Qualcomm and Teleepoch
Enter Into a 3G CDMA Subscriber Unit License Agreement, October
6, 2007
MTN chooses Cambridge Broadband
Networks for multi-service wireless network in Rwanda, October 6,
2007
Brazilian government to
publish 3G bidding rules soon, October 6, 2007
KTF 3G service suffers
from technical problems, October 6, 2007
Argentina’s Personal
lunches 3G service in Rosario, October 6, 2007
Russia has it's first 3G
network, October 6, 2007
AT&T could drop Alcatel-Lucent
as 3G mobile network supplier, October 6, 2007
Enea Extends License Agreement
with ZTE for 3G Handsets, October 2, 2007
LG to unveil premium handsets
in Brazil, October 2, 2007
KTF 3G subscribers doubled
in less than 3 months, October 2, 2007
3G policy in India will
be non-uniform, October 2, 2007
- previous news
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UMTS increases data profitability
January 19, 2004
Key to profitability is understanding which applications and services
provide the greatest margins. The most profitable services - those that
occupy the sweet spot -- maximize AMPU (Average Margin Per User), not
ARPU (Average Revenue per User).
This analysis is published in a new white paper by The Shosteck Group.
UMTS - THE DATA STORY: PROFIT OPPORTUNITIES FOR OPERATORS is a follow-on
to the firm's earlier white paper, UMTS: WHEN AND WHY IT WILL HAPPEN:
TIMETABLES AND FORECASTS. In that earlier paper, the firm showed how UMTS
will provide increased network capacity and as a consequence, lower operator
costs, particularly in terms of voice.
UMTS - THE DATA STORY: PROFIT OPPORTUNITIES FOR OPERATORS quantifies
the extent to which UMTS will lower operator costs, how far operators
might reduce tariffs, and the extent to which such reductions will increase
data traffic, revenues, and profits. It concludes that by expanding traffic
exponentially, UMTS will reduce the full costs per byte by 3.5 to 5.2x
below those of GSM-GPRS.
It then examines how UMTS operators can accelerate data traffic and generate
additional revenue - and profit - from data services.
Central to this is the "sweet spot" analysis which characterizes which
applications and services will prove most profitable.
"UMTS increases the sweet spot in two ways," stated Dr. Herschel Shosteck,
President and Chairman of The Shosteck Group. "First, UMTS lowers the
cost of delivery, enabling operators to charge less. Second, UMTS enables
improved services - higher image resolution, faster delivery, larger and
more functional applications, and better Quality of Service -- critical
to the success of data offerings. If services under-perform (poor quality),
users will not adopt them. Improved services at lower charges mean that
more people will use them and do so more often," he continued.
In the center of the sweet spot are services which (1) have high value
to end-users, (2) perform well, (3) are inexpensive to provide, and (4)
can be delivered in large quantities. These will be the most profitable.
"Video-telephony is highly hyped. It is the flagship service of Hutchison
3G. It is also offered by NTT DoCoMo. But it's unlikely to prove profitable
for operators over the near term," stated Jane Zweig, Chief Executive
Officer of The Shosteck Group. "Three factors devalue it - technology
immaturity, limited network coverage, and potentially high pricing. Given
the above, video-telephony, at present, fails the sweet spot test."
However, Ms. Zweig noted that with time and continued network build-out,
maturity issues will be resolved. UMTS will be fully mature by late 2006.
By then, video-telephony may be built into a majority of phones, much
like camera phones in Korea today.
Rather than video-telephony, The Shosteck Group points to multimedia
services - in particular video-streaming - as a far more attractive proposition
that cost less to deliver and provides the potential for greater margins.
"Over the near term, operators who focus on simpler and less expensive
UMTS services are most likely to profit," commented Dr. Shosteck. "Nonetheless,
with time, handsets will become more sophisticated. Networks will mature.
These will enable operators to deliver more complex services than are
feasible, at present, and to profit from them," he continued.
"The value of services will increase. This will enable operators to support
specific market segments with highly focused offerings," Ms. Zweig pointed
out.
These market segments will encompass:
-- Consumer multimedia services. These include NTT DoCoMo's i-mode and
Vodafone's "Vodafone Live!" Such services are still being delivered on
2G or 2.5G networks. However, UMTS will enhance their quality and functionality,
as well as reduce their cost of delivery.
-- High-value markets. These include enterprises and vertical markets,
which have specific mobile requirements. In many cases, the applications
these customers require aren't economically justifiable over 2.5G networks.
-- New devices. These will support applications outside the sweet spot
of current networks. Examples are camera phones, which take very high-resolution
pictures, and PDAs, which support interactive services originating from
the Internet.
-- Small-to-Medium Businesses (SMBs). These will use off-the-shelf software
to connect office applications to mobile devices.
-- Mobile laptop users. With UMTS providing a wide-area alternative to
Wi-Fi and GSM - with greater cost-effectiveness -- this market expands.
"These segments aren't new. But with increased network capacity, lower
costs, and all-IP networks (with Release 5 and beyond), UMTS operators
will be better positioned to serve them," Ms. Zweig stated. "Lower rates
will attract customers beyond the classic 'road warrior.' This will increase
revenue and profit for all UMTS operators."
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3G Motorola A920
