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To: slacker711 who wrote (3526)	7/30/2001 5:46:39 PM
From: EJhonsa	Read Replies (1) \| Respond to of 46821

The killer application for 3G spectrum is still going to be voice. I've been thinking along the same lines, although it seems to me that the carriers are going to have to be careful as to how they structure their pricing plans. It's great for them if they can now offer 1,500 minutes/month for $50 and do so profitably, but they have to make sure not to throw in a plan offering 500 minutes/month for $20, or else the ARPUs (or at least the voice-related portions of them) could plummet even more if subscribers aren't enticed enough to do a wholesale ditch of their fixed lines. The same dictum applies for prepaid pricing structures, perhaps even more so. Yet at the same time, the issue of creating sufficient network coverage can't be ignored. Since initial 3G deployments will inevitably be centered around major cities, it might prove difficult for carriers to cost-effectively offer major rate cuts to subscribers if they end up making a large percentage of their calls in areas only covered by 2G/2.5G services. Creating a pricing structure where different rates are charged for calls made over different air interfaces may prove to be a tough sell with consumers, at least outside of the prepaid realm. On another note, while the initial GPRS pricing plans don't come across as entirely prohibitive to large-scale wireless data adoption, they also don't seem to be conducive to facilitating the types of reckless consumption binges that are needed for it to take off in a manner similar to Japan, especially when you take into account that, even now, Genie (a WAP portal used by BT Cellnet and a few other other service providers as their home page) claims to serve 12 page views per WAP session. One of the issues that's been ignored when praising the success of i-Mode and its clones is that Japan's cost of living is one of the highest in the world, and that this may have resulted in Japanese subscribers being tolerant to heavy use of services based on pricing structures that the rest of the world might find unacceptable. For example, according to this press release (http://www.nttdocomo.com/new/contents/99/whatnew0122.html), 1 MB of i-Mode downloads, or the equivalent of 500 basic WAP pages, costs roughly $20/month. i-Mode, like GPRS, isn't particularly cheap. Anyway, the point that I'm getting at is that, just as low-cost voice may end up being a major driver of 3G uptake, so may low-cost packet data, at least provided that the costs of the phones themselves don't prove to be much of a barrier. In such a scenario, the need for bandwidth-intensive killer apps becomes far less pressing. Eric