3G mobile struggles to win affection

By : |September 30, 2003 0



By Jennifer Tan

SINGAPORE: Multimedia third-generation (3G) mobile technology looks set for an uphill battle in Asia, after a rocky start in Japan, because of high prices and sometimes poor quality of service.


While some telecoms operators are cautious about the technology, which delivers high-speed transmission of data and video to mobile phones, analysts said operators would take a gamble on it in the hope of generating higher returns per user.



They also need the additional spectrum for data services to ease pressure on existing voice networks.


Natasha Tan, analyst with research firm International Data Corp (IDC) Asia Pacific, said demand for 3G would only take off at least three years after its commercial launch.


“In some Asian markets like Malaysia, customers have to get used to mobile data services first, and so far, GPRS (General Packet Radio Services) usage has not been that strong,” she said.


Other issues include expensive 3G handsets — costing more than US$500 each — and the unstable new technology.

Subscribers also balk at paying US$3-$4 to download a three-minute video clip on their mobile phones in some markets.


Instead, 3G handset demand would be driven by the normal upgrade cycle — about two years in more developed markets such as South Korea and Singapore — due to the lack of a compelling application, said Pyramid Research analyst Charles Moon.

GLITCHES MAR ROLL-OUTS


Growth in Japan’s NTT DoCoMo Inc G3 customers only picked up pace in the June quarter after Japan’s top mobile operator accelerated network expansion and launched new handsets with a longer battery life.


Consumers had previously shied away from the service because of limited coverage and bulky handsets with poor battery life.

Hong Kong conglomerate Hutchison Whampoa Ltd, the world’s biggest container port operator, launched its 3G services early this year in Britain and Italy — three months behind schedule — but the rollout was marred by software glitches, high price of handsets and short battery life.


Hutchison has also launched its service in Australia via its Hutchison Telecommunications (Australia) Ltd unit.

China, the world’s biggest cellphone market, has delayed a decision on 3G mobile phones until 2004 to do more tests and consider issues such as how to pay for the networks.


Malaysia’s second-largest mobile phone operator Maxis Communications Bhd, new operator Taiwan 3G Mobile Network Inc, and Southeast Asia’s largest telecoms provider Singapore Telecommunications Ltd are unsure if mobile users will embrace the technology.

All three operators plan to launch 3G services in their markets in the first quarter of 2004.


“We cannot tell for sure whether 3G will be a success… 3G is quite an unknown and it’s difficult to see what are the killer services,” Hui Weng Cheong, SingTel’s vice-president for consumer products, said this month at the launch of a free 3G trial.

Maxis Chief Executive Jamaludin Ibrahim told Reuters last week he would be cautious in launching 3G services, as initial subscriber demand would be slow.


Clinton Chiu, vice-president for business development at Taiwan 3G Mobile Network, said he expected 3G demand to pick up only in 2005 or 2006 when handset glitches are resolved and prices ease to below US$350 per phone.

“Customers do not care if it’s 2G or 3G — they only care about the pricing, the quality of the services and the types of applications available,” Chiu told Reuters on the sidelines of an Asian telecoms conference last week.


“There’s no single killer application, but operators need to bundle many services together to generate revenue.”

© Reuters

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