IP: If you love GPRS, set it free

[David Farber <dave () farber net>]

> > 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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