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> 3G future to be decided in 2004: IDC
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although this is an article for the Australian market, i suspect that the issues will be much the same worldwide.
from
ZDNet Australia
Aust 3G future to be decided in 2004: IDC
By James Pearce, ZDNet Australia
19 January 2004
After a lacklustre beginning to the 3G mobile market in Australia, 2004 will be a "watershed year" in determining whether a nationwide service will exist in 2005, according to IDC analyst Warren Chaisatien.
Despite spectrum for the 3G networks being auctioned off in 2001, all of the established carriers have deferred launching their 3G network until 2005, with only newcomer Hutchison launching its 3G network '3' in Australia's major cities in 2003.
"2004 looks set to become a watershed year for Australian 3G players as it will determine whether a highly anticipated nationwide market of 2005 will become a reality," said Chaisatien.
Chaisatien told ZDNet Australia he wasn't certain the Australian market could sustain each carrier running its own 3G network – a claim that is often made of the mobile phone market in general –- but so far each carrier has indicated they will be going it alone, at least initially. This was not always by choice, with Vodafone announcing its decision last year after failing to find a suitable partner.
However, Chaisatien is reasonably confident that some carriers will partner to build a 3G network over the next few years, pointing out that Vodafone was trying to keep options open for a partnership as it built its network in case another carrier became interested. He said the most likely partnership would be between Vodafone and Telstra.
"TelstraClear and Vodafone in New Zealand are already talking," said Chaisatien. "If that happens they could create a trans-Tasman network, which would make sense."
"Vodafone in New Zealand and Australia are trying to sync their developments, including 3G," said Chaisatien. "The vendor Vodafone picks to build the network in Australia will also build the New Zealand network."
Chaisatien estimated Hutchison had 85,000 customers signed on to its 3 network at the end of 2003, which was "obviously below previous expectations". He estimated that Hutchison was adding around 1,500 customers per week in the last three months of the year, compared to 2-3,000 per week for the previous two quarters. However, the numbers would increase to 300,000 (two percent of the mobile market) by the end of 2004, Chaisatien predicted.
"I don't know what [Hutchison's] prior targets were, but definitely higher than [85,000]," said Chaisatien. "In the first nine months they have not achieved the critical mass of subscribers that Hutchison was looking for." The main problems had been a lack of 3G handsets and issues with the reliability of the network, said Chaisatien.
Peter Burr, general manager of consumer and micro business marketing for Hutchison told ZDNet Australia Hutchison's annual results for 2003 would be released in February, and he was unable to comment on the matter. He also said that Hutchison were keen for other carriers to enter the market, and said "competition is a good thing".
"As people become more confident with the category, as more people start to use the capabilities of 3G, as more carriers provide 3G, as a greater number of people become educated and touched by it the faster the migration to 3G will be," said Burr. He said the more 3G services that were offered the faster the market as a whole would grow.
Burr said there would be a range of new handsets arriving in 2004, both from current suppliers Motorola and NEC and some new suppliers.
Chaisatien agreed that more players were needed in the 3G marketplace. He said Hutchison had the ability to run the business for 2004 and into 2005, based on the global strategy and financial backing of its parent company, Hutchison Whampoa.
"Out of 2005 if the remaining players are not doing anything they'll be on shaky ground," said Chaisatien, but added "by 2005 you have to expect some form of market entry by the remaining three players."
According to Chaisatien, the drivers for fast 3G uptake are already around, but the market is being held back by several factors which would have to be overcome for the technology to take off.
Technology challenges Hutchison's 3 network has experienced problems with call quality and call reliability, and has come under fire from the Australian Computer Society. People now have high expectations of mobile phones, and have forgotten the problems experienced by GSM networks when they were first introduced.
Handset shortages Hutchison has been perennially short of handsets since the service launched, and will need to liaise closely with its suppliers to ramp up production in 2004 for the market to grow.
Improved handset design The design of the handsets will have to continue to evolve, with the devices needing a reduction in both size and price. As the manufacturers begin production on the second-generation of 3G handsets these improvements should become evident.
Carrier cooperation Chaisatien said that a lack of cooperation between carriers was hindering the market, and a partnership between two or more carriers would speed adoption.
"If one of these factors [improves] in 2004 it could have a very positive impact on 3G take-up," said Chaisatien.
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Gee, does that beat me? I only got two pair - two aces, and another two.
[ This Message was edited by: gelfen on 2004-01-19 06:28 ]
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Posted: 2004-01-19 07:25:30
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In Portugal the deadline is a bit earlier.
By 1st June 2004 all carriers (3 of them in this case) must have 3G commercially available.
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Posted: 2004-01-19 11:50:30
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