Some aspects of 3G are discussed to reflect its troubled journey through the time and how the operators are grappling with the issues that they did not want in the first place. The writer has made some recommendations on how these issues can be best managed.
Evolution of HSPDA (High-Speed Downlink Packet Access)
More than 60 mobile operators worldwide have introduced HSPDA – a variant of UMTS, to address the growing need for bandwidths that are comparable to those offered by fixed broadband. This need has primarily come from laptop users, who are either located at remote locations or at places not currently serviced by fixed broadband. This technology is specifically designed for Internet access and achieves an increase in the data transfer speeds by defining a new W-CDMA channel: a high-speed downlink shared channel (HS-DSCH) that operates in a different way from existing W-CDMA channels and is used for downlink communications to the mobile.
Migration of 2G voice customers to 3G
Most 2G mobile operators with established 3G networks are migrating their customers to it to take advantage of higher spectrum utilization of 3G networks and market pressure to establish a claim to a large number of 3G customers. Interesting enough, a very large number of 2G operators have build their 3G business cases around voice, knowing fully well that that 3G data revenues will contribute very little to the bottom line in the near future. In terms of percentage more CDMA operators have migrated to 3G networks than GSM. CDG claims that up to 80% of the 3G subscriber base worldwide use CDMA2000 devices and services and close to 8.5 million new people subscribe to CDMA2000 services every month.
Operators are launching 100 services, hoping at least one succeeds
After having made a financial success of 2G services, the 3G success was perceived to be a cake walk. Having struggled with 3G over the past three to four years, the operators are now desperate for success. The desperation is manifesting itself in an interesting way- It the operators have taken to launching one service after the other, hoping at least one succeeds. The operators are in fact constrained by 2G mindset and the legacies that they are not able to shake off. Unlike voice, which has been a commodity for a while, the other data services are technology enabled applications that require specific high technology marketing models to sell it to a population that has more than 80% technology conservatives
Operators are treating mobile data service to VAS
With heaps full of dollars still coming from mobile voice, they have an unflinching faith in its future. Mobile operators are positioning and offering data service as VAS to voice, which takes the focus away from these services and significantly reduces their revenue generation potential. Many of these services have a revenue generation potential comparable to voice if backed up by right “go to the market” strategies.
Mobile TV
Mobile TV is available today through different technologies like 3G, DVB-H, DMB, and MediaFlo each suffering from technological issues and limitations, which makes the whole scenario rather complex. Further more; there has been an attempt to position it as an alternative to home TV and also use the same content, which I guess is absolutely suicidal. Mobile TV is altogether a different concept than home TV, addresses an “on the go” market and thus requires a different “go to the market strategy”. Some of the perceived success stories are services from SK Telecom (DMB) and Mobi TV (3G). It is also understood that Nokia is championing DVB-H and also Frost & Sullivan predicts that “DVB-H is likely to become the European standard and delivery mechanism for mobile TV in Europe by 2010 as it perfectly complements the existing digital TV standard and is likely to solve the spectrum allocation issues in the preferred UHF band." MediaFlo is an innovation from Qualcomm and is also catching traction in Europe and elsewhere in the world.
The real success to it will come, when it is positioned as an “entertaining companion”, with content designed to address this need. Also much will depend upon on the design of user machine interface. If the user is required to clasp it between two hands and hold it firmly at a distance from the eyes – this interface is certainly a “no go”. I do see it succeeding, sitting in the front panel of the car and providing a company to the driver of the car. But managing driver’s distraction is a major challenge. In this specific application and in other applications as well, the recommendation is that the audio be designed to compensate for the loss of value due to small screen as well as to minimise distraction.
Mobile Music
The key drivers for mobile music growth have been ring tones and ring back tones. They together form a considerable chunk of the total mobile music market. The research firm In-Stat predicts that Asia's mobile phone users could be spending more than $9bn a year on ring-tones and music for their phones by 2010. This growth will come largely from India and China, however, Japan will maintain its dominant position in the region. The major driver of the growth will be the drop in the bandwidth prices due to the large scale availability of 3G. This will make full music tracks available at prices competitive to DVDs
The discussion on Mobile Music can never be complete without making references to the Japanese success stories. As matter of fact Japan gets the total credit for the current state of the art mobile music. Eurotechnology estimates the current size of the mobile music in Japan is US$ 1B and is rapidly growing. Japanese, since last seven years created new markets for music, which did not exist before. This includes monophonic ring tones, polyphonic ring tones (Chaku –Melo), introduced by NTT DoCoMo in 1999 on i-mode, 20-30 seconds musical clips (Chaku-Uta) introduced by KDD/AU in MPEG format in December 2003. KDDI/AU introduced full song downloads (Chaku-Uta-full) in October 2004 and were empowered by EVDO/CDMA2000. Today, the state of the art mobile music is a full song downloaded by phone models that play 3D surroundsound (standard on the FOMA 9001i series handsets by DoCoMo), and combine JAVA applications with sound for a variety of music games and music applications.
Advertising
If 80% of population in any market is technology conservative and is apprehensive of using technology gadgets, the opportunity instead is for the businesses to send consumers messages. Since the operators have a good understanding of the profile of their customers and the latter also carry their mobiles with them, the advertising could be well targeted. GPS based advertising, holds excellent potential as it adds definite value to lifestyle activities. Forrester in its recent report has cited a case study of a grocery store in Cambridge, MA, that has replaced its loyalty card program with a mobile-only approach that delivers users promotions directly to their mobiles based on their past shopping habits and history. To date, 82 percent of the retailer's shoppers have enlisted in the program, the report said, and 64 percent actively use it.
Verizon Wireless has joined Sprint Nextel Corp to allow advertisements with on-deck content. The former will allow banner advertisements on a variety of its on-deck content after its research showed that consumers found short, standalone video ads intrusive. There has been a general caution among the American operators for mobile advertising, fearing a possible backlash from the subscribers, who may find the advertisements intrusive.