Editor’s note: This is the last of a five-part series looking at 3G networks.When it comes to wireless services, big matters. So it should come as no surprise that the major networks are driving the creation of advanced multimedia networks. And they are counting on business users to make 3G efforts pay off.
Sprint PCS, Verizon Wireless, Cingular Wireless, AT&T Wireless, Nextel Communications and VoiceStream account for more than 100 million of the 130 million U.S. wireless subscribers, according to information published by The Yankee Group. And these companies know which of their customers want 3G — and why.
A study released by Taylor Nelson Sofres Global Information Technology Practice, an analyst firm, finds that consumers 25 years old or younger and those that earn a high income are the most likely candidates to jump on the 3G bandwagon. For instance, the study shows that 45 percent of U.S. wireless users under 25 indicate they feel a strong interest in using 3G services and applications compared to 67 percent throughout Europe.
Another study by A.T. Kearney finds that 40 percent of mobile phone users wish they could use their handsets for small cash transactions.
“Any company that wants to maximize the impact of 3G must rigorously follow a market-focused, consumer-centric approach,” says Chandra Chaterji, senior vice president of Taylor Nelson Sofres. “The key question should be how can we leverage our brand to market a bundle of products or services employing mobile networks?”
So it would seem that all of the pieces are in place to put 3G together and rollout these new networks and services to consumers.
But Bill Weiss, chief executive officer of the Promar Group, has a slightly different take on where the wireless sector is headed.
“I think the consumer thing is going to be more of a fad, which is part of Sprint PCS’ upcoming rollout,” he says. “If I was providing 5,000 folks out there with high-speed wireless data connections, I’d be wondering what they are going to be doing with that connection that makes their company be able to save money and make money. That’s the equation that’s going to work with 3G technologies, and if it doesn’t work then I don’t think we don’t need 3G.”
Speed will matter
John Brewer, a principal with Monarch Partners, a Cary-based venture capital firm, formerly worked with American Tower Corporation and says he sold the first build-to-suit tower deal in the U.S. Brewer says he still thinks there is too much speculation about what could or should happen in the 3G arena and not enough tangible evidence that the general public is even interested in such services, or that 3G will run as fast as the wireless industry claims.
Original 3G estimates predicted wireless data users would connect at speeds up to 144 kbps but Brewer says those speed really are closer to 40 to 80 kbps.
“How compelling is having high-speed data available everywhere going to be?” Brewer asks. “I’ve come to the conclusion that wireless data is really going to be about extending data to every person within an organization from the corporate network but in order to be valuable 3G needs to change the workflow of a business. I think the one killer application for 3G is going to be e-mail.”
A study by Access Markets International Partners, Inc. backs up the assertions made by Weiss and Brewer that the needs of mobile workers are going to drive demand for 3G services. It predicts that the wireless data industry will increase from 3.7 million users in 2001 to more than 26 million in 2006. The study also finds that small and medium sized businesses will drive the market, increasing the number of users from 2.5 million in 2001 to 16.3 million in 2006.
“The wireless data Internet industry is now well poised for a sustainable high growth, says Scott Drobner, the AMI analyst who published the study. “Unfortunately, until now a ready and willing market has been stymied by unclear value propositions and uncertainties surrounding devices, services and applications.”
And yet another study, this one published by Cahners In-Stat, finds that 60 percent of the U.S. workforce will have access to a 3G wireless device by 2004 with companies employing fewer than 100 workers accounting for the largest user group.
The future may appear familiar
No doubt about it the wireless communications industry is still suffering through a hangover following the spending party of the late 1990s and it may be some time before the foggy perspective clears. But the fact of the matter is, many analysts believe that the sector eventually will shake off its lumps and boom again.
Some observers say the widespread use of 3G remains five years off. Others predict it will be closer to three years and the service providers claim the time is now and that 3G is poised to change the habits of billions of people around the globe.
No matter how you divvy up the bandwidth there is little doubt that consumers and employees will one day own and operate devices that allow them to make phone calls, check e-mail and watch streaming video over a handheld device.