[3GScottishUser]

From thebusinessonline.com (18/02/2006):

A spectre sat at the 3GSM extravaganza in Barcelona last week. As the week wore on, its presence and its message became increasingly noticeable amid the glitz and razzmatazz of the mobile industry’s annual equivalent of the Cannes film festival.

It was the growing realisation that the hundreds of billions of euros invested in 3G by Europe’s mobile operators may never be recouped by gimmicks such as mobile phone television. At the same time, new free or dirt-cheap services such as wireless internet voice services will gobble up traditional voice revenues.

Globally, mobile phones are selling as never before. The industry has outgrown 3GSM’s traditional location in the south of France and fully justified this year’s move to Barcelona. The presence of newcomer China Mobile, with its growing customer base of 250m, showed how the Global System for Mobile Communications (GSM) phone standard devised in 1991 has spawned a worldwide industry.

But despite the hype the industry mustered in Barcelona, it was far from clear to observers how new 3G services launched last week could justify the vast sums spent by the operators in developing the technology.

As exclusively predicted by The Business, the show kicked off with an announcement from the chief executives of mobile operators Vodafone, T-Mobile, Telefónica, TIM, Orange and China Mobile. They are to create a common standard for instant messaging on mobile phones. Instant messaging on PCs is a free service, but mobile operators are hoping consumers will pay to instant message on mobiles.

This was followed by an announcement from Virgin Mobile and fixed-line operator BT – the only big European operator without a mobile arm – that Virgin Mobile is to be signed up to the BT Movio digital television service for mobiles. Virgin unveiled a sleek new handset called the Trilogy, with a dedicated television button. The phones will run on Microsoft’s Windows Media Video software.

But despite operators’ claims that research shows customers would pay about £10 a month for television services, the broadcasting industry is not convinced. Jason Hirschhorn, MTV’s chief digital officer, told the 3GSM show that the broadcaster would enter into discussions with operators over an advertising-based business model. “Free is always good for the consumer,” said Hirschhorn.

Pop star Craig David also took the rostrum at 3GSM to sing the praises of mobile music. He said he preferred to use his mobile to download music tracks because it meant he did not need to travel with a computer to download new songs while on the road.

O2 – the UK-based mobile operator taken over by Spanish telecoms giant Telefónica – announced plans to launch a mobile phone music channel that will provide O2 customers with a way of managing their music collection on their mobiles.

But O2 chief executive Peter Erskine, who shared the rostrum with David, admitted that so far revenues from this type of service are modest and that much of O2’s £1,4bn (E2.03bn, $2.5bn) a year data services revenue comes from text messaging.

The worst news for mobile operators came from Finnish giant Nokia, which rocked Barcelona by unveiling the world’s first mass-market dual-mode wi-fi handset. The phone can switch between a mobile network in the street and then be used to make calls over the internet when the user comes into range of a wi-fi network.

Communications companies that do not own mobile networks of their own are keen on promoting the internet as a cheap alternative mobile voice network. BT, for example, is developing wi-fi networks that cover entire urban centres in 12 UK cities in addition to installing wi-fi in homes, hotels and coffee bars. BT intends to offer increasing low-cost wi-fi voice services to mobile users once the handsets become available.

Nokia head Jorma Ollila said his company’s new dual-mode phone’s software would enable a user to make calls at much lower cost when connected to a fixed broadband link than over a mobile network. The phone costs €275, significantly cheaper than existing wi-fi enabled phones. Announcing the handset, Ollila uttered the words the mobile operators had hoped they would never hear. He said: “Internet voice is going mobile.” The spectre shows no sign of being exorcised.

http://thebusinessonline.com/Stories.aspx?3G%20-%20All%20hype%20and%20no%20point?&StoryID=52D5C95C-B02A-47D0-B500-FD2F3DB9BC5A&SectionID=BA48E3D7-CCB9-4976-883F-EE19F9206FB3

[Ben]

I think "thebusinessonline.com" has gone for the easy writeup, here. They've taken a lot of the 'obvious' negative stuff in this summary which is so typical of business publications.

Firstly, 3G is just a technology. Sure, the licences were overpriced. Sure, nobody knows yet just how consumers are going to end up using the extra bandwidth. But we have to remember that no one knew GSM would be used for SMS - it's just the technology. I can understand the negativity towards the networks who justified the changes to their shareholders through promises of rapid music download uptake and vast purchases of multimedia content, but if they'd gone to their shareholders with "We're paying out for this new technology, but we're not sure how anyone will use it yet" then we'd all still be sitting around with 2G. Hell, if that sort of mentality existed we'd probably still be using corded telephones!

3G's indoor coverage is pretty damn poor, and in that respect having WiFi capable phones that can hand-over to the local network is a good thing. Of course, the operators will still push for a share of that revenue, as they control a vast amount of handset sales. Everyone seems to be forgetting that without extensive network subsidy these phones are simply too expensive for most. Also, anything that speeds the delivery of the networks own attempts at content could be said to be a good thing.

Two things are for certain - HSDPA cannot come soon enough, and neither can greater coverage. If the networks don't put the boot in and get it sorted then sure, alternative technologies will start to take over.

[Hands0n]

To be unrepentantly pedantic ...............

I suppose it all really depends on what is truly meant, or perhaps better still, understood, by the expression "3G". The reality is that 3G is simply the Airtime Interface - that bit of the network between handset and transmitter. It gave us the increase of speed in that part of the network needed to get more bandwidth to the handset. What actually pours down that bandwidth is irrelevant.

The article could equally be written about any past, present and future Airtime Interface capabable of carrying the highly critiqued Applications (i.e. Videocalling).

I do think that it is time that there is a clear separation between the thinking of Network (airtime interfaces etc...) and Applications (videocalling, content, video, TV etc.). It is in the latter where the critiques can be usefully applied - and where in the former it makes no real sense at all, unless we are to never develop the airtime interface ever again (kiss goodby HSDPA and what will inevitably follow).

It is, my contention, that the hype is not in the Network but rather in the Applications launched over the former. But I've not ever heard anyone denigrate Video over Internet connections using the likes of MSN or other such Messengers. So why, for example, Videocall takes such a slapping when there is nothing to compare in the mobile world, nor any precedent, is a constant bemusement to me. I'm sure, in time, it will be HDTV Videocall to the handset, and until then I can live with what we have :)