NeuStar to Oversee Global Database Contract
Wednesday, September 28, 2005
NeuStar Inc. of Sterling won a contract to manage a database that may eventually allow more than 1.5 billion people around the world to send each other e-mail, pictures and video on their mobile phones.
The deal, which NeuStar officials said is to be announced in Singapore today, positions the company to move into what is expected to be the high-growth area of exchanging data over wireless devices.
Under an agreement with the GSM Association, a trade group, NeuStar will operate the address databases that direct the flow of content for more than 680 GSM mobile-phone operators in about 210 countries and territories.
GSM, the Global System for Mobile Communications, is the most popular mobile-phone technology abroad and is used by U.S. carriers Cingular Wireless and T-Mobile.
At its simplest, the database would help identify the mobile phones on a GSM network that are sending or receiving video, e-mail or photos and route the data to and from the intended devices.
As wireless networks carry more data, NeuStar officials said the databases could allow people to instant-message each other with photographs or video, to make "push-to-talk" walkie-talkie-like calls across networks, or someday to place video calls from their mobile phones.
Transmitting Internet protocol-based data on mobile phones requires a sophisticated database to ensure that video, pictures and e-mails get to the right device.
Financial terms of the NeuStar contract were not disclosed, but chief technology officer Mark D. Foster said the company expected to make money on the deal and that it was structured so that revenue would rise as mobile-phone operators increasingly use its databases.
"We have modest expectations in the near term since the types of services we are referring to are early in terms of widespread use," Foster said in an interview. "We expect that over time this relationship will be very strategic for us as the mobile industry offers more data and content and as the volume of these services increase."
Keith Mallinson, who heads the global wireless research and consulting team at the Boston-based Yankee Group, said the transfer of data on wireless devices is still in its infancy, but that as people do more of it, managing the database "could become quite a substantial business."
"What NeuStar appears to have managed to do with the GSM Association is to be the central provider for that mobile roaming community. That is a pretty powerful thing to do," he said. "It has potential, but it's going to be long term before it becomes anything like as big as [managing addresses for] the fixed Internet."
Shares of NeuStar closed yesterday at $32.22 a share, up $1.38.