Shell has launched a driver-oriented mobile phone service in Hong Kong.
Oil giant Royal Dutch/Shell has launched a mobile phone service in Hong Kong: Shell Mobile combines conventional mobile features with driver-specific traffic information and route planning. It is a mobile virtual network operator (MVNO), piggybacking on Sunday Communications’ GSM network.
Oil companies are well aware of the potential to direct customers to their service stations using location-sensitive mobile technologies: Shell’s GeoStar portal offers WAP-based driver services to European motorists. However, persuading motorists to use an oil company’s location finder, instead of those already provided by their network operators, represents a significant challenge.
Becoming a network operator itself lets Shell bypass that obstacle while also being able to deliver driver services using standard SMS messages. It could launch wireless Internet services in future, potentially bundling phone, Internet and telematics offerings into a comprehensive driver solution. This would also allow Shell Mobile to sell travel services from partner companies, adding considerably to its revenue-generating potential.
It could also be tied in with loyalty schemes. Shell Mobile customers could be automatically entered in Shell’s loyalty program, with their phone use tied to their card use. Shell could then use location-based, customer-targeted discounts and special offers to further increase revenues per user. If marketed correctly, this could provide further incentives to use the service.
In addition, Shell’s brand will help in encouraging uptake. Since drivers must entrust their journey to their service provider, a name long associated with motoring reliability could help Shell Mobile to acquire customers.
Hong Kong may prove tricky. The country had a 72% mobile penetration rate at the start of 2001, so most of Shell’s target audience will already have a phone. Time will tell whether the benefits are enough of a lure to encourage people to defect.
However, a successful pilot in Hong Kong would prime Shell for the introduction of 3G networks elsewhere. The rush of new 3G packages from existing operators should trigger a spike in customer switching, giving Shell Mobile the chance to acquire a user base.
