* 3G could displace Public WLAN, offering near-ubiquitous higher-speed Internet/intranet services
* 3G capacity and cost limitations require control of usage and careful pricing
* 3G tariffs offering unlimited usage may devastate margins
* Integrated 3G/WLAN services can avoid filling 3G networks with low-margin traffic
* 3G operators must avoid common pricing across 3G and WLAN services
* Report examines 3G, Public WLAN and integrated services and identifies optimum approaches for offering Internet/intranet services
CAMBRIDGE, UK, 15 September 2004 Public WLAN has so far made the running with high-speed wireless Internet/intranet services, with 2.5G technology dogged by capacity limitations, inadequate throughputs and high costs. 3G could potentially displace Public WLAN services, by finally allowing mobile operators to offer these services on a near-ubiquitous basis. However, mobile operators should proceed with great caution according to a new report, Delivering High-speed Mobile Internet/Intranet Services: the role for 3G and public WLAN, from Analysys, the global advisers on telecoms, IT and media (http://research.analysys.com).
An increasing number of 3G operators are launching high-speed services with datacards to meet demand from business users for mobile email and Internet/intranet access. In their haste to kick-start 3G revenues, some operators are embarking on radical strategies. Some are offering ‘all you can eat’ packages or attempting to replicate WLAN pricing, while others are offering 3G services in the home, in an attempt to displace fixed (for example, xDSL) services. The report warns that such strategies may damage the economic prospects for 3G at an early stage of its development.
“While 3G offers substantial throughput, capacity and cost advantages over 2.5G technology, operators must avoid pushing 3G beyond its limits,” says report co-author Alastair Brydon. “Head-to-head competition with xDSL or PWLAN could kill profitability. Such strategies may fill 3G networks with low-margin Internet traffic, leaving no space for more profitable services, such as voice telephony, small-screen messaging and video content.”
Rather than competing with alternative services, mobile operators need to find a more profitable way of co-existing with them. “Some operators are taking an early lead in integrating PWLAN and 3G services, to achieve the best of both worlds,” says Brydon. “This may give higher 3G margins, avoid network congestion and allow mobile operators to control the emerging PWLAN hotspot market.”
The report claims that operators must exploit the unique benefits of 3G, for example offering attractively priced always-on email services on a near-ubiquitous basis, while providing the glue that connects and controls PWLAN services, perhaps notifying users of the location of the nearest hotspot if they need to make intensive downloads.
The report also highlights a number of pricing pitfalls, identified from analysis of 3G, PWLAN and integrated 3G/PWLAN services worldwide. Operators moving away from volume-based 3G charging are taking a big risk, according to report co-author Mark Heath. “Several operators are experimenting with time-based and unlimited-usage tariffs. Such schemes may be simpler for users, but they inevitably jeopardize revenue per Mbyte, and hence profitability.”
“Some mobile operators are now trying to strengthen their new integrated 3G/PWLAN offerings with common pricing across both technologies,” says Heath. “Unfortunately, common pricing can result in the worst of both worlds being uncompetitive with independent PWLAN services while generating unacceptably low revenue per Mbyte on 3G networks.”
Delivering High-speed Mobile Internet/Intranet Services: the role for 3G and public WLAN assesses 3G and WLAN services worldwide and evaluates the diverse technology and pricing approaches for high-speed wireless Internet/intranet services. The report discusses the key attributes of 3G and PWLAN and identifies optimal implementation and marketing strategies for each. Pricing models and case studies are used to illustrate the serious pitfalls that affect operators.
The report is available to purchase online at http://research.analysys.com/store/ priced at GBP1700. For more information, telephone Analysys on +44 (0) 1223 460600 or email email@example.com.
About Analysys (www.analysys.com)
Analysys provides strategy and management consultancy, information services and start-up support throughout the telecommunications, IT and media sector. Its grasp of market dynamics, coupled with creativity, rigour and renowned objectivity, enables Analysys to consistently exceed the high levels of quality and innovation that its clients expect. The company has over 130 staff in offices in Cambridge, London, Glasgow, Madrid, Milan, Paris, San Francisco and Washington DC, and works with associates in Auckland, Melbourne and Vancouver.
Recent reports include:
* 3G Launch Strategies: critical decisions on services and technology (June 2004)
* Spectrum Trading and Liberalisation: new threats and opportunities for telecoms business models (June 2004)
* The Road to Fixed—Mobile Substitution Starts with 3G (April 2004)
* Western European Mobile Forecasts and Analysis 20042009 (March 2004)
* VoIP in the US Market: services, business models and regulation (March 2004)
* Vodafone live! versus i-mode lessons and prospects for the rise of global wireless services (February 2004)
* Delivering the Broadband Home. New fixed and mobile services and devices: forecasts 2003-2008 (January 2004)
* Scenarios for the Evolution of the Wireless Industry (December 2003)
* The Future of Personal Videotelephony (November 2003)
* Operator Strategies and Key Performance Indicator Benchmarks (December 2003)
* The Role and Impact of Emerging Wireless Technologies (October 2003)
* Mobile Content and Entertainment Forecasts and Analysis (September 2003)
* Emerging Charging Architectures for New Mobile Services: understanding and evaluating the available technical solutions (August 2003)
* Extending the Broadband Opportunity: new technologies in xDSL (August 2003)
* Mobile Data Solutions for Businesses: maximising take-up and revenue (July 2003)
* Pricing Mobile Messaging, Content and Entertainment Services: a structured approach to maximising revenue (June 2003)
Media contact (for author photography, executive summaries and interviews)
Tel: +44 (0)1223 460600
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