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JUNE 28, 2004
By Olga Kharif America, Get Ready for "Ringbacks" [Page 2 of 2] PASSING THE CALL. That's good news for software and hardware equipment vendors, including France's Alcatel (ALA ), U.S.-based U.S. Comverse Technology (CMVT ) and NMS Communications (NMSS ), Korea's WiderThan.com, and Ireland's Alatto Technologies. Depending on the number of subscribers that must be supported, hardware and software for a nationwide ringback rollout will cost from $2 million to $45 million, figures Hernan Giraldo, senior marketing manager for ringback tones for Alcatel in North America. Here's how the technology works, which is quite unlike ringtones that you download onto your handset. Instead, a carrier installs special servers that contain the ringback tone recordings and communicate with the telecom network. Whenever you make a call, it gets passed through to a network switch that asks another device called a "content management server," which keeps track of the services each subscriber is signed up for, if the person you're calling has assigned a ringback to you. If the answer is yes, the switch asks the special ringback servers to send that song along. Moments later, you're listening to it until the friend you're calling answers the phone. Under this setup, ringbacks can be heard on any kind of phone, wireless or landline -- while ringtone downloads work on only certain handsets, capable of downloading, storing, and playing music. TOUGH ON PIRATES. For service providers that typically spend a few billion dollars a year on infrastructure improvements, the ringback setup cost is no more expensive than an ice cream is for the average person. And in Taiwan, carriers that deployed ringback gear from Alcatel have seen the service pay for itself within 2 to 4.5 months, says Hilary Mine, senior vice-president for marketing at Alcatel North America. Universal's Hochgesang explains why music studios, too, love ringbacks. Because the software and hardware behind ringbacks reside on the carrier's network and the songs are never downloaded onto the phone, that reduces the possibility of piracy, he says. Hochgesang adds that Universal plans to begin trials of ringback tones with U.S. carriers this year. Ringback tones, however, don't have to be songs: They can be jokes, clips of celebrity voices (real or impersonators), or even advertisements. At least a quarter of ringback revenue will come from corporations that want callers to listen to their company's jingle or message while waiting for the phone to be picked up, says Alatto co-founder Neil Flanagan. Of course, for some people that might be a level of torture that rivals automated phone-response systems. NEXT: SOUNDTRACKS? The ringback tones could even pave the way to more elaborate mobile music services. In a few years, a caller might be able to order, with a touch of a button, a ringback tone he's listening to from someone else's line. Or he might choose to download the whole song or a video for that song onto his cell phone, says Flanagan. Mobile music downloads, already available Britain, Germany and Japan, could also make their way to the U.S. on a trial basis within the next year. But domestic wireless networks would need to be souped up to allow for faster downloading before such a service can work well, says Hochgesang. Some companies, like Tellme Networks in Mountain View, Calif., are also developing "call soundtracks," a service that lets people listen to background music while talking on the phone. The music's volume can decline automatically when the callers are chatting and rise during pauses. Either party can also turn off the music during a call. The hardware and software needed to provide this service is similar to that needed to enable ringbacks, and Tellme is in discussions about implementing the service with several U.S. carriers, says co-founder Angus Davis. Mobile users might one day be able to buy not just a ringtone and a ringback but a batch of products falling into a certain theme, say, an Eminem ringtone, an Eminem ringback, and an Eminem screensaver. The same user might also want to receive regular updates on the singer's tour schedule, CD release dates -- or even buy tickets to his concerts via a cell phone, says InCode Telecom's Dunsby. For carriers, such services -- and the additional phone use they'd bring -- could translate into extra cash. With the first U.S. tests of the basic ringback tone service are still to come, there's no guarantee that all these new-revenue dreams will pan out. Indeed, other services, such as picture messaging over wireless phones, that have proved popular in Asia have not taken off in America. Chances are, though, cell phones here will playing lots of new tunes in the not-too-distant future.
 Kharif covers technology for BusinessWeek Online in Portland, Ore.
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