They’re Playing Our Song
By Aine Coffey and Brian Carey
Sunday Times December 2, 2007

Irish entrepreneurs are hoping to cash in on the mobile phone revolution that will see us more likely to buy tickets than to talk, write Aine Coffey and Brian Carey.

It was May 2005. Mark McLaughlin, a die-hard Oasis fan, had ordered two tickets from Ticketmaster to stand at the front of the hairy Mancunians' concert in London's Clapham Grand.

When fifth-floor seated tickets arrived instead, he saw red. The experience would turn McLaughlin, then about to move from Goldman Sachs to corporate banking at Bank of Ireland, into an entrepreneur.

He spent three days on the phone fighting with customer services at Ticketmaster, then he went to the top.
“I sent an e-mail to the board of Ticketmaster in the US and said there was a problem with their UK operation and I had taken legal advice,” he recalled.

Meanwhile, a light bulb had gone on in McLaughlin's head. A graduate of Dublin's Smurfit business school, he was no stranger to entrepreneurship: Kyran, his father, pioneered the phenomenal growth of Davy Stockbrokers.
There had to be a better way to handle ticketing, he says. He stuck the words “ticket” and “technology” into the Google search engine, then started reading.

In August 2006, he quit Bank of Ireland to start Ticket Text, which enables mobile phone users to buy tickets using their handsets. With the system, concert goers are texted a barcode which is produced at the venue to gain entry. Last week, the company signed a breakthrough ticketing deal with the Mama Group that runs 18 venues in Britain and is about to raise some E10m to fund expansion.

McLaughlin, 29, is one of a host of Irish entrepreneurs hoping to make millions from mobiles. Local companies are betting on everything from mobile money transfers to music downloads. The underpinning belief is that the mobile is no longer just about talk and text.

Insiders such as Stephen Brewer, the former head of Vodafone Ireland and now an industry consultant, believes that there is “a revolution in waiting” in the mobile telephony business. The arrival of technology giant Google and the Apple iPhone into the mobile business is a harbinger, he says.

Informa Telecoms & Media estimates the overall data market to be worth $16billion, (E11billion), which it predicts could grow to $23billion by 2010. It's a revolution operators are ready to embrace. In mature markets such as Ireland, call revenues are declining and subscriber growth is slowing. Operators need sources of revenue, and having swallowed the huge expense of 3G licences and networks, they have the funds to invest in developing new services. That is good news for the plethora of Irish companies that are developing applications for mobile blogs, mobile money transfer, mobile advertising and mobile television.

State agencies support mobile as it offers Irish companies the ability to build scale globally. AIM-quoted Zamano, a mobile content provider, more than doubled its size last week by buying Red Circle, another Irish company.
John O'Shea, Zamano chief executive, said it will keep growing by acquisition. The US, India, central and South America are all promising markets, he says. “We are part of Enterprise Ireland's scaling programme, and part of that is to get to a turnover of E100m,” he said. The company is actually on its way to surpassing that. “Zamano's turnover last year was E12.5m; analysts say E21m to E22m this year, but add in Red Circle and it will be E50m to E55m,” said O'Shea. “That will be a good level of growth.”

He says that it is getting easier to provide data-rich products because of the improvement in telecoms pricing and technology. Vodafone's introduction this year of a E1 a day limit on the cost of browsing the web and getting downloads via the mobile phone was a major break, he says.

Paddy Holahan, former executive vice president of marketing at Baltimore Technologies, established NewBay Software in 2002. Backed by Balderton Capital, run by former O2 Ireland boss Barry Maloney, it now employs 150 people, including 20 in an office in Seattle in the US, and is profitable.

In his Baltimore days, Holahan says he was taken by the camera phones he saw while travelling in Japan in the late 1990s. “I thought they were a strange and interesting idea.”

When he saw internet blogging becoming a phenomenon, he decided there had to be an opportunity to link the two.
“There are predictions that 70% of all the data in the world is going to be created by users,” said Holahan. “Look at YouTube, MySpace -they have 100% user-generated content.”

NewBay's software enables mobile operators to build a business around such a social networking market. “This is the big thing,” said Holahan, “We have tripled in size in the past year and hope to at least double this year.”

Acision is the largest supplier of software that runs short message systems for 300 mobile operators across the world. It is owned by Irish mobile entrepreneurs Gilbert Little, Larry Quinn and Irish private-equity company Atlantic Bridge. The humble text is expected to play a big part in the way the mobile phone interacts with the internet in the future. “Imagine if you were waiting on an item on eBay, once it comes online you could receive a text and bid from your mobile,” said Steven van Zanen, vice president of marketing, Acision.

This, Van Zanen says, is the power of the mobile over the traditional fixed internet. Unlike a PC, “the phone is a personal device,” he said. Mobile operators have a huge amount of information regarding subscribers, and this personalised data will be crucial in driving another new key revenue source for operators and content providers: mobile advertising.

Irish companies Changing Worlds and Xiam Technologies are developing software that will deliver personalised advertising to subscribers. Changing Worlds has signed up 50 operators to its software. “We use subscriber intelligence to deliver highly relevant advertising,” said David Moran, Changing Worlds' chief executive. “It means delivering ads people actually want, not spam.”

Another Irish company, Openet, is developing software to allow mobile operators to bill efficiently for new services. For long a loss maker, the company made profits of E3.7m last year on sales of E27m. It sells to more than 60 operators.

For chief executive Niall Norton, the convergence of internet and mobile, the development of “web anywhere” services, is the ultimate goal for operators, and an opportunity for the company.

One of the reasons that mobile operators have been slow to embrace many downloads is that they cannot properly bill for them, says Van Zanen.

Zamano wants to offer people “pretty much the same service on their handset as they get on the internet”, said O'Shea. “The biggest drivers will be entertainment services and mobile web services such as mobile music, video on demand, adult content and video clips,” said Pat Kidney, managing consultant with Analysys Mason Ireland.

The international jury is still out on mobile television, which was trialled in Ireland this year by O2, Kidney says. “There is a lot of debate about whether mobile television is needed.”

Entrepreneur Emmet Memery plans to be one of Ireland's top content providers.

“Content is where it is going to be at, but not download content,” he declared.

“That is of no interest because music is so cheap. The real content will be live.”

Among the live applications he expects to take off is the use of the mobile phone as a wallet and credit card. Memery is Vodafone's main Irish reseller to small and medium-sized businesses. Other businesses in his Oyster Group include the Lemongrass chain of restaurants.

Now he has plans for an Oyster “mobile lifestyle brand” that would enable subscribers to access services including concert tickets, restaurant bookings and airport and city centre business lounges.

Meanwhile, McLaughlin believes the Mama Group deal will help him to win more clients. “No one wants to be your first customer, they all want to be your fifteenth,” he said.

He has already done ticketing deals with Ryanair, with West End productions and with Fulham Football Club, and he sees the ticket as only the “point of entry” to a customer.

Once Ticket Text has a customer bank, he says it can access multiple revenue sources. The company could for example get a cut of beer sales if it gets customers early to venues by offering promotions, or could get payment from the likes of Topshop for offering coupons to screaming young girls at boy band gigs.

The platform the company has developed is only the start, says McLaughlin. He wants Ticket Text to develop new technologies, including ways of cracking social networking sites. His big plan is to be the “Ryanair of ticketing”. And like Ryanair's Michael O'Leary, he wants to take on a dominant player back home.

“Ticketmaster sells 130m tickets worldwide. In Ireland there is only one ticketing agent and there must be room for other players with a low-cost model,” he said.

He's probably right; it seems the sky is the only limit.

Banking on Text Transfers

Anam Wireless is a software company backed by Jay Murray, one of the Irish mobile industry's best-known venture capitalists, writes James Ashton.

It is hoping to exploit the growing areas of mobile money transfer.

The mobile industry's body, the GSM Association, sums up the financial opportunity for the sector: while 3billion people worldwide have a mobile phone, only 1.8billion have a credit or debit card.

It also believes that the value of cash sent home by migrant workers could quadruple to £ 400billion (E560billion) by 2012 if transfer by text message becomes the norm.

The technology works, and systems are already in use by other operators in Africa.

Forrester Research estimates only 3% of people bank via their mobile -and most do no more than the basics, such as receiving mini-statements by text.

THE SUNDAY TIMES December 2nd 2007

back to newsroom