OXFORD, United Kingdom-After all the publicity, time and money spent obtaining third-generation (3G) licenses, European mobile operators are keeping plans strictly to themselves about what mobile applications they might launch to take advantage of this spectrum.
This reluctance to discuss what innovative applications are being developed is put down to “commercially sensitive information.” Or perhaps the truth lies nearer to confusion as to who is the target for these new services.
Industry consultants and equipment developers agree on one aspect of 3G. For today’s second-generation (2G) operators, it will be a vastly more complex world than simply providing adequate network capacity to support voice services. Even more surprisingly, they also agree that entertainment services-particularly online games and music-will become a major driver behind the adoption of 3G technology.
According to Catharina Lundin, m-commerce marketing manager at Ericsson Internet applications, 3G applications being developed now are predominantly targeted at the consumer market.
“What I see within Ericsson and at the major trade shows are applications being written for consumers,” said Lundin. “This segment will pay for the right application as indicated by the enormous amounts being spent by consumers in Japan to use mobile entertainment services. Sweden is also providing evidence of this trend with many teenagers spending almost all their monthly allowance to pay their cell-phone bill.”
However, Lundin accepts that for the 3G consumer market to take off, there must be hundreds of applications.
“But their appeal is unlikely to be global; their success is more guaranteed if they are locally based,” she added. “Things that work in Sweden might not work in Japan or the Netherlands. But there will be some global ones like a movie ticketing application, which could involve a video clip to be previewed on the handset, which we think will help m-commerce take off. It only involves a small payment and must be quick and easy to use.”
It is the consumer, and in particular the youth market, that has caught the attention of many 3G industry consultants. These research firms believe that, while the business sector has provided a consistent and valuable subscriber base for mobile voice services, it is restricted to a finite age and user group. However, the consumer/youth market is seen as a new generation of users that was not around in the formative days of 2G and expect more than mobile voice services.
Demand for mobile entertainment has also been observed outside this user segment, and research indicates games use is no longer the reserve of the teenager. People in the 30- to 40-year-old age group, especially females, are now said to be actively playing online games.
The boom in short message service (SMS) traffic has also provoked the industry to translate this “mystery to the marketing departments of mobile operators” to the 3G arena. Multimedia messaging (MM), which involves the combination of voice and video, is being hyped as the successor to SMS, because it provides a more personal and fulfilling experience for the user. MM is seen as a “sticky” application for 3G operators and is being suggested as a potential “loss leader” to attract and retain users.
However, MM will require high-function 3G terminals capable of supporting full-color video. This feature, said Andrew Jones, a consultant with U.K.-based Mason Communications, will have its drawback in terms of the battery capacity needed to power a color display.
“Handset battery life is perhaps going to be the largest barrier to 3G usage. Battery technology is presently supporting a 2G monochrome display, which can last for something like two days. But with a full-feature 3G phone with color display, this will be cut to one-tenth of the life. So batteries will need to keep up with this, and maybe mobile operators should be considering some sort of other energy source, such as solar or motion battery charging.”
Basing the success of 3G on the unknown world of sending video clips to friends and playing online games sounds a novel, if somewhat shallow, justification for the investment in 3G. As Ericsson’s Lundin cautioned: “Operators need to look more into the future, and have a clear idea of what customer segments they are targeting-in other words, a strategy.”
