The driving forces behind third generation mobile networks are coy about their application in the commercial area. All admit the initial aim is to sign residential users. They believe the commercial applications will follow for the delivery of multimedia services over a mobile network.
"Our experience in Japan is the take-up for 3G services is very quick," says NEC Australia spokesperson Sandy Watson. "We expect the same will happen here - now that Hutchison has launched its '3' brand 3G service in Australia."
NEC has a team of 140 people working in its R&D facility in Melbourne - many of them involved in 3G technology. They have been working with Hutchison developing applications, customising NEC's e606 handset for Hutchison's network, and developing text-input applications and email applications for the next generation of handsets.
One of the major applications over 3G networks in Japan is horoscope readings. NEC is quick to dismiss this application as having a strong relevance in the Australian market. "We are more likely to see applications that involve sport," Watson says.
In the commercial area, NEC sees the major applications coming from the real estate industry followed by retail and medical sectors. For now, the company is keen just to stress 3G services are aimed at delivering mobile information, communications and entertainment.
Hutchison says while its 3 service is aimed at the consumer market, commercial applications will certainly follow. It plans to launch a commercial service later this year. Hutchison spokesperson Julia Everingham said the company had identified email services as being a strong contender for commercial users - especially where a company has a mobile workforce.
"Being able to receive and respond to email while on the road is a big benefit for some users," Everingham says. "It means that when they get back to the office they are not faced with a backlog of emails that need to be dealt with."
"I think the success for 3G lies in the consumer market," says Paul Budde of Budde Communications, a telecommunications market analyst. "Most current predictions see the take-up for commercial applications as being only between one and three per cent of the total."
He says before communications managers start to be swamped by calls from people in their organisation to bet its mobile future on 3G, they need to prepare some tough questions. Heading this list is the need to establish a business case for moving their mobile services to 3G.
"Communications managers need to ask, 'Where is the business case?' It needs to be application-driven - not technology-driven," Budde says.
"For example, if you take the mobile data market - that's been around in Australia for about 15 years and has between 30,000 and 50,000 users. It's highly unlikely they will want to change to another standard," he adds.
There is another disadvantage to 3G technology. It is currently only available to 3 (the network, not the number of users) customers in Melbourne and Sydney locally and the UK and Italy internationally. It will progressively expand to Brisbane, Adelaide and Perth in Australia, and overseas to Hong Kong and Sweden in the coming months.
This did not prevent Adelaide-based Anglicare SA from looking into 3G when it planned its future communications strategy. "We certainly looked at 3G although there is only one small limited service in Adelaide at the moment," says Daryl Eckerman, IT Manager for Anglicare SA.
Anglicare SA is the major welfare arm of the Anglican Church in South Australia. It opted for a VoIP network based on 3Com's NBX system for its 11 offices spread across the Adelaide metropolitan area. The new network will cut the number of leased lines at the welfare agency from 250 to 70.
"The big advantage VoIP has is that the network belongs to you," Eckerman notes. "We can carry voice and data over the network and expand to video in the future.
"The disadvantage for any 3G application is you are carrying your traffic over a carrier's network and that's going to cost you money - even for a call from one desk to another."
John McGee, the Manager for Communications and Information Infrastructure Services at Canberra's Australian National University, also looked at mobile 3G when planning its future network.
"It didn't really suit us," he says. "We needed gigabit services across the network." ANU is installing a VoIP network across 130 buildings at its Canberra campus and three remote sites. The Avaya-based network will have 15,000 endpoints. "We're still keeping an eye on mobile 3G because the technology is moving ahead and all the major carriers are on the move in this market," McGee says.
With mainstream users finding little use for mobile 3G, Lee Dalton, Vice President for Wireless Networks at LogicaCMG, says it is up to organisations to exploit the business-to-person aspects of 3G.
LogicaCMG worked with Hutchison to develop the tele-messaging features for the 3 service. LogicaCMG also works with the other major mobile network carriers.
"Any company that needs to deliver information content to individuals should be looking at the richness 3G mobile offers," Dalton says. "It's a new medium that gives people more lifestyle choices."
At Hutchison, Peter Burr, Marketing Manager for Consumer and Micro-Business, says the company is working with several application developers. "The mobile phone is a personal device," he says. He sees 3G services as being able to operate almost like a mobile yellow pages but with multimedia content.
One of the major issues for all mobile network operators is ARPU (average revenue per user). Profit margins on voice calls are being squeezed as mobile phones become a commodity item. According to Paul Budde, carriers need to hook users into new features with higher billing rates.
Hutchison has pitched prices for voice calls at competitive levels for its 3 service. Its pricing plan for 3 includes usage caps and incentives. The company says these make it cheaper to use than some fixed line and many mobile phone and data services now available. There is no minimum monthly usage commitment required.
Customers will pay 50 cents per 30 seconds to make a mobile video call within Australia and just 85 cents per 30 seconds to the UK and Italy - the two other nations where 3 is available.
Hutchison says voice calls cost 15 cents for 30 seconds with a maximum charge of $99 per month after which calls are free, up to 1000 minutes of usage.
"I think Hutchison is establishing itself as a 3G player today and looking to the long term for the service to take off," Budde says. "But to spend $3 billion on a network and then have to offer discounts on voice services is a huge gamble."
NEC is upbeat about the take-up of multimedia services over 3G wireless. "By 2004, we anticipate that a majority of all new mobile phone connections will be using 3G services," the company said at the launch of Hutchison's 3 service.
NEC also believes its experience with 3G mobile technologies, integrated cameras and advanced functionality in Europe and Japan will be crucial to its re-emergence in the mobile phone market in Australia.
"There are so many options for mobile services," says Budde. "But in the end you have to have a solid business case for moving into any one of them."
