This man's job depends on the success of 3G.
news.independent.co.uk
Will the mobile internet rescue him? British 3G stutters into life as mmO2 sets a price for its trial in the Isle of Man
By Liz Vaughan-Adams [Emma's 3rd Cousin]
19 June 2002
With the jury still out on the mobile phone industry's growth prospects, handset makers and mobile operators are busy launching new products and services like never before.
But as fears grow that consumers just will not want those new gizmos or just will not use those new services, the industry still has an awful lot to prove.
MmO2, the mobile phone operator formerly known as BT Cellnet in the UK, came out fighting yesterday, announcing a new messaging service and unveiling initial pricing for its trial third generation, or 3G, service on the Isle of Man.
"There is some cynicism about the prospects for mobile data due to relatively modest uptake of the medium-speed GPRS, or 2.5G, services to date and the resultant claim that there is no market for mobile data services," Peter Erskine, mmO2's chief executive, acknowledged.
Indeed, nearly half of all mobile phone users are unlikely to use their handsets for anything other than making calls, according to a survey carried out by the technology consultancy Detica.
But, Mr Erskine said, mobile data was already a firm reality today with customers using SMS, or text, messaging services in addition to WAP services which allow consumers to access the internet.
"Developments are now taking place in the mobile telecoms industry that have the potential to create a further step-change in demand for mobile data services," he said.
In the face of slowing customer growth, all the mobile operators including the UK giant Vodafone, headed by Sir Christopher Gent, are relying on consumers using more non-voice, or data, services as a way of growing sales.
To that end, mmO2 said yesterday it planned to launch a multimedia messaging service, or so-called MMS, in all of the countries in which it operates in October or November.
MMS is an extension of the current text messaging services that allows mobile phone users to send pictures, photographs and audio clips as well as plain text messages to other mobile phones or to e-mail addresses.
The mobile phone makers, meanwhile, have been busy launching new handsets to drive those services. Sony Ericsson this month was the first to put a mobile phone with detachable camera onto the market, with its T68i model. Nokia, meanwhile, is expected to launch its long-awaited 7650 model, which has an integrated camera, next month while Sharp also has a similar handset waiting in the wings.
MmO2, meanwhile, has just put its xda device, which is both a mobile phone and a personal organiser in one, on sale in the UK at £499.
Such services and handsets, the industry hopes, will reignite consumer interest in all things mobile as it prepares itself for the launch of third generation, or 3G, mobile phone services.
3G, which has already been delayed by most operators until the middle of next year, is the follow-on from 2.5G, or GPRS, systems and will enable services like video to be delivered over mobile technology.
Given that the operators spent billions of pounds on acquiring licences to offer 3G services, it is crucial that they persuade customers to use them if they are to get their money back.
The Detica survey, however, unearthed what many had feared. It found that more than four in 10 of the population have no interest in 3G services. The underlying suspicion is that services like watching clips of football matches on a mobile phone or sending photographs could prove little more than a fad.
And who can blame consumers for their apathy? The launch of WAP two years ago, which was sold as the internet on a mobile phone, proved complicated and time-consuming to use while 2.5G services, which offer always-on internet access, have also proved slow to take off.
Picture messaging is also likely to be slow off the blocks since only one operator, T-Mobile, has so far launched a service in the UK and since there is only one camera phone on the market.
T-Mobile, formerly known as one2one in the UK and owned by German telecoms firm Deutsche Telekom, also suffered embarrassing technical problems at the launch earlier this month.
In addition, Hutchison 3G, which will be the UK's fifth mobile operator when it launches later this year, recently admitted that its launch date had slipped by a couple of months to November.
Nevertheless, mmO2, and others with a vested interested in the mobile phone market, are sticking firmly by their guns, insisting that consumers will eventually come round.
"We have no intention of building out a 3G network for the birds to sit on, so to speak," said Mr Erskine. "Driven by new applications, new devices and ease of use, mobile data will provide the engine for growth in the mobile telecoms industry," he insisted.
To that end, mmO2 yesterday published initial prices for its trial 3G service on the Isle of Man. It will charge residential customers £25 a month but predicts they will spend more like £44.
That figure is based on them sending 100 e-mails, 10 e-mails with attachments, downloading music, playing computer games, browsing internet pages and watching video clips.
It plans to charge business customers £80 a month but predicts they will spend closer to £90, and will charge small and medium-sized firms £50 but thinks their spending will be about £70.
And the industry is not short of 3G supporters. Vernon de Silva, vice president of the privately-owned technology firm Cerebrus Solutions, said: "It would be absurd to say that users don't want 3G before the applications are even available. People need to be able to use applications as part of their everyday lives before anyone can pass judgement on 3G."
But that will provide little comfort to those wanting answers. And until 3G services appear, the only clues as to the technology's future success lie in services like picture messaging which, in turn, is still very much in its infancy.
At least the industry has cottoned on to the fact that new mobile phone services need to be easy for consumers to use if they are to stand a decent chance of widespread take-up.
"What is key to the success of 3G services is that the technology is working properly, the handsets are user-friendly, the services can be billed for effectively," said Avi Azulai, the managing director of iTouch.
But ease of use alone will not guarantee success. What will is coming up with applications and services that consumers actually want to use – and they still seem to be thin on the ground.
EARLY KICK-OFF JAPAN AND KOREA SHOW OFF 3G TO FOOTBALL FANS
As European operators debate when or even whether to launch 3G services, customers in the Far East have been able to see the service in action since 2000, and local operators are hoping that the World Cup will prove a turning point in creating demand.
One of the tournament's sponsors, Korea Telecom, has been inviting football fans to try out 3G at stalls around the stadiums using the W-CDMA technology standard that most European operators intend to use. Its mobile subsidiary KT Icom plans to roll out the service using W-CDMA next March.
Meanwhile in Japan, NTT DoCoMo has been attempting to lure more customers to its 3G offering Foma with free video clips of matches, and expanding its network so that the 3G is available wherever the teams are playing.
But bullish forecasts about 3G's potential in Asia are undermined by subscriber figures from Japan. Since its launch last October, NTT DoCoMo has only signed 112,000 clients to Foma, which uses W-CDMA. Its rival KDDI claims greater success using CDMA 2000 technology, saying it is gaining 10,000 customers a day, adding up to 830,000 since it launched in April. Japanese consumers, however, claim to have been put off 3G by the higher charges, the short battery life of current handsets and the confusion over the two rival technology standards. Another mobile operator J-Phone cited this confusion when it delayed the launch of its own 3G service until the end of this year, adding that many customers seem content with its existing 2.5G offering.
While pundits are still predicting Asia will lead Europe and the US as the next generation of mobile services take off, it remains to be proved whether local operators can replicate their national teams' success with the World Cup. |
