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IP: If you love GPRS, set it free
From: David Farber <dave () farber net>
Date: Tue, 04 Dec 2001 02:26:21 -0500
From: "Janos G." <janos451 () earthlink net> Subject: If you love GPRS, set it free Date: Mon, 3 Dec 2001 09:17:14 -0800 MIME-Version: 1.0 Give away GPRS, urges CMG William Fellows - www.the451.com CMG Wireless believes operators should be giving away GPRS network capacity to subscribers free of charge in order to stimulate the use of non-voice services and to secure the use of 3G in future. And it chooses its words carefully. "Mobile internet is the worst term you could invent," the company says. Context Users regard wireline internet content as essentially free and are going to expect the "mobile internet" to be the same, it believes. "GPRS isn't going to hot rod the use of mobile data." Instead operators need to create applications that are valuable and high bandwidth. CMG's outspoken view is based on the assumption that no-one really needs 3G. However operators have paid the license fees and they need to recoup their investments therefore they need to educate people. "GPRS is the learning curve," it insists. "No services available today need 1Mbit." Technology Indeed it seems the use of or need for 1Mbit data speeds will be primarily for visual applications. People can't read text at 1Mbit speeds, but they can see images. Moreover because subscribers who are walking or driving are not going to be using visual applications, it makes us wonder whether 3G is strictly a cellular service at all. Cellular networks are designed for maintaining connections as subscribers move. 1Mbit visual applications will mostly be used while subscribers are stationary (or are passengers on trains or in cars). "Forget about information services, interactive gaming and music downloads," says CMG, what is required to make GPRS and 3G a success are new applications, and services which exploit person-to-person messaging. It points to Hutchison 3G's appointment of a manager of adult content as one indication of how some operators are gearing up for obvious opportunities. Also key, CMG says, will be operators' willingness to share a greater amount of revenue with ISVs than is currently on the table, and follow the NTT DoCoMo iMode model. Multimedia messaging is clearly going to be a winner. SMS is well understood and used. If operators are able to encourage users to send one multimedia message with a value say three times what it costs to send a text message, the step change in revenue opportunity becomes clear. Financial impact CMG's business is of course selling the gateways and services which support messaging, and it believes there are still many opportunities to be exploited. The US market for one. By pushing its SMS gateways into the North American market, CMG Wireless is effectively trying to do there what Germany's Materna wireless group did across Europe. CMG Wireless claims 31.1% of all SMS messages sent are routed through its SMS centers compared with 27.2% for rival Logica, 20% for NTT DoCoMo's in-house system and 8.9% for Nokia. Materna pioneered the development of technology (and encouraged the business models) which enable European mobile phone subscribers to send SMS messages between different networks as a matter of course. However while CMG has signed a clutch of Canadian operators for its gateways US cellular subscribers are still unable to send SMS messages beyond their own networks. While US operators seem disinclined to promote inter-network messaging (and the US already has extensive two-way paging) there are nevertheless some compelling revenue opportunities for this activity which don't exist in Europe: US subscribers already pay to receive calls. Conclusion CMG's call for operators to provide access to GPRS networks at the same price as 2G will fall on deaf ears. Operators are desperate to begin paying back debt and offsetting ARPU decline. They're not about to give anything away. But CMG's point is a good one. Operators believe GPRS' 'always on' functionality will make it compelling, and it probably will, but not in itself. The horse must come before the cart. Comsumers do not buy technology - vis WAP. New applications and services as well as MMS will be required to demonstrate the value of these networks and generate the kind of interest that will lead a subscriber to pay more for it.
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- IP: If you love GPRS, set it free David Farber (Dec 03)