IP: Suicidal GPRS pricing puts 3G at risk

[David Farber <dave () farber net>]

> http://www.theregister.co.uk/content/5/20709.html
> Suicidal GPRS pricing puts 3G at risk
> By Andrew Orlowski, TheRegister  Posted: 27/07/2001 at 15:19 GMT
>
> GPRS is a flop so far, and astronomical pricing models introduced for
> such 2.5G services are putting the 3G adventure at risk. That's what
> analysts Yankee Group conclude after a new study of the European GPRS
> tariffs.
>
> Telcos pricing models vary widely, as the report, entitled "Mobile Data
> Pricing: Will European Consumers Pay a Packet," shows in some detail.
> But the costs using the first round of per-packet pricing can go as high
> as $4,600 for a 100 MB of data a month from some carriers. Compared to
> fixed rate data access or ADSL, that's a premium of 73 per cent at low
> usage levels or 1000 per cent at 100Mb.
>
> The European average works out at $214 per 100Mb per month, which for
> some folk is a day's worth of SirCam attachments.
>
> Yankee Group warns of "potentially dire consequences for future data
> services" if flat-rate pricing isn't introduced.
>
> "We've always maintained data is the icing on the cake," author Farid
> Yunus told us.
>
> His report warns that the viability of the 3G project is in doubt unless
> tariffs are reduced, and recommends networks should consider GPRS as a
> loss leader until consumer critical mass has been achieved.
>
> A couple of interesting statistics leap out of the report, too. Yunus
> reckons the cost of transport is only 8 cents per MB, so GPRS and 3G can
> be priced at less than $2.00 per MB (enough for seven average-sized
> SirCam attachments) for the networks to see their investment recouped
> and profit handsomely.
>
> Actually some of Vodaphone's business tariffs (40, 100 and Volume)
> squeak in under this, so it's clearly possible. Yankee estimates that
> $157 billion has been invested in 3G infrastructure in Europe. ®
> --
> Robert J. Berger
> UltraDevices, Inc.
> 257 Castro Street, Suite 223 Mt. View CA. 94041
> Voice: 408-882-4755 Fax: 408-490-2868
> Email: rberger () ultradevices com  http://www.ultradevices.com



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