The industry needs them to make 3G work. Users want to know what they are...
With arguments over the success or failure of 3G raging against the backdrop of a ticking clock everyone wants to know how the next-generation of mobile telephony won't be the biggest business white elephant ever. Tony Hallett reports...
With many financiers, investors and even industry analysts - as recent silicon.com reports have shown (http://www.silicon.com/a55147
) - doubting the long-term profitability of third-generation mobile networks, it isn't surprising those with a stake in 3G's success have come out fighting.
Nearly all network operators, equipment suppliers and content companies, as well as many other industry analysts, claim users are warming to advanced mobile data services and handsets will be ready in time, as long as 'in time' means sometime next year.
But the last two years have seen a change of heart. The idea that delayed roll outs are either the fault of equipment companies or carriers (see: http://www.silicon.com/a43554
) seems to have subsided.
What's more, most network operators seem to have now come around to not having to own each customer. Including innovative third-party content companies in the value chain rather than keeping them at a distance - and struggling - is a welcome change. (See: http://www.silicon.com/a46174
for a turning point a year ago.)
Instead, the industry is trying to pull together. Bob Schukai, 3G programme director at Motorola, captures the broad feeling. "3G is not a blame game but about industry survival and we're all in it together. The last thing we need is another failed technology launch," he said.
Of course such statements offer no guarantee leading mobile telecoms companies won't go the way of many well-funded dot-coms, equipment makers or alternative fixed line carriers. So what are the likely options for the industry?
The obvious answer is that collectively companies come up with mobile services other than voice which users want. Sounds simple but no one has yet found an answer.
Everyone wants voice services and many will be carried over 3G but users are accustomed to low costs. SMS is popular but almost took off by accident. Its successor, MMS, is ramping up in some markets - for example T-Mobile has sold 20,000 MMS handsets in Germany since 1 July - but is no killer app, as much as we'd all love a camera phone.
MP3 is popular with many but as Simon Buckingham, CEO of consultancy Mobile Streams, said: "Carriers are generally not interested in supporting or subsidising MP3 and radio features because they do not generate traffic."
Polyphonic ring tones, colour screens and Java apps including games will all matter but none are indispensable or even 3G-only.
Operators will all have their own ideas - and a Hutchison paying millions for content such as top flight football certainly shows some have bet heavily in this area - but the bottom line is none are yet sure what will fly. They just hope something will.
Pan-European operator Orange pointed out few services are likely to be marketed as '3G', a phrase which means nothing to most people. That's probably right but enough GPRS services have been advertised using the phrase GPRS to make even the most ardent optimist wince. And look what's happened with that so-called 2.5G technology.
As operators get their heads around which services work it is likely they will keep on lobbying the governments who issued licences for the spectrum 3G uses - by beauty contest or expensive auction - for better terms.
Dave Murashige, VP Wireless Internet Strategic Marketing at Nortel Networks, pointed out Italy has already expanded licence terms from 15 to 20 years.
Meanwhile, however, Norway has been reluctant to back down from its hard line position, whereas neighbour Sweden has entertained network infrastructure sharing. "This suggests roll out will be faster," Motorola's Schukai said.
Several other equipment giants expect this kind of mellowing, although many think government refunds unlikely. A Lucent spokesman said: "It is in the interests of both governments and regulators to see this technology succeed, in their own countries and in Europe as a whole. Undoubtedly there will be further accommodations, most likely operator-specific."
Certainly the pressure is mounting on administrations every day.
However, this is to take a very European view. There are some who have pointed to the success of 3G in other parts of the world, for example in Japan, South Korea and even the US, long thought to be a mobile telephony laggard.
San Diego-based Qualcomm is a pioneer of the CDMA mobile standard which has competed with GSM for a decade or so, and which forms the basis for most 3G types. Jeff Belk, Qualcomm senior VP marketing, earlier this week said: "To date, there are over 14 million subscribers on 17 commercial networks in seven different countries, the majority of which are using CDMA2000 1X technology" - provided by his company.
Yet this seemingly good news brings us to the third and perhaps most contentious way of trying to exit the 3G mire - definitions.
Nick Greenway, the Datamonitor analyst who sparked off much of the recent debate with his 'Death bell tolls - 3G RIP?' note, said: "[Belk] is incorrect. CDMA 1XRTT is not a 3G technology but a 2.5G technology. It was originally considered by some to be a stepping-stone technology to CDMA 3XRTT, the true 3G variant."
There are many operators right now with 2.5G network layers up and running using GPRS or another technology called HSCSD, or some about to move to a pre-3G technology called EDGE, who may just be tempted to write-off 3G investments. There are several 'ifs' to follow such a statement - if 3G continues to prove problematic, if these inbetween technologies prove 'good enough' and if, most importantly, there is no major loss of face.
Ultimately, we are likely to see lots of talk about 'next-generation services'. If they satisfy return on investment criteria it won't be so important which mix of protocols they are based on. But don't count on the 3G success/failure arguments ever stopping.