Forget about 3G speed. Bring on the services.
“Today’s network speed and coverage are more than adequate for most of the so-called 3G services,” said Matin B. Dunsby, global wireless initiative leader of Deloitte Consulting, echoing the often understated fact that the glorified services anticipated in the next generation of technologies are already available in the market.
At the UWCC Conference in Orlando in early May, AT&T Wireless’ Chief Technology Officer Rob Nelson also emphasized the point, noting that the United States’ frenzy over spectrum may not frustrate the rollout of some of the 3G services that present networks can support.
In the corporate space, the services include field sales, field services and supply chain visibility. For consumers, the services include video messaging, advertising and Web browsing, said Dunsby.
Telecompetition Inc., a market research firm that also investigated 3G services, identifies the services as Internet access, Intranet/Extranet access, customized infotainment, multimedia messaging services, location-based services and rich voice.
“Note that high data rates, real-time and machine-to-machine communications could be a component of all six service categories,” said Telecompetition in its report: “UMTS Third-Generation Market-Structuring the service revenue opportunities.”
“There is some doubt within the industry that high data rates will be a major factor driving demand for 3G services.”
The study also says that a majority of analyst reports agree that applications below 384 kilobits per second will dominate demand for 3G for the next 10 years.
While consumer services have not caught on, the corporate space is already taking advantage of the services and operators are concentrating on corporate customers because they are a viable source of revenue.
802.11b is another area in which the wireless industry is looking to generate revenue with 3G-type services.
“It is faster than 3G networks and it can be a component of 3G services and it is independent of handsets and devices,” said Dunsby.
He said corporate customers do not need 3G-style speed to prosecute their daily activities, are ready to pay the charges billed by their carriers and are guaranteed of returns on their investments.
The obstacles in the consumer space are handsets and the unwillingness to pay for the services, said Dunsby.
“The size of the keyboard and the size of the screen are the limiting factors,” he said, noting that the sizes have to be bigger to capture the interest of the consumer.
Gartner Dataquest just released a survey that indicated most 3G customers are not willing to pay more than they already disburse for 3G services.
“That’s why operators are more interested in enterprise,” he said. Dunsby referred to the RIM BlackBerry device as an example of the services with a slow network, using 20 percent of the speed of an average dial-up connection.
Consumers have been made to expect to pay less for services, which makes for a more difficult business plan since carriers have to contend with paying for spectrum.
“For the carriers, the benefits are higher with enterprise, so they go to where they would get more revenue,” he said. “Corporate is the next growth area.”
Industry experts have often said that the problem with 3G has been more of perception than reality, noting that the consumer does not know much about the workings of networks but only cares about services.
“Inevitably, the boundaries between these service categories are somewhat artificial, and there is considerable overlap between categories,” said the Telecompetition report. “Whether an individual service offering falls into one category or another could be the source of protracted (and ultimately fruitless) debate.”
Dunsby said the difficulties arise from three aspects of 3G which include the technology standard and how the devices connect to the networks and transfer calls, applications and advanced handsets with color screens, touch-sensitive screens and rich voice.
“In the popular press, all blur together,” he said, saying that the services are what matter to the end-user.
