Although most mobile phone users in Ireland have yet to use 2.5G services, the mobile operating behemoths are already talking up 3G high bandwidth mobile services again.
At the 3GSM World Congress in Cannes last month, research consultancy Northstream predicted a 3G ‘price war’ where prices for 3G services will come down more quickly and drastically than they did for its GSM predecessor. And the reason for this price reduction: to justify the exorbitant fees that were paid for 3G licences all over Europe at the height of tech boom, the mobile operators are looking for customer volume rather than charging relatively high fees for the new services. That it is believed is the only way to create revenue. And from what I have seen of the 25G services so far, I would have to agree with this strategy.
Being able to capture “emotionally compelling” images on you mobile phone is a sweet idea but the idea of paying up an average of 50 cent for the pleasure of sending them to a friend or a colleague, seems to rule out the intensive use of these services by the average user on the street. And if picture messaging uptake is inhibited by excessive cost, what chance for video clips and video-conferencing from mobile to mobile? These services will , if working in line with the operators’ thinking on current 2.5G services, cost even more and therefore will be used by less people.
Two issues are central to the success of mobile data services: the cost of using these services intensively needs to affordable to the mass market: The 2- and 2.5G experience has already shown that there limited potential for increasing prices for services.
Secondly, operators and their content partners need to develop killer applications to make use of the increased bandwidth that 3G will deliver.
Operators need to pose the simple question: why did the mobile phone take off in the first place? The answer is simple; it offered the ability to make a phone call on the move. Now that’s a killer service. Another question, why did text messaging take off? Well, it was cheaper than voice and the fact that you only had 160 characters at your disposal meant that you had to communicate your message briefly. Again, a killer application! Now think about WAP and the current generation of mobile data services. Ask yourself: do you really need breaking news headlines to your phone or horoscopes by Julian De Bergh for that matter? They would be nice if you didn’t have to pay for them, but when you are paying GPRS charges for access to them, it becomes a ‘pleasure’ and not a necessity. In this case, users will be less likely to use the services in great volumes which is what the operators want.
Ultimately, the success of individual operators and service providers will be determined by their ability to create continuously attractive services and to make increased spending a USEFUL exercise. Bring on the truly useful services at an affordable price and let the bandwidth follow, 3G and all the other marketing hype follow.
24/04/2003
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