As
GPRS slowly starts to find a foothold in the minds of mobile consumers,
one question seems to pop up again and again; Why bother with 3G at
all - there is hardly any difference!
Carl
Williams, VP Media Sector @ Strand Consult ( on left ) says data speed
is crucial to the sucess of 3G.
The
data speed of 3G, compared to 2.5G, often bares the brunt of the dubious
views on 3G, because many seem to think that the speed GPRS can offer
will be quite sufficient for 99% of all mobile data applications for
many years to come...
Most GPRS users are getting around 30 to 35 Kbps connection speeds.
This is not bad and certainly over 3 times the speed that many were
used to on a GSM Circuit Switched Data connection - which only offers
a mere 9.6 Kbps connection. Indeed, many people have been - or still
are - connecting to the Internet on their PC's using a 56 Kbps modem.
But saying that anything IT related that exists today will be fine for
many years to come, is in itself a bold statement that has been proven
wrong again and again - although it is a very easy mistake to make -
even by people in the business:
In 1943, Thomas Watson, Chairman of IBM said "I think there is
a world market for maybe five computers."
In 1977, Kenneth Olsen Pres. and founder of Digital Equipment said "There
is no reason for any individual to have a computer in their home."
In 1981, Bill Gates said 640Kb (internal memory in a PC) ought to be
enough for anybody.
There is a very logical reason why quotes like the above are common
in just about any recent trade magazine in any business sector - including
the mobile sector. It is usually because people forget that the combination
of the never stopping development of new, smaller, faster, cheaper technology
- combined with any individual persons need to be informed, save time,
be entertained or other benefits, will lead to a market for new products
with new features that can often be hard to imagine - even if you are
in the inventing business:
"Everything that can be invented has been invented."
--Charles H. Duell, Commissioner, U.S. Office of Patents, 1899
At the same time as saying the above in 1899, Charles Duell recommended
that the Patent Office be closed, as there would be no further need
for it!
Getting back to GPRS. Just the difference between the 35 Kbps that GPRS
offers, up to the 70 - 80 Kbps that the mobile consumers are getting
in South Korea, makes a huge difference in which types of services are
possible - and being used by the mobile consumers. South Korea is running
a CDMA 1X network and currently has around 16 million mobile subscribers
enjoying the 70 - 80 Kbps download speed that we probably will not see
in Europe before the introduction of 3G.
GPRS is fine for light and medium data dependant applications. So applications
like email and messaging will work fine over GPRS. But once you start
looking at heavy applications that need some bandwidth to function reasonably
well, GPRS falls short of the mark. Just the attachments on email are
enough to make 30 Kbps look very slow - and if you are checking your
mail on your portable PC or Pocket PC, using your mobile phone as a
modem - it can get very tedious, very quickly.
There is no reason to believe that any applications are going to get
less data intensive. The Internet is already full of multimedia content
and whether you can get broadband access or not in your next home could
effect your decision to purchase!
Our research in South Korea has shown that speed is crucial to the success
of new 2.5G and 3G services and the faster speed you can offer - the
heavier the applications will get. In South Korea one of the big hits
is watching video on your mobile - often movie trailers. This creates
enormous data traffic for the mobile operators, who on the other hand
have made sure that the price of that traffic is not prohibitive, by
offering differentiated pricing on data traffic.
GPRS is perfect to teach mobile users that they can use their mobile
phone for more than just talking and sending SMS's - in other words,
GPRS is perfect to get the mobile consumers ready for 3G. The European
mobile operators still need to get many more services available over
GPRS - and there are very many applications that will work fine on the
speed that GPRS can offer today, thereby preparing mobile users for
a future where the mobile phone becomes much more of a personal assistant,
with a wealth of functions and services, making life easier and saving
time for the user. But already for today's heavy-users, GPRS is too
slow and those people find themselves looking for wireless "hotspots"
or a hotel offering ADSL in the rooms, to keep up with their workload
- both options that will cost you extra anyway and may make you go out
of your way to get connected.
If the mobile operators are worried about the success of 3G and mobile
services on 3G, they need think no further back to when the first consumers
went online over ADSL instead of a dial-up modem. Back then, everyone
thought that those consumers would not actually surf more on the Internet,
but just spend less time waiting for content to download. In fact, when
people get ADSL they surf much more, for much heavier content and for
longer periods of time. Exactly the same scenario has happened on mobile
phones in South Korea, where ARPU (Average Revenue pr. User) is over
3 times higher on 2.5G mobile phones than it is on 2G.
MMS is a fine example of a light mobile data service that works fine
over GPRS and will in 2005, account for around 20% of the total value
of the market for mobile data services. Mind you, if I ever see a grizzly
bear in my tent, the only MMS you'll get from me is a photo of me running
as fast as I can in the opposite direction!
The latest report from Strand Consult "How to make money on mobile
services" a picture of the current & future Market for Mobile
Services in Europe shows that in 2005, non-voice ARPU (average revenue
pr. user) will account for 32% of the mobile operators earnings and
have a total value of Euro 23 billion. Of that, under 2 billion will
come SMS based mobile services and the rest from new technologies based
on MMS/WAP, Browser based applications and JAVA.
The report takes into account the mobile operators sluggish approach
to GPRS and those services that will function much more optimally on
a GPRS platform and goes through in detail all the prerequisites from
all the players in the mobile marketplace that need to be in place,
before the new mobile services market really can take off.
