re: More 3G Conjecture & Positive Views on Spectrum Value
>> 3G Likely to Be Big Success But Not for Several Years
AFX News Limited
May 24 2001
Third-generation mobile phones will be a great success but not for several years and it is impossible to predict which applications will be popular, according to delegates at this week's 3G conference here.
Cumulative global revenues from 3G will reach 1 trln eur by 2010, compared with expected investment of 700 bln eur in 3G networks, according to Paola Tonelli, Vodafone Group PLC's Senior Director of Technology Strategy.
Marty Cooper, who invented the first mobile cell phone in 1972, said UMTS 3G licences may turn out to be the "bargain of the century."
However, Bodo Kohlenbach, of internet investment house Durlacher, said significant revenue from 3G is only a realistic proposition for operators by 2005, when the system is stable and large enough, and there are enough handsets and applications for 3G to be useful for customers.
Jan-Ake Bjorck, Ericsson's business director of sales strategy and tactics, said adults cannot predict which 3G applications might succeed.
"Once there is a marketing phenomenon like we are seeing with Pokemon, but which has an application through 3G using the speed it will bring, there will be no stopping them.
"But as just as Pokemon is virtually impossible to understand for anyone over 10, we are groping a bit in the dark now," he said.
Robert Silver of the ZED portal, a unit of Sonera Corp, said that downloadable icons and ring tones are the two areas where mobile portals are making money at the moment, things never included in the predictions, which were for people to use mobile phones for news, market information and the like.
Similarly the development of SMS text messaging, which for some operators like Telefonica Moviles now accounts for some 10 pct of revenues, had not been predicted.
"Seeing a group of young Finns in a cafe, laughing and chatting with each other and at the same time sending SMS messages to each other, in a way I, and perhaps anyone out of their teens could not, gives an idea I think of the way the use of 3G will evolve," he said.
Most delegates questioned by AFX News were confident that delays in producing 3G handsets are a minor hiccup but when it came to forseeing how 3G phones will be used by customers and where the main revenues will come from, each brought their own theory.
However, assessments as to whether or not the amounts paid for UMTS licences would ever be justified were generally upbeat.
One Scandinavian delegate said: "Some times when I am really depressed, I think this could all turn out to be another failure like satellite phones."
But Marty Cooper said: "Every 30 months since Marconi sent his first messages 105 years ago the use of the available radio spectrum has doubled.
"Forecasts show this will continue to happen for at least another 60 years, so although people probably paid far too much for licences, especially in Britain and Germany, if they can hang on long enough it will seem like the bargain of the century."
Vodafone's Tonelli, commenting on research commissioned by her predicting 3G revenues of 1 trln eur by 2010, said: "Cynical people say that our research would say that anyway, but I think some of our assumptions are on the conservative side."
Her research shows that by 2010 most 3G users will spend some 30 eur a month on data services, as well as some 10 eur on voice.
She sees corporate users of thin, light small laptop machines, accessing corporate intra and extranets on the move, as well as banks and other internet type services as being some of the most important customers.
"I see it as being an evolution from what is here already, both with mobile phones and with services like e mail which most people do not see as being particularly mobile at the moment, needing as it does at least a lap top," she said.
"At the moment only rich voice communication is something which we can only have with 3G as opposed to 2.5G, but with 3G things will be that much better and quicker.", said Tonelli, who was speaking in her capacity as chair of the operators group of the UMTS forum.
Paul Brandwood, Nortel's vice president of wireless internet market development, said: "In two years time I will still have a mobile phone like the one I have now.
"What will be different is that my laptop will have a PCMCA card and a built in aerial and I will be able to use it on its own for decent internet access and services like email."
Marty Cooper warned, however, that the industry must not give a false impression of what 3G will be able to do for the public.
"In theory operators could offer customers speeds of 1.1 megabytes a second, but in practice it will be far too expensive for them to do so, and we will be left with 64 kilobyte connections.
"That is probably slower than most people get at home with a high speed access. If customers' expectations are built too high we will not be able to deliver and it will take time to regain confidence."
Durlacher's Kohlenbach said: "Operators have to start working now with 2.5G to show that it works or the whole industry will start losing even more credibility with the financial community."
His research shows that gaming and gambling are the two uses for which people will be most likely to pay and which he thinks should be targetted.
Telefonica Moviles's UMTS services programme manager, Conchi Gutierrrez, said that sharing agreements of around 20 to 40 pct of networks is turning out to be one of the most practical ways operators can install UMTS networks cost efficently.
"We are already finding that in the UMTS field, traditional ways of doing things with operators no longer apply," she said.
Jean Marc Perera, Alcatel's head of development for 3G devices, was due to speak at the conference in a panel dicussion on 3G devices but had to pull out at the last minute when no other members of the panel could be found.
Conference rumour was that it was because they realised their 3G devices were further behind in development than they would like to admit.
But outside the hall Perera said that Alcatel was satisfied with the progress on 3G networks equipment supply.
There have been successful laboratory tests. Equipment installation is starting soon for prototype testing by operators with favoured clients, and it sees commercial services with handsets being sold in 2003 - if available.
"With handsets we are in the position of being a follower, not having the handset market to justify the R and D needed for 3G but we are confident we will be able to offer products which work effectively once the system is up and running. <<
- Eric - |
