Expert panel discuss 3G's prospects in run up to 3G World Congress
February 19, 2004
Organizers of the 3G World Congress and Exhibition announced the 2004 event, which will be held in November in Hong Kong. A panel of mobile industry analysts forecasted the major issues and opportunities anticipated in the months leading up to the 3G World Congress & Exhibition.
In a wide-ranging discussion, the panel identified the critical success factors for 3G mobile services, with a focus on developments in Asia, and particularly Hong Kong, where Hutchison recently debuted its "3" 3G service.
Moderated by Ross O'Brien of Intercedent Asia, participants included Dr Lawrence Cheung, Principal Consultant, Mobile Business Solutions at the Hong Kong Productivity Council; Virat Patel, Managing Consultant at PA Consulting Group; Dr Tsang Kim Fung, Associate Professor at the City University of Hong Kong; and Daniel Kirwin, Managing Director, Asia of IIR, the organiser of the 3G World Congress and Exhibition.
3 shows the way
The panel was positive about the start that Hutchison has made with its 3 service:
"What Hutchison has done right is that it has waited for what it believes is the right handset," said PA Consulting Group's Patel. "This is such an important part of the user experience, especially in HK where consumers are so demanding. We think consumers' demands will pose challenges and will stretch the industry, particularly in terms of greater price pressure.
IIR's Dan Kirwin said "Here in Hong Kong, Hutchison needs to get it right. I think that when their salespeople can explain to consumers what 3G is, once [Hong Kong consumers] get a look, they're going to use it."
"Mainland operators view Hutchison with great respect, and will be watching the experience of 3 in Hong Kong very closely," Kirwin added.
Lawrence Chung pointed out some learning for Hong Kong from overseas. "The early roll outs in Japan, as well as Britain and Italy - coverage, handset size and looks, and battery life - are being resolved," he said. "One lesson from Europe has been that in conservative Britain, take up has been slow. In Italy, on the other hand, 3G is a fashion symbol. This definitely has a bearing in Hong Kong."
Hong Kong's opportunity
According to Lawrence Cheung, the implications of 3G in Hong Kong go beyond the operators alone.
"3G gives Hong Kong the opportunity for convergence of three industries: telecom, IT devices and media. It's an opportunity in particular for Hong Kong to develop the media side of the business," he said.
Cheung also pointed out the Mainland dimension: "China is such a different and complex market. Hong Kong's opportunity is to help medium-sized companies access the Mainland market; bring them in, help them localize, find a partner then attack the Mainland market together."
Hong Kong's opportunity is also regional. According to Ross O'Brien, 90% of 3G subscribers today are in Asia. "Asia is clearly the foundation for the next generation of telecom services," he said.
Dan Kirwin added that approximately 70% of the world's existing mobile subscribers are within a short non-stop flight from Hong Kong.
Video and security
Video has been identified as one consumer benefit of 3G services. The panel discussed the relative merits of various applications.
"There's definitely appeal in video, but to a variety of relatively narrow segments - especially among the young, said Patel. Will they generate sufficient take up? "It's hard to say. Support for voice will remain important," he said.
According to Tsang Kim Fung, data is going to be key in the 3G era, and in this context, 3G can offer far greater security than ever before. "On 2.5G, services based on WAP have faced some security concerns. 3G on the other hand can make the idea of paying bills with your mobile phone, for instance, a reality. So there are even 3G services for the over 30s!" he said
Patel noted the importance of perceptions, especially in terms of security. "It will take ongoing education and demonstration to enable consumers to distinguish between what is real and what is perceived," he said
Dan Kirwin also identified the corporate market as a potential growth area for 3G services. "What's often been ignored is how much business can potentially come from the enterprise," he said. "With 3G, operators can offer increased services packaged for large accounts. As someone with P&L responsibility, this appeals to me."
"Hype...overestimation...despondency...underestimation"
For the coming months, Lawrence Cheung predicts a high initial take up rate in Hong Kong for 3G services, driven by the operator's competitive pricing of handsets and service plans.
"After a while, when the novelty has worn off, it will become a case of whether the operators can offer good enough services," he said. "By November, 3 will not be the only operator, and we will begin to see some distinctly different approaches."
Tsang Kim Fung added that he expects prices to have decreased by at least 10% by November.
According to Virat Patel: "We've found that with many new service introductions there is a cycle of hype, overestimation of the market, despondency and pessimism, leading to underestimation of the market. We think 3G will follow that path. By November there won't be enough handsets to really gauge consumer appeal, but it will be clear what the early adopters are going through."
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