Key to 3G Payoff: Give Customers What They Want

With the widespread rollout of 3G, consumers and business users will find that wireless devices work better and faster. For service providers, 3G also opens the door to new services that take advantage of its built-in speed.

E-mail, text messaging, Web browsing, digital photography, schedule keeping—what more can the humble wireless phone do? Plenty, once high-speed, third-generation mobile phone services hit the market in force.

With the mainstream rollout of 3G, consumers and business users will find that wireless devices can, at the most basic level, do many of the things they already could, but better and faster. 3G also opens the door to new services that take advantage of its built-in speed—up to 40 times faster than current wireless phones.

"It fundamentally changes the sorts of services that telecom providers can offer, and the ways in which customers can and will use their phones," says Alex Chin, a Hong Kong-based mobile services consultant.

Hong Kong providers rolled out a plethora of 3G services in late January, offering streaming news and real-time financial information, as well as access to TV, movie trailers, sporting events, and music videos. Games, traffic information, and other content are also available, as well as videoconferencing and video instant messaging.

According to NTT DoCoMo, its Japanese 3G mobile service customers will be able to exchange video calls with those who subscribe to compatible videoconferencing services offered in Hong Kong. And in Singapore, StarHub, SingTel, and M1 plan to launch 3G services this spring. Subscribers will be able to view movie trailers on their phone screens, play interactive online games, and hold wireless videoconferences.

Of course, some of these services are already available without access to a 3G network. In the United States, as elsewhere, Sprint customers can tune into Sprint's MobiTV service and choose from among 13 television channels—including MSNBC, Discovery, and ABC News—to view programming on their Java technology-enabled phones.

If You Build It, Will They Buy It?

It all sounds fun and futuristic, but providers wonder whether cost-conscious consumers will buy into 3G in great enough numbers to justify the cost of network upgrades. Analysts say consumers will, as long as providers keep prices reasonable and services practical—and offer attractive, affordable handsets to support the services.

"The initial launch of 3G services in Japan in 2001 was not very promising," says Chin. "The handsets were big and bulky, the batteries didn't last long, and the service wasn't reliable. It took a couple of years for 3G to really catch on. We're just starting to see some serious uptake now that the handsets are slimmer and more capable, and the service is more widely available."

Price is also an issue. An April 2003 report from The Work Foundation Society's iResearch project reported that British citizens worry about the cost of using mobile phones, and that this concern may delay the uptake of 3G mobile technology in the United Kingdom. The report also suggested that clear pricing plans and practical service offerings would be the best way to encourage consumers to buy in.

Keep it useful is good advice for providers everywhere, says Seamus McAteer, senior analyst at the Zelos Group. "Video often serves as only a technical showcase on a handset. Phone-to-phone videoconferencing is beginning to happen in Japan, but the installed base of potential peers is still low," he says. "And I do not believe that people want to watch TV on their phone in the conventional sense. But there may be a market for time-sensitive video clips or the ability to connect with video at a specific location."

Photo messaging is emerging as the next mass-market application in the mobile domain, according to McAteer. People like being able to send images instantly to their friends, and there are business applications for photo message services, too.

"Near term, I am a believer in mobile blogging—being able to capture images and post them online with associated text or audio," says McAteer. "This will have more limited appeal than photo messaging, but it could result in whole new forms of media. Mobile video capture will also be an interesting next-generation application."

Chin says anything that "amuses the young and makes life easier for the older folks is a winner."

"Mapping programs, traffic jam updates, news alerts, live streams of information that are needed now and here—that's what grownups want," Chin adds. "Kids want games. Older single kids want services that let them socialize and flirt."

Momentum Behind Java Technology Builds

Java 2 Platform, Micro Edition (J2ME platform) will increasingly power the functionality of 3G handsets. When innovative new wireless services are deployed, the J2ME platform is often the programming environment of choice. Java technology is the basis for applications on 1.5 billion devices around the world, including 250 million mobile phones.

That ecosystem feeds a strong pool of developers who are skilled in J2ME deployment. And providers who have already standardized their mobile services on Java technologies will be able to leverage their existing investments, while providing subscribers with the advanced services they demand.

A new program will make fast, reliable delivery of J2ME applications much easier. At 3GSM World Congress in France in February, Sun Microsystems and wireless industry leaders Motorola, Nokia, Siemens, and Sony Ericsson announced the Java Verified program, which provides a unified process for testing and certifying Java technology-based applications for mobile handsets. The program also allows wireless developers to distribute their applications more effectively to the growing base of Java technology-enabled handset users.

"Increased innovation in mobile services is a plus for everyone in the mobile industry," says Mala Chandra, vice president and director of client architecture and applications in Motorola's mobile communications division. "We believe industry cooperation on unified testing and certification for Java services makes great sense."

Network consultant Mike Sweeney thinks developers will agree. "For obvious reasons, programmers want to be able to write one application that can then be run on most wireless handsets," he says. "But with phones and other mobile devices, you have to deal with different form factors and features that manufacturers add to their products."

The centralized certification program promises to remove this hurdle, Sweeney says. "Java Verified could free developers to focus on innovation rather than the nuts and bolts of getting programming code to work on different devices, and speed development of interesting new services."

Zelos Group's McAteer says Java Verified is a "smart move" on the part of Sun and the wireless companies. "These vendors need to garner acceptance among carriers—which should not be a problem as this is something in everyone's interest."

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