FOOTING THE 3G BILL...
Could Bluetooth, W-LAN, SMS and Gaming Save the Day?
by Nicki Hayes, November 05, 2001
Risking bringing it to the editor's attention that she scrapes a living from stating the obvious, Nicki
Hayes, WDN's European correspondent, observes that analysts seem to make a living from stating the
obvious. Although sometimes the obvious is just too obvious to see - especially if you're a European
network operator racing to pay off some of the debts incurred by the acquisition of 3G licenses
OK. Fair cop. I'm obsessed with how the European mobile network operators are going to generate the
sort of revenues needed to fund the ludicrous amounts of cash they spent on 3G licenses, as those of you
who regularly read my news-bytes will be aware. I suppose my main concern is that 3G is going to turn
into a license to bill the consumer. So, while my immediate reaction to the recent Forrester report
predicting that Bluetooth and W-LAN will co-exist, was: "Yeah, right. Wish I could get a job for stating the
obvious," on reading on my attention was fixed.
"Bluetooth and Wireless LANS will co-exist," states the title of the report. Well, yes. One connects small
devices, such as a Walkman and speakers, to each other without wires. The other connects devices to a
network without wires. Just because they're on the same radio frequency doesn't make them competitors.
They do different things with different devices for different audiences. Do we really need an analyst to tell
us that?
"European telcos must wake up now and embrace both new technologies to defuse competitive threats,
generate more network traffic, and drive sales."
"Drive sales." Now we're talking. Even though this too may seem obvious, there can be no harm in
recognized influencers and opinion formers bringing it to the attention of those of us who may have been
too busy with our head stuck in the corporate bucket (sorry, I mean budget) to spot, can there?
I think not, and presumably the report's author Lars Godell agrees. He advises: "To protect their GPRS and
UMTS business cases, mobile operators must take part in the hotspot land grab now, before the most
attractive hotspots and most lucrative business customers have been taken by competitors like MVNOs
(mobile virtual network operators) and new WISPs (wireless ISPs)."
Lars also goes on to highlight "opportunities to defend telco revenue streams" brought by Bluetooth and
W-LAN technologies. I for one am all for telcos taking such opportunities as the obvious consequence of
them neglecting to do so is higher bills for their customers which will inevitably only serve to further stall
the wireless explosion we're all waiting for. But how so, and which offers the greater opportunity,
Bluetooth or W-LANs?
Well, according to the report, Bluetooth will outnumber W-LANs in terms of enabled devices by 10 to one.
It predicts that there will be 235 million Bluetooth-enabled mobile phones, PDAs and laptops by 2006
compared to 22 million W-LAN-enabled devices.
"With a few Nordic exceptions, European telcos haven't moved out of the trial mode with W-LAN services
and Bluetooth isn't even on their radar screens," advises Godell.
He also advises telcos not to view W-LANS as a threat to be lobbied against. Instead they should view
them as a unique opportunity to learn about data services, after all, according to this research, W-LANS
will steadily power into laptops, reaching more than 10 per cent next year and 72 per cent by 2006. "W-
LAN's strengths will make it the uncontested winner for laptops to connect to private or public networks,
and it will dominate public Internet access hotspots like hotels and airports," Godell advises.
Then, on the other hand, Bluetooth and its associated low costs, low power consumption and support for
real-time applications such as voice, will become the preferred choice for mobile phones, PDAs and
consumer gadgets. By 2006, according to the report, Bluetooth will be present in 73 per cent of phones and
44 per cent of PDAs. And, as Godell points out, the phones and consumer gadgets which will contain
Bluetooth capabilities will have shipment volumes more than a hundred times greater than laptops.
With such market potential Godell is sure to be right about the forthcoming hotspot land grab. Telcos who
are depending on some pretty heavyweight business users to drive early demand for UMTS and GPRS
would do well to heed his advice. Such organizations need to win the big customers now in order to seed
their future business plans and create some early barriers to entry for the new breeds of emerging
competitors, such as MVNOs and WISPs. And as such customers are already beginning to use W-LAN in
hotspots including airports and hotels, they can not afford to wait. For, as Godell points out "While telcos
can't stop W-LAN, they can control its pace and get part of the revenues".
Encouraged by Forrester's findings I thought I'd talk to some other industry experts currently in the thick
of things. Ray Attwood, founder of the independent wireless research and publication company
WebCentric, is currently working on a report for the Financial Times (FT). This report focuses on ways in
which the mobile industry, specifically operators and MVNOs are "partnering for profit". According to
Ray the current focus is still very much on milking the existing success of sms and gaming in Europe,
although there is a move towards partnering with content providers.
"Most of the operators and portal providers I'm talking too are focusing on short term partnering strategies
providing organizations that do not require funding with access to the network and support to test out new
products and services. Some organizations, such as Orange, are also beginning to take a more long-term
partnership approach with what they call "life services". Even so, the current focus is very much on
building on the existing success of sms, gaming and competitions, bolting these into services that the
market is ready to use now and which will continue to generate revenue for the next 12 months," advised
Attwood.
This need to generate revenues now is very real but operators should not lose sight of the big picture and in
the long term the big picture will be dominated by the big corporates with the big budgets. Partnering is the
way forward for operators, especially if they want to break into this corporate market, an area where they
typically have no relationship with decision makers other than the network manager responsible for
purchasing voice and data connectivity. Partnering with organizations that will allow them to take part of
the W-LAN market share would be a great start. As Godell summarizes:
"W-LAN presents a new entry point for telcos in enterprise accounts. By partnering with systems
integrators telcos can get contracts to build W-LANS, integrate them with corporate VPNs, and deliver
wireless voice over IP. The next step: Use the relationship to upsell high value service like storage and
email hosting …"
Enough said?
Previous NewsByte... IT'S WRONG TO WISH ON SPACE HARDWARE... Why carriers may need to look for a non GPS solution to E911
About the author:
Nicki Hayes is a freelance writer and corporate communications consultant specialising in business to business internet issues. She has contributed editorial to a number of publications including Unstrung.com, Guardian Online, Financial Times, Banking & Financial Training, eAI Journal and Secure Computing. Nicki is also the European correspondent for The Wireless Developer Network. Nicki is based in Dublin, Ireland and also has a base in Cambridge, UK. Through her consultancy, Hayes-Singh Associates, she has access to a number of technical writers and PR consultants throughout Ireland and the UK.
About the WirelessDevNet (www.wirelessdevnet.com):
The Wireless Developer Network is an on-line community for information technology
professionals interested in mobile computing and communications. Our mission is to assist
developers, strategists, and managers in bridging the gap between today's desktop and
enterprise applications and tomorrow's mobile users communicating via wireless networks.
We are interested in supporting the deployment of these evolving technologies through
high-quality technical information, news, industry coverage, and commentary. This
information is provided within a true on-line community that supports developer/vendor
dialogue through message boards and user-submitted tips, articles, links, and software
downloads.
|
