How free 3G could unlock mobile age

date: 25th January 2001, source: unison.ie

Operators would spend more on R&D and services argues RONAN TYNAN.

IRELAND has a unique opportunity in allocating its 3G mobile phone licences to help turn this country into a major centre for content and software development for the wireless internet, as well as helping to guarantee low mobile phone charges by giving them away free of charge.

The first time this country held a 'beauty contest' for a mobile phone licence, it only charged £15m virtually free of charge without any real conditions to help guarantee lower charges for users, when it could have auctioned it off for over £100m.

What happened? We ended up with the highest mobile phone charges in Europe, and we are still waiting for the third operator to get up and running after significant delays due to litigation.

This time even charging a fee, say £100m for each of the four 3G licences to be offered in Ireland, means we will probably again face litigation, especially as happened in Sweden recently, if one of the existing operators here is not awarded one of the licences.

We will also throw away the opportunity to guarantee real competition while missing the chance to make the potential operators create conditions here that could allow us to become a centre of excellence for the future mobile broadband internet the beginnings of the true Mobile Information Society!

But why free of charge? There are two main reasons: firstly, it sends a signal to the world that Ireland is serious about achieving the twin objectives of getting the operators to innovate rapidly and spend seriously on research & development especially in content development as well as delivering lower charges.

Secondly, and even more importantly, one has to create a solid legal framework to ensure the operators deliver on these conditions.

Giving them away free establishes a clear transaction between the State and the would-be operators, giving them no defence if they do not deliver, while allowing them more resources to meet those conditions.

This approach makes strategic sense for Ireland as a major exporter of software with an emerging profile in the wireless software market, not least because the technology sector is very fickle and changes with lightAs we know from the collapse of the share prices of the world's mobile operators and the telecom sector generally, the money invested in 3G licences has destabilised the balance sheets of most of the major operators.

They have spent the last several months refinancing their operations, from issuing debt to proposed share offerings (now very difficult in current conditions), as well as disposing of assets.

One leading telecoms research firm, the Forrester Group, even forecast that, "3G will be remembered as the trigger that imploded the European mobile sector."

Ireland has a unique chance to show leadership in what will be a multi-billion pound industry spanning the globe, as well as positioning itself to capitalise on what is one of the most frightening shortcomings of mobile operators in Europe; their failure to create even the beginnings of a successful mobile wireless internet experience for customers.

Looking at the current statistics for mobile or wireless internet users, it is clear that, compared to Japan and Korea, Europe is not even at the races! For example, Japan boasts over 80pc penetration, with Korea approximately 10pc and Europe a good bit less than 10pc.

These figures are constantly changing but, despite Europe's traditional dominance of the mobile phone market, it is clear that Asia is about to assert itself in a dramatic way.

Meanwhile, Charlie McCreevy must now decide on how much to allow the Director of the Office of Telecommunications to charge for our four 3G licences.

If we want to achieve competitive prices for users, and some kind of impact in what will undoubtedly be a massive industry in the next ten years, he should make the operators of our 3G licences prove they are up to it.

He should place strict criteria on what they have to do in terms of content creation, customer offerings, open access to their networks by Irish content developers, and R&D projects which offer the potential to create killer applications.

These could be leveraged internationally to the advantage of this country (a much better return long-term than a few hundred million up front, especially at a time when the State's coffers are bulging).

* Ronan Tynan is an award winning filmmaker and joint winner of 1999/2000 TV Journalist of the Year Award.

His Esperanza Productions is currently filming in Japan, UK, Finland and USA for a TV documentary on 3G.

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