Three years ago mobile operators paid billions of pounds for third-generation (3G) mobile phone licences on the back of an inflated stock market, only to find that the costs of introducing the new networks were prohibitive and consumers were either under-whelmed, confused or simply disinterested in such extras, especially by the useless “WAP”.
Three years on, 3G services have been slow to get started, handsets have been slow to appear and the services, like video, untried among ordinary users. Now critics point out that, by the time 3G arrives, the technology will be ready to be replaced by, yes, “4G”.
But for the moment, in the wintery Cannes sunshine, more than 4,000 delegates from the mobile world met to talk about what lies ahead for the mobile industry. With the 3G auctions now a relatively distant nightmare and an economic downturn in the technology sector generally bottoming out, the talk on the Cannes Croissette was not so much critical of the mobile providers as of how to court them.
Pre-conference seminars were packed and two words cropped up frequently: open standards. The trouble is, which so-called “standard” do you pick?
As usual, everyone thinks they have the standard. Nokia, Microsoft and OpenWave are all jostling to have their software and platforms become the market leader, reaping them licensing contracts to die for. Nokia in particular has been pushing its P60 operating system for mobiles, alongside its partner Symbian, the original maker of the Psion portable computer, which quietly faded and re-emerged as a mobile system.
At the conference, Microsoft presented a new version of is Windows-based SmartPhone software, attempting a live demonstration from the conference platform of an Orange SPV SmartPhone. Ordinarily this would be an ill-advised move but researchers say punters need to have these more complex phones demonstrated in-store to a tech-sceptical public if the operators have any hope of selling them.
It’s at this personal digital assistant end of the market that Microsoft has an advantage.
But when it comes to consumer- friendly mobile phones, Nokia is the one to beat. It announced four other handset makers were taking its P60 mobile platform, making it easier for developers to create applications that will run on several makes of mobile phones.
On the downside, iMode, the mobile internet service that took Japan by storm at the turn of the new century, appears to have proved a flop in Europe.
The only operator offering it so far is the Dutch-based KPN mobile, which admitted to a measly 200,000 subscribers.
But amid all the announcements, press releases and parties, the mobile telecoms industry faces something of a crisis. As much as operators think they can get third-generation phones to work and as much as they think the average mobile user does want to send a video message, the reality contradicts the theory.
Wireless analyst EMC came out with the news that less than 0.01 per cent of mobile users in Europe are accessing services via 3G networks. This is perhaps understandable, since hardly any 3G networks have started but, more worryingly, less than 1 per cent use GPRS, the “2.5G” standard that was supposed to act as the stepping stone to full-blown 3G.
This lack of take-up for GPRS has prompted analysts such as the Shosteck Group to postulate that operators may now stop pushing GPRS and move straight on to implementing 3G in a race to squeeze profits out of their licences before it is too late. Indeed, Sony Ericsson introduced its new 3G smartphone and, along with Nokia, the impression is now that other technologies will start to take a back seat to 3G. But the question now is, if so few consumers want extra data services on 2.5G, what chance does the multi-media capabilities of 3G have?
The Multi Media Messaging Services (MMS) on 2.5G/GPRS that began late last year have proved equally uninspiring. By the end of last year, Orange and Vodafone combined had sold just 150,000 MMS handsets in the UK.
The message to operators seems to be that consumers are largely happy with mobile calls and good old reliable text messaging. Multi-media capabilities, at least so far, are “nice-to-haves” rather than “must-haves”. Even sexier video messaging could prove to be just an expensive way to brag to your mates. When the UK’s new “3” operator – owned by Hutchison – announced its services this year, most commentators were aghast to hear the service could cost up to