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M-commerce's the way for 3G operators to survive: lawyer

date: 14th March 2001, source by: channelnewsasia.com.sg/

Third generation operators must be prepared do m-commerce or risk failure.

This advice from Brussels lawyer Mr George Metaxas, speaking at a symposium Wednesday entitled, "The Digital Marketplace".

And Singapore, which will be auctioning the licenses on April 23 this year, could learn a few lessons from the European experience, said Mr Metaxas, who is with international legal firm Weil, Gotshal and Manges.

"In Europe, the 3G licenses are driven by regulation rather than clear market demand. And the cost of entry for operators is exorbitant. In Europe, total license fees amounted to about 125 billion euros -- this is roughly the equivalent of total European annual revenues from voice telephony," he said.

Licence fees are not the only costs that would-be operators would have to bear, there are also network rollout costs and service costs, reminded Mr Metaxas.

He believes that the only way for 3G operators to overcome the high financing costs, and combat stiff competition from 2G players is to "commoditise" the infrastructure.

"Some of the possible solutions are a resale of the network capacity to MVNOs (mobile virtual network operators), offering of a hybrid of 2.5/3G services or to cooperate in the network rollout, but inevitably 3G operators would need to perform m-commerce, which are economic transactions through the use of mobile devices to survive," he asserted.

According to a study by international research firm Analysis, global m-commerce services could grow to US$230 billion in 2006.

Some of the more promising m-commerce services are electronic ticketing, prepaid mobile account recharging and parking or vending machine payments, said Mr Metaxas.

Just last week in Singapore, Minister for Communications and Information Technology Yeo Cheow Tong announced a huge slash in the 3G licence auction reserve fee from $150 million to $100 million, a move made in anticipation of the change in market sentiment.

 

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