Person-to-person services to drive 3G growth

A new report finds that there may be more consumer demand for high-tech services such as video calls than had previously been thought

A new report has disregarded the recent gloom-and-doom reports about 3G; it has found that consumers are likely to respond to the technology and predicts 3G will reach 50 percent of European mobile users by 2007.

Monday's report from The Thinking Box, a new London-based consultancy focussed on consumer projects, predicts that 3G will be helped to success by consumers' insatiable appetite for applications that allow them to communicate with one another. This will drive early 3G expansion through peer-to-peer applications such as video calls and multimedia messaging (MMS), the report said: "Applications based on self-generated content will meet instant success".

Text messaging will disappear to be replaced by Mobile Instant Messaging (MIM), offering a mobile version of the popular PC-based instant messaging services. Video calls will also be important, the firm said. "The interviewees were truly amazed by the possibility of 'video call': they couldn't believe that this spectacular innovation would be available in the next few months in their country," it said.

Thinking Box downplayed the notion that applications such as Web browsing and m-commerce would be a central driver for 3G, although these would add "a crucial extra 15 percent... to mobile operators' turnover" by 2007.

The firm predicted that in five years average revenue per user (ARPU) will have increased by 50 percent, with voice still the largest share of income, at 62 percent.

A major force in rolling out 3G will be the operators such as Hutchison who do not have standard GSM licences, and rely on the new technology for all their revenues, Thinking Box said: "Like it or not, competitors will be obliged to follow ­-- and may even be forced to adjust their strategies".

The firm found that the services offered by 2.5G -- a term for stopgap data-based networks such as GPRS -- are likely to be 3G's biggest threat. This threat will only grow as operators delay their 3G rollouts and GPRS becomes more entrenched.

Thinking Box reached its conclusions by carrying out in-depth research with a small group of 100 representative Europeans.

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