Users indifferent to first Euro 3G launches
idg.com.sg
By Joris Evers
IDG News Service, Amsterdam Bureau
10-10-2002
AMSTERDAM - 3G (third-generation) high-speed mobile data is about to become commercially available in some European countries, but corporate users, expected by some vendors and analysts to be the first takers for the services, are unexcited by the news.
Hutchison 3G UK Ltd., the sole operator in Europe with a 3G-only network, will open shops in London and Birmingham this quarter selling mobile phones and service on Europe's first commercial 3G mobile network.
The launch could prove to be an anticlimax. Operators, including Hutchison, paid about US$100 billion total for European spectrum licenses and, together with hardware vendors, hyped the world of high-speed data on phones. Many of the same industry players then gradually deflated expectations as rollouts were delayed.
Today, 3G services are expected to be the same as what is already available, only faster and better looking. As more bandwidth is available, applications will look better on screen -- what is now a text menu, may get some graphics. But basics of the services, such as multimedia messaging service (MMS), e-mail and Internet access, will remain the same.
Nokia Corp., the world's largest handset maker, last month unveiled its 3G phone and proclaimed "busy business people" would likely be the first buyers. But business users are still struggling with GPRS (General Packet Radio Service) and it will be five years before 3G becomes a viable option, European business telecommunication users groups estimate.
GPRS is an upgrade to the second-generation GSM (Global System for Mobile Communications) networks that enables packet-switched data traffic at about the speed of a standard dial-up connection. GPRS service was gradually introduced around Europe in the past year or two, but problems still remain with pricing, service standards, and roaming. GPRS is seen as the route to and an example for 3G.
"Pricing for data on GPRS is way too high, companies are issuing instructions to users not to use GPRS," said Ewan Sutherland, executive director of the International Telecommunications Users Group (INTUG) in Brussels. "Any talk to us of 3G seems to be very, very premature."
Cees Tromp, director of Dutch business user group Vereniging van Bedrijfstelecommunicatie Grootgebruikers (BTG), agreed.
"We don't see (business use of) 3G until 2007 or 2008," he said, adding that coverage of 3G will be limited to a few large cities initially. "Operators have nice stories, but it gets tough when I ask them how I can convince my management of the necessity to use 3G."
Pricing is the main obstacle, according to both Sutherland and Tromp. Most operators charge by the amount of data transferred. Users don't want to be surprised by high bills at the end of a month, but want a flat fee for unlimited usage. "Flat pricing should be there for GPRS data, let alone 3G," said Sutherland.
A good example, and perhaps an alternative to GPRS and 3G, is wireless LAN (WLAN), said Sutherland, who likens GPRS to ISDN (Integrated Services Digital Network), the standard for fixed digital telephone lines that took years to take off in Europe.
"Wireless LAN is much more attractive (than GPRS). You can get it at airports and hotels at a low price. A couple of euros per megabyte is crazy; wireless LAN is offered at a much more easily contained price," said Sutherland.
3G backers, however, maintain that WLAN and 3G are not comparable. Anssi Vanjoki, executive vice president of Nokia Mobile Phones, at a news conference last month sought to end talk about rivalry between WLAN and 3G. Vanjoki also said businesses would be first to buy the new Nokia 6650 3G handset. He said the 6650 would allow somebody to be connected to the Internet on a laptop, while also talking on the phone.
"WLAN is a local area network, it is not for on the road," he stressed, telling reporters to highlight and underline the word "local." The usage scenarios for the 6650 Vanjoki gave, however, did not involve moving cars, for example, but hotels, airport lounges or conference centers, exactly the places where WLANs are likely to be found.
Siding with the user groups, industry analysts said that the current 3G announcements don't mean high-quality service is available. Besides Hutchison 3G and Nokia, operators including Sonera Corp. of Finland and Mobilkom Austria & Co. KG have announced 3G rollout plans. NEC Corp. and Motorola Inc. say they are ready to deliver 3G handsets to European operators.
"These announcements are all inaugurations of 3G infrastructure and say nothing of commercial availability and capability of handling what we think of as 3G services," said Bernt Ostergaard, a research director with Giga Information Group Inc. "It will be mid-2004 until we have something user friendly. What we are seeing now is stripped-down network infrastructure, just the basics in place, and what we need is quality of service and service-based pricing, we don't even see that today with GPRS operators," said Ostergaard.
Richard Dineen, a research director at analysis company Ovum Ltd., agreed.
"3G per se is nothing for consumers to get excited about. We should be looking for the announcement of services, not the underlying radio network," he said. "I don't think 3G will make a jot of a difference to consumers. Services on the phone will run a bit faster."
Motorola's Bob Schukai, 3G product director for Europe, Middle East and Africa, said the only significant 3G announcements are coming out of Hutchison, with which it has a handset contract.
"The only way 3G is going to work is when the handset guys, the content providers, the billing agents and the call centers are in place and the infrastructure is ready. It is no good to launch a 3G network in a vacuum," Schukai said.
Nokia and Sonera, Finland's largest phone company, have said 3G really is nothing more than a bandwidth upgrade to GPRS, making existing services run faster. Ostergaard and Dineen agree, Hutchison 3G does not. The Maidenhead, England, operator remains excited about the possibilities of its 3G network, perhaps because it has nothing but 3G to sell.
"Saying that 3G is just added bandwidth for existing services is like saying television is radio with flickering images," said Matt Peacock, director of external relations for Hutchison 3G. "What we are doing is unprecedented; we are building a new medium." Hutchison 3G, which is also active in Italy and several other countries, is majority-owned by Hong Kong conglomerate Hutchison Whampoa Ltd.
If Hutchison 3G successfully delivers its services, Peacock says it will offer person-to-person full streaming video as well as location-based mapping services and other rich multimedia services, including premier league soccer clips.
"3G is not a mobile telephone that has data access. It is not a telephone; they are designed for the eye as least as much as for the ear. Over time 3G will be absolutely transformational in the way consumers live their lives, much like the mobile phone did when it first came to market," said Peacock.
Peacock's vision may eventually come to pass, but users won't be able to test it against reality until later this year, at the earliest. In the U.K., Hutchison 3G has started handing out handsets to "friends of the company, but not people with the company." The company plans to have about 100,000 handsets in use by year end in the U.K. and Italy, but won't say how many of those will be used by paying customers. The operator also won't say if it will target business or consumer users, or both, just that the 3G "is not comparable to anything you ever experienced before on a handset." |
