3G Video Calling: Priced Right Out Of The Market - report by Tarifica

March 12, 2007

One of the big treats being touted by some for 3G mobile broadband is the ability to do video calling over one's cellphone or other wireless widget.

Broadband Business Forecast's sister division Tarifica has taken a look at why, as of now, the concept of video calling has been an abject failure in the marketplace. Among other things, the group come to the conclusion that nobody wants to pay the price.

Video calling is a service that allows a person to call another (just like a standard voice call) and allows them to see each other during the call.

To use video calling, both parties must have a 3G video-enabled mobile device, and each must be in 3G coverage areas, although EDGE coverage may be enough to have a successful call.

The service has uses for both consumers and business customers. For consumers, video calling is a good way of parents being able to actually see their children while making a call. For business customers, the ability to hold video conferences via a mobile device is considered an important application by some.

To date, video calling generally is thought to have had a sluggish start, with uptake being quite low. Reasons for this include:

* Lack of networks that support video calling (even though 3G itself is supported)

* Lack of compatible handsets

* Marketing of video calling has been almost nonexistent

* The service is expensive

It is the last point regarding the price of video calling that Tarifica is evaluating. A comparison of making a video call versus a video call among a selection of mobile operators has been made. Not every operator that provides 3G video calling is listed but an idea of the price can be ascertained. All prices refer to domestic calls.

At the New York World's Fair in 1964, AT&T unveiled its Video Phone. Back then, a three-minute video call from Washington DC, to New York City cost $16. Between New York City and Chicago, the tab was $27 for three minutes. No wonder the service never caught on.

More recently, at this year's Consumer Electronics Show in Las Vegas, Broadband Business Forecast was treated to an endless stream of video-phone demonstrations - both fixed (almost all making use of broadband and VoIP) and wireless (using spiffy 3G).

In each case, the prices we were quoted amounted to hundreds of dollars for the gear - prohibitive even for the VoIP-based services where domestic calls don't cost "by the minute," especially because you need compatible gear at both ends.

It was, though, a riot watching the folks from the newest "new" AT&T (i.e., Cingular) walking around demonstrating how they could send live moving pictures from one little handset to the other. Of course, the price of such a service wasn't discussed - we wonder what Cingular will try to charge. At least now we know what some other cellular carriers around the world are asking. And while 3G wireless broadband sounds sexy, we're not surprised that mobile video calling isn't selling.