3G: It Still Does Nothing

Nokia says enterprise doesn't care for 3G. That could become a self-fufilling prophecy...

After years of disappointment, just when the flame of optimism was flickering, it's been blown out and darkness reigns. As they stare at more years of despair and disappointment, 3G operators must know what it's like to be a Democrat.

The blow came from a supposed friend -- Nokia. It revealed this week that the enterprises it talks to just aren't interested in 3G. Instead, they find GPRS works fine on the road, and prefer Wi-Fi in the office and at hot spots.

This comes at a time when the 3G market finally looked to be in better shape, with four different laptop data cards now on sale in the UK. If Nokia is right -- and this is a firm whose whole future depends on it -- then the 3G market could be facing a sticky fate.

In fact, 3G is looking like this decade's version to ISDN -- which for the benefit of younger readers was a 128Kbps data service launched in the 1980s. Astonishingly fast for its time, ISDN failed to become a mass-market proposition because its appeal just wasn't compelling enough. It cost too much, it was atrociously marketed, hard to make work and beset by industry -- read BT -- politics.

People who just wanted to make voice calls were happy with their existing, cheaper service, consumers wanting to do personal data couldn't afford it, and companies wanting to do data were doing it point-to-point where fixed lines were a better option. Not for nothing did cynics call the service 'It Still Does Nothing'. And just as data use started to take off and the Internet got going - and the telcos renamed it 'I Smell Dollars Now' -- 56k modems and broadband swept in and stole the market. ISDN, RIP.

And so it goes with 3G today. There are alternatives that are nearly as good, yet cheaper. Where it does have a chance to shine, 3G data cards are currently much too expensive -- which stops the mass market from driving the costs down and prevents Nokia from investing too much in developing handsets to fuel further interest.

So is this vicious circle breakable? Only if the 3G industry can learn from ISDN's mistakes. It must be solidly marketed at each level of the industry, from handsets to networks to applications. Ah yes, applications. Do you know a killer app for 3G? Neither do we. Email, web browsing and remote access work kind of OK over GPRS, and enterprise doesn't give a fig for video. Think hard.

If this isn't sorted out soon then just as broadband finally put the kibosh on ISDN, WiMax will effortlessly absorb the market. 3G cannot afford to wait.

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