Subject: [NEXTEL-1] Article: 3G needs more than technology to succeed

From: Marcel <[email-masked]>
Date: Sat, 02 Nov 2002 18:11:26 -0500

------- Original Message --------
From: "Seed Maqbool Hassan" <[email-masked]>
Subject: Article: 3G needs more than technology to succeed

3G needs more than technology to succeed
by Syed Hassan

3G is a technology platform using data services at its heart and 
voice services as a standard or piggyback (not even requiring 
mentioning). For 3G to succeed, it is important that the consumer is 
ready for the data services as wel. In Europe, 3G is being launched 
by Hutchison 3G and Hutchison 3G Italy, both of Hutchison Whampoa 
group.

It seems that Hutchison has got positive impressions from the users 
of test handsets it distributed to several thousand people in UK and 
may be in Italy. The handsets orders have been raised from 1 million 
to 2 million handsets. 

>From 4th November, Hutchison 3G Italy will sell its handsets online 
and Hutchison 3G UK will follow later in the month. Previously, the 
news was that Hutchison was to launch in the 1st quarter of 2003. 
Perhaps, the lure of Christmas sale has made the launch date 
earlier.  

But, the outcome of launch in Christmas will depend on the costs and 
benefits to the consumer. Something like this will exist one month 
from now: You are  offered a handset (called 3G), with monthly 
package of around 85 Euros or 50 GBP, mobile internet which is 
unlimited but on handset that is really designed for voice dialling, 
bigger colour screen but that is too small for today's complex web 
sites, data rate capability of around 128 kbps that you can really 
use in case you have a notebook compiter, data services that you may 
find attractive if you are a technology buff like an avid reader of 
T3 magazine, a camera that sends the VGA pictures with not so great 
video streaming as originally told to press, location based services 
that depend on triangulation (observed time of difference of 
arrival, OTDOA) and GPS (only works in open spaces) and depends on 
subscription of shops to the database.

A bit low picture, but some of it will improve as the technology 
will go ahead, like location based services, video streaming and 
data services and the reduction of cost of handset and the package 
price(if the 3G network operators accept lower ARPU to save them 
from losses), but limitations of display size (because it is power 
hungry too) and keyboard will continue unless you are prepared to 
use Olympus glasses.

For network operators, the drive for 3G was to have more capacity 
and more ARPU (average revenue per user), and we need to see if 
consumer can pay more. A recent news from a leading bank says ARPU 
that customers can pay is around GBP 21 per month. And, from 
technology point of view, much hyped terminals e.g. xda from O2 has 
not been very appreciated from the consumers. How many xda's you 
have seen with consumers? not very many. They have another reason 
not to buy it, oh, it is very big, but, to have a larger display, it 
has to be bigger. It is tradeoff between display size and the 
handset bulkiness.

Let's wait and see. It is like VHS and Betamax war. VHS or good old 
GSM with GPRS is cheap and wide spread, and Betamax is like 3G 
(UMTS), a better technology that comes at an additional cost and not 
so much supported. Which one wins will be clearly evident in the 
first three months of launch dates of the 3G networks. Ultimately, 
the networks will be 3G far away down the line, but we are talking 
in terms of a bit sooner.    

At the same time, network operators hould not forget the game 
platform wars. Much advertised XBox failed to get UK market during 
Christmas because it was simply too expensive as compared to Play 
Station 2 and even more with Nintendo Game Cube. And, what happened 
later? The price of XBox was lowered much less than it was 
advertised initially. But by that time, it lost much of its launch 
sales. Apart from the price, the games are quite good in Game Cube 
and graphics good enough for general consumer, so Game Cube has been 
popular depite lower ratings in advertised graphics benchmarks. The 
conclusion: not always high tech wins, there is more to get the win 
for a new technology.   
 
Best regards
Syed Hassan

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