3GNewsroom.com Weekly Round Up and Comments
David Yuen - December 2, 2002
Our round up and comments of the past week's main stories from
our editor.
******** THIS WEEK ********
- Confusion over MMS could stop it being a big revenue generator
- Hutchison's 3G subscription target is too optimistic
- Bad news for Hi3G as Vodafone's delay application is rejected
- MobilCom becomes a 3G casualty
****************************
>>> Confusion over MMS could stop it being a big revenue generator
A report published by Juniper Research concluded that MMS has the
potential to generate revenues in excess of $8.3 billion by 2004
but must meet certain conditions. These include: i.) operators must
implement cross network MMS ii.) affordable MMS enabled handsets
must be made available.
MMS enables a wide range of mobile information and entertainment
services that will generate $5.6bn compared with $2.7bn for Peer-to-Peer
messaging. The report is a boost for the 3G industry which sees
MMS as a killer application. But a study by 3G Lab shows much confusion
over MMS amongst consumers.
Test subjects were unsure what the term MMS meant and were so confused
by the menu systems of MMS-enabled phones that they were unwilling
to send photos via MMS to other phones.
Whilst testers found taking a photo relatively easy, sending the
image to another phone was a much more difficult task, because menu
systems on the phones did not tally with the consumers' expectations.
Steve Ives, CEO 3G LAB said, "These results suggest that handset
manufacturers and operators need to work hard to make MMS easier
to use if they are to start building decent revenues."
Confusion amongst users could slow revenue generation from MMS
but it's nothing to be worried about as users need time to familiarise
themselves with the new terminology. SMS faces the same problem
even now but users are more familiar with the terminology for SMS.
Menu names for SMS vary from 'SMS', 'TEXT' and 'MESSAGING', but
users get along fine with these. You have to remember that SMS took
off in some countries only a few years ago and before then demand
for SMS was low. The scenario for MMS will be similar, especially
when there is few MMS handset owners for users to sent messages
to.
-- Juniper Research: MMS Revenues to Reach $8.3bn by 2004, But
With Conditions
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/11
-26-2002/0001848240&EDATE=
-- 3G Lab: Warning bells ring, are you listening?
http://www.3glab.com/pressroom/pr24.html
>>> Hutchison's 3G subscription target is too optimistic
The Hutchison 3G business plan for UK, which the FT got hold of,
seems very aggressive even when it was drawn out two years ago amid
the hype over 3G license auctions.
In the plans, the operator hopes to attract 5.2 million users in
the UK by 2005. By the end of this year, it should have 1.5 million
subscribers, but it's obvious that Hutchison won't have its predicted
number of subscribers by year-end. Even if there is enough interest
from the public, there won't be enough handsets available!
Another target for the operator was that an average user would
spend £50 a month. This target may seem big when compared with average
monthly spending by today's users, but is obtainable after a few
years or so. Voice communication and SMS are activities most used
by UK mobile phone users, and charges for these are relatively cheap,
so monthly bills would not be huge. When 3G comes along, voice and
SMS will probably be charged around today's prices, but new data
contents (such as video) will also be charged and MMS is likely
to be charged more than SMS. It is not difficult to see that monthly
bills will be exceeding those of today's.
The monthly plans proposed by Hutchison in its survey of 15,000
consumers will help it establish the £50 a month target. By far
the most popular tariff was the £65 a month all inclusive package,
allowing unlimited calls (voice and video) to any mobile and landlines.
If the result represents the interest of the population, then reaching
the target is not a problem.
Hutchison of Italy has two official tariffs priced at 85 euros
and 140 euros per month allowing virtually unlimited calls to all
networks and landlines. Data content download is also included in
the monthly allowance. The tariff rates seems reasonable for what
users are getting.
-- FT: Hutchison sets aggressive 3G vision
http://search.ft.com/search/article.html?id=021124003062&query=hutchison&
vsc_appId=totalSearch&state=Form
-- FT: Hutchison 3G in UK tariff talks
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory
&c=StoryFT&cid=1037872187253&p=1012571727307
>>> Bad news for Hi3G as Vodafone's delay application is rejected
The Swedish telecom authority PTS rejected Europolitan Vodafone's
application for a delay in its rollout of 3G services. Orange was
the first operator to be rejected by the PTS for a similar request.
The PTS did not agree that Vodafone's reasons to be good enough
to change the conditions. Both Orange and Vodafone said they faced
delays in obtaining building permits for mast from local authorities,
but the PTS said they should have anticipated the problems.
The news is most unfavourable for Hi3G, which also applied for
a delay in the deadline for 3G rollout, but the result has yet to
be announced. Hi3G's reasons for wanting a delay would be similar
to those of Orange and Vodafone - problems in getting building permits
and lack of handsets. If the PTS is consistent in its decision then
it is most likely that Hi3G's application will be rejected as well.
If not, the PTS will face legal challenges from Orange and Vodafone
asking for a turn around in its decisions.
>>> MobilCom becomes a 3G casualty
MobilCom became the latest casualty in the 3G mobile phone industry.
The operator announced a total of 9.9 billion euros write down with
7.1 million euros taken up by France Telecom. Now there are only
four 3G operators left in Germany which also lost Quam back in October.
Casualties in Germany were not unexpected. With six operators serving
the whole population and with each operator having spent billions
on 3G licenses, it makes recovering the cost that much tougher.
Oniway exited from the Portuguese market earlier this month and
its assets most likely to be sold to the 3 remaining operators.
There are too many operators compared with the population, 4 operators
for a 10 million population.
Is MobilCom the last operator to abandon its 3G ambitions in Europe?
Not likely.
****************************
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