Theschism has brought to the fore the old argument about the benefits of launching servicesinto a new, exciting market or adopting a cautious approach by releasing services based on'less-advanced' technologies while matters are sorted out.At the moment, the market for non-voice-based mobile services is still only emerging,and it is still unclear what content consumerswill be prepared to pay for.On the financial side, the belt-tightening that has seen operators partially offsetting their mammoth investments in 3G network equipment and licences, including write-offs, cost-cutting and reductions in capital expenditure, has also seen the launch of 3G services slipdown the their priority list.ForecastThe landscape at themoment, therefore, is one that would give content players time to develop and perfect the marketing of their services while watching the 3G space and waiting for regulatory and rights management issues relating to both 2.5G and 3G content to be sorted out.
There is still contention between operator and content providers' plans to offer services involving tracking the user's location and imaging and "social etiquette". It says: "There is unlikely to be any point at which imaging creates user resistance. In con-trast, video telephony may create such a pushback. To be acceptable to users, very substantive investment..
. will be required to ensure that video telephony is not a step too far. The evidence suggests that these investments are not being made.Social ShapingThree key themes that emerged in relation to the social shaping of 3G:1. social connectivity;2. the emotional value of mobile phones;3.
and attitudes to mobile imaging and location based services.Mobile phones do not necessarily widen a person's social connectivity, but instead drive more frequent and intensive relations with existing contacts - colleagues, family and friends. Furthermore, the primary value of the mobilephone was found to be for 'functional' activities- such as talk and texting - rather than 'fun'activities such as playing games.Significantly, the pursuit of social relationships with businessclients over the mobile was found to be minimaland mostly talk-based. An implication of these findings for the indus-try is that people are reassuringly willing to payfor services that increase social connectivity.
Because individuals place an extremely highvalue on these activities, it's a consequence that operators will be able to tariff these "social"activities with a higher premium than functional activities such as browsing news headlines orchecking the weather.People feel 'emotional' about the information stored on their mobile phone and 'person-to-information' does not carry the same emotional value as'person to person' communications by phone. They inhabit an emotional space all of their own, requiring 3G operators and suppliers to side step conventional notions of how to package, promote and sell new terminals, services and applications.Some non-European cultures have already out lawed the use of camera phones in public, and just as mobile ring tones have already ruined the tranquillity of many peoples' train journeys, there are concerns voiced that uncontrolled use of picture phones could lead to public turn-off or voice. 3G suppliers must position carefully to demonstrate that it's for friendly 'of the moment'.
Video telephony - the next evolutionary step from picture messaging that 3G will certainly enable in the next few years - could generate considerable resistance unless industry thinks hard about the social etiquette demanded by this new communications paradigm.Reasons for the delay. Thereats to the industry1. Spread of Wireless Local Area Networks (WLANor Wi-fi).
Wi-fi can be operated in licence exempt. Many public places (cafes, airports and hotels) have recently been equipped with such networks allowing PCs and PDAs users free or paid access to data services. This is becoming a serious threat to 3G, especially when the spread of wi-fi spots results in a broad coverage.2. Price of handsets. The high price of handsets and subscriptions should also provide a barrier to take up in the short term at least.
Hence it will be a challenge to get devices into 'normal' end-users' hands. The rate of pre-paid mobile phones make me think that users are still aware of the cost of conversation.3. Overexpectation and Timing of the new Technology: Spain has not yet performed the shift from GSM to GRPS, and services based on the GPRS are only now reaching critical subscriber numbers. The attractions of 3G were originally to do with capacity, capability and con-tent.
The rush to 3G is less vital from a pure customer point of view.GPRS is allowing information to be sent more efficiently over 2G networks. Operators have also been able to launch a range of new consumer services (picture messaging, games, etc.) without the neccessity of building a new network.
This is helping to operators to improve the profitability of their existing operations. Certainly it will help to migrate subscribers over to3G but now it is an advise for current players to adopt a 'wait and see' approach. Will 3G add many more services to those being offered by GPRS operators in the short to medium term?? The only real advantahe of 3G is the capacity constraint of video services but..
.is it a real demand??Their main focus shoul be on reducing churn rate, tying their prepaid customers into more lucrative, longterm contracts and increasing loyalty and user spending through new services and in my opinion GPRS must be milked more before 3G is launched.Despite the pressure operators have been under for the last few years to launch 3G as soon as possible, other players that will become very important to create content and services are still judging whether it is too early to invest in the market.4. Marketing Approach: Mobile operators are depending on new data services to build positive expectation around 3G, but how is their marketing approach? The mis-marketing of WAP should give the operators a lesson of the consequences of focus on the technological aspects and not on the benefits that customers could get from he new technology. Technology is not intrinsically good but extrinsically good because of the benefits that could create on the customer's life.
Operators need to apply improved segmentation to make marketing programs more effective. Without focused marketing based on communicating the benefits of a service to a customer community rather than the technology behind it, result scan be unpredictable.5. No-Revenue Model: It is very important to create revenue models to avoid the situation of having to give services away for free. In the rush to get to market, some operators are perhaps forgetting about billing integration and launching free download services, which will make little revenue and drive the potential value of the market down.However, UMTS technology has since developed, and the successful launch of 3G services by NTT DoCoMo in Japan shows the technology does have a future.
DoCoMo's FOMA net-work, which was launched in 2001, has so far attracted 320,000 subscribers, and European operators will be closely watching further developments in order to calculate their own successrates. How far the Asian market, with its high tech loving users, can be compared to the attitude of the traditionally more sober Europeans remains to be seen.Economic TestThe report suggests five 'economic tests' that successful 3G services will need to pass:1. Pricing. Future phone services will succeed only if they are competitively and clearly priced.
2. Practicality. Second, successful 3G services should be closely linked to specific tasks and functions which user will find valuable. Picture messaging is a good way of sending complex information quickly, or ensuring a visual record of an event.3.
Sociability. Services that exploit social network effects are also likely to be popular. The success of ring tones and screen savers shows that mobile services are successful to the extent that they can be shown, shared and passed on.4. Mobility. Future services must target users' mobility, and specifically the times and places in which they are mobile (videos of football goals at the end of the match, or the ability to buy cinema tickets or get transport information should be popular)5.
Simplicity. 3G services will have to be simple and work properly. Any future attempt to introduce advanced services before they work toconsumers' already high expectations is likely to fail just as quickly.Telefonica of Spain and Finnish operator Sonera, said they have written off EU8bn for the withdrawal from the German market. In 2001, DeutscheTelekom wrote off losses of around EU3.5 billion, largely attributed to the acquisition of itsUMTS license.
Some analysts now suggest that Telefonica made the right move by dropping its 3G activities in Germany and Italy and see many other operators following this path. The large panEuropean operators, on the other hand, are eager to push ahead with the roll-out of their UMTS networks.However, UMTS technology has since developed, and the successful launch of 3G services by NTT DoCoMo in Japan shows the technology does have a future. DoCoMo's FOMA net-work, which was launched in 2001, has so far attracted 320,000 subscribers, and European operators will be closely watching further developments in order to calculate their own successrates.
How far the Asian market, with its high tech loving users, can be compared to the attitude of the traditionally more sober Europeans remains to be seen.
