or the one pre-existing on the handset? Kershaw says the answer is easy: Link it to the consumer's handset. But not everyone sees it that way.

Aviram Bogin, who works on the product marketing team at Comverse Americas, agrees that caller ID is not as widely available in wireless as many would like. Comverse offers an application to more than 100 carriers worldwide that provides information about callers when the call recipient is unavailable. Every time the company approaches end-users about the features provided by the application, "they are so excited about having that very simple caller ID," he says. "I think we are taking it sometimes for granted, [yet] it is one of the most highly appreciated features," and an expansion of it could only garner more satisfied customers.

Another company looked at providing wireless caller ID with names but decided to shelve that idea and instead concentrate on providing just city and state information, a service that VeriSign says it can provide as well. Founded in 2004, Cequint says subscribers show they are willing to shell out some money for services that better describe who is calling. Of the thousands of cellular phone subscribers who downloaded Cequint's City ID application since its introduction last year via commercial Websites, 25 percent of those who tested the app ended up paying a 1-time charge of $14.95 after the 15-day trial expired, according to Cequint CEO Rick Hennessey.

PERFECT PRICE At various times, the company has experimented with pricing and found that at $9.95, adoption jumped to about 63 percent of people who tried it and wanted to buy it. Cequint expects to launch the app with its first carrier partner in the first quarter of 2007, with the application priced at $1.99.

Hennessey says even he wasn't so sure about the application when he first learned about it. However, upon hearing feedback and using it himself, he is convinced consumers will pay for the service. "Everybody in the marketplace already knows how to use it," he says. "It's such a simple product, it's deceiving. I actually think it will outpace the sales of ringtones."

That may be optimistic, but if carriers continue to opt out of the name game, they may find some promising alternatives.

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