Finally some light in a very long tunnel
By Tomi T Ahonen, 3G Consultant and Author
(Tomi Ahonen is a course presenter on our 3G Services and Business Opportunities and UMTS: System Design and Operation courses).
The global journey towards 3G next generation mobile services has seen incredible euphoria and hype peaking in 2000, followed by remarkable panic and despair now, two years later. The 3G licence auctions, held at the peak of the excitement drew enormous bids for licences, and most “winners” of the auctions have suffered investor backlash being accused of overspending. Few doubt that eventually advanced wireless services will prevail and advanced mobile phones will replace our current models. Equally most new service ideas were only theories and would need new partnerships, new business models and even radical rethinking of revenue-sharing, etc. Amidst all this there are numerous doubts about which technology will emerge as the preferred one, and even more which of the major players will manage to turn the opportunity into profits.
All through 2001 the industry, bankers and media were asking “what are the 3G services” and “how can anybody make money from 3G”. After 3G was introduced in Japan, Korea and the Isle of Man, the first light became visible in the 3G saga. The facts started to emerge that users were eager to use new services like picture messaging and video calls. At the same time, with the older generation of the technology the various new business models for micropayments, mobile commerce, entertainment, news, music, telematics and mobile advertising started to emerge in individual examples in countries such as Finland, Italy, Czech Republic, Hong Kong, and the Philippines. New consumer behaviour patterns with wireless services were identified, such as reachability, and service creation rules for the new wireless environment were invented, such as the Five M’s. As these were publicised, the industry was learning to build compelling new services. By the summer of 2002 a new confidence was emerging in leading cellular countries that 3G would be viable commercially.
The industry is facing a period of uncertainty for the next few years. Some operators, such as Hutchinson in the UK and Sonera in Finland, are keen to launch 3G this autumn. Their rivals will be following their market entry with great interest. As with the transition from the first generation (analogue) cellular networks to the second generation (digital such as GSM) cellular networks there will be predictable early concerns. A lack of handsets, poor network coverage, higher costs and a disappointing lack of new services will be issues that are faced in most 3G markets. The industry will overcome these matters in due time.
What is important to bear in mind, is that 3G is the ultimate convergence of the various communication and content media, combining voice and data, fixed and mobile, telecoms and internet, digital content and delivery. While many other technologies such as digital TV, Bluetooth, W-LAN (WiFi) and satellite can provide a partial solution, and thus be part of the ultimate digital convergence, at the core centre of the convergence will be 3G. Any company involved in the digital convergence will need to understand the disruptive nature of 3G, as 3G will provide both a threat and an opportunity for any industry approaching digital convergence. In some industries like magazine publishing, the role of 3G may be small, of the magnitude of 5% to 10%. But in other industries such as gaming, the role of 3G can be totally cannibalising, taking as much as half of the revenues of the industry.
The effects of 3G will eventually be all-pervasive, with copycat solutions deployed across all companies in given industries. The new location-based mobile services are already bringing about a revolution in how service technicians are dispatched in Israel, or how trees are cut by the lumber industry in Sweden, or how doctors make house calls in Paris. The automobile industry is already deploying intelligent car solutions based on current cellular technologies and is awaiting the opportunity to launch more advanced - and profitable - 3G based solutions. Companies far removed from the digital content industries, such as vending machines, and rock concert ticketing, and public transportation, are adapting mobile phone based solutions to save money and improve customer service.
There are already more than twice the amount of mobile phone users than internet PC users in the world. By 2003 there will be more mobile phones than TV sets. Before the end of the decade there will be more mobile phones than radios around the world. More than just the numbers, as the mobile phone is the only other device apart from the wristwatch, that we carry with us every day everywhere, the mobile phone provides a unique service platform for any urgent, private and sudden service needs, ranging from sports score updates to banking services, to the sudden need of a map if one is lost. The mobile phone is the only device capable of serving such needs, and as new services are launched, such needs can finally be met.
One year ago it was difficult to justify the vast new investments in 3G, as most service ideas were only theories and no evidence existed to validate the concepts. Today the proof is emerging and real competitive decisions can be taken to capitalise on the new opportunities. Even more so than the internet, the new wireless services opportunity highlighted by 3G will invade every type of business and be a key to success and profits. Prudent executives should immediately become aware of the 3G opportunities and threats, to be able to prepare to survive – and win – in the emerging new environment.
The University of Oxford Department of Continuing Education has taken a leading role in developing the understanding in 3G and other advanced wireless services. Following on from its courses on technology, the University has started to run 3G Business, Services and Marketing courses to assist in expanding the knowhow in how 3G business will be different from current cellular telecoms and current fixed internet businesses. Oxford University’s courses illustrate the latest examples of emerging new mobile services from around the world and features lecturers who have published the world’s first books and reports on 3G Business, Services and Launch Strategies. A basic two-day course is provided to explain the business and services of 3G and related technologies. An advanced two-day course is provided to explain early adopter needs and how new 3G services can be launched. For more on the courses, lecturers and fees, please see www.conted.ox.ac.uk/cpd/electronics/.
Tomi T Ahonen is an independent 3G consultant and author of books m-Profits, Services for UMTS, and 3G Marketing.