3G pits networks against phone makers

Vodafone, one of the world's biggest wireless network operators, has called for handset makers to rein in their competitive instincts to make it easier to bring next-generation wireless services to consumers.

In a talk at this week's Next Generation Mobile Handsets conference in London, Omnitel Vodafone customer interface manager Csaba Tarnai argued that consumers stand to lose out from the emphasis of phone makers such as Ericsson, Nokia and Siemens on differentiating themselves from the competition. The lack of coordination between phone manufacturers and network operators has led to customer confusion and made it next to impossible to roll out new technologies, he said. Omnitel Vodafone is the service name of Vodafone in Italy.

Tarnai also dismissed "open" operating systems like Symbian OS and Windows Powered Smartphone 2002, which he said will remain a "niche" for the forseeable future. Handset makers and Microsoft have been putting increasing emphasis on Symbian or Smartphone 2002-based phones as the linchpin of their plans for next-generation technologies.

Tarnai's remarks made it clear how different the world looks from the point of view of network operators and handset manufacturers, both of whom have their own strategies for bringing technology like GPRS and wireless Web services to the mass market. The collaboration, or lack of it, between handset makers and network operators is a growing concern as 3G services come closer to reality, say industry observers.

Tarnai said that while network operators are struggling to push out advanced services, such as online portals via WAP and high-speed GPRS access, but they don't have any direct access to their customers except via technical support. "The handset is our main interface with the consumer, but it is not optimised for the operator," he said.

The situation is complicated by the multiplicity of networks across Europe, which means that services must be able to roam from one network to another, and dropping handset subsidies, which mean that network operators often do not have any say in which handsets the users buy. In Italy, handset subsidies have been dropped entirely, making it difficult to sell high-end, feature-rich handsets.

Vodafone called for phone manufacturers to give network operators a bigger presence on the handset by creating a customised menu on each phone, with one-button access, that would give easy access to the operator's value-added services. Ideally the network operator should have its brand imprinted on the handset hardware, and be able to program the phone with branding messages, he said.

Open operating systems like Symbian OS and Smartphone 2002 are attempting to standardise phone software to some degree, but Vodafone does not see them as mass-market products, Tarnai said. "Open platforms will remain a niche market," he said. "They continue to be very expensive. They will mostly be sold to the professional market." He said that Europe should look to Japan, where handsets are much more standardised, and to the PC industry as examples. "In the PC market, there is plenty of differentiation with PC makers, even though they all run the same operating system," Tarnai said.

The GSM Association, which is concerned with coordinating standards for GSM phones, and is promoting an "m-services" specification, admits that competition between handset makers has led to an uneven approach to bringing in new technologies, and has led to some disasters, such as the introduction of WAP 1.0.

"Some of the operators and vendors are always going to go forward with technology to differentiate themselves, and the market reacts to that," said Marcus Taylor, technology director of the GSM Association technology group. "Some will lead, and others will follow. Once that begins, we recognise what the issues are and take steps to bring some coherence to what's going on.

"There will always be some discontinuities and disconnects," Taylor said.

Some in the industry have speculated that with the recent round of consolidation amongst European network operators, the operators may now be powerful enough to dictate how handsets are made. "Are we getting to the point where the operators are big enough to commission their own handsets?" said Nick Hunn, research and development director with TDK Systems, who chaired the conference.

However, Vodafone emphasised that it has no intention of following the Japanese model and controlling handset design, saying that handset makers seem to be willing to collaborate to some extent to make common technology work properly. "They understand that differentiating doesn't mean reinventing the wheel each time," Tarnai said.

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