3G will create new business models | Bangkok Post: tech

MOBILE OPERATORS

With the arrival of 3G in Thailand, mobile operators will need new business models and compete on more than just price. In many countries, vendors such as Amazon, HP and Nokia have bypassed the operator directly and become a MVNO, creating a relationship between themselves and the consumer, bypassing the network operator. Quite how the market will adjust will be seen soon as the pieces fall into place.

Speaking to journalists in Bangkok in the run-up to Thailand's long-awaited 3G auction, John Stefanac, Vice-President of Qualcomm and President of Southeast Asia, shared his thoughts on the evolution of the mobile phone up to now and his vision of the future.

Today the mobile device is the biggest platform in the world. There are five billion phones and only six billion people. Of these, one billion phones out there are 3G, a number that will increase to 2.8 billion in the next three years.

In contrast, WiMAX has only 2.9 million subscribers. Put another way, every two days there are more people going on to 3G than there are on WiMAX in total. This means that it is important for regulators to allocate spectrum to technologies that are utilised.

This year is an inflexion point. For the first time, more 3G devices have been sold than 2G, not just globally but also in Southeast Asia.

Meanwhile, the growth of data continues. By 2014, the average subscriber will consume more data in one month than they did all year in 2008. Last year, Vodafone saw a 32 percent growth in data revenue, Telefonica 50 percent and China Unicom 23 percent. By 2015, 99 percent of a mobile operator's revenue will be from data leaving only 1 percent for voice.

Telstra in Australia has launched the world's first commercial Dual-Channel HSPA+ network offering up to 42MBPS

The iPhone was significant in that it changed the way people use and consume mobile data. It was easy to use and people used it.

Then there is cloud computing, the best example of which is Facebook. Everyone is on Facebook, uploading pictures.

But the real change is from the next generation of devices which are not phones. First we have seen laptops, then cars and even cameras. Amazon's Kindle is a prime example.

Everyone missed the point when Amazon introduced the Kindle to the market. It was not just another e-reader to replace physical books, but it was a whole new business model. A Kindle user sees the battery level, signal level, and title, but nowhere does it show which network it is connected to. Downloading a book from Amazon just works.

Kindle is a relationship between the consumer and Amazon. Mobile operators are bypassed in terms of the relationship with the customer. Elsewhere, HP has also become an MVNO and offering notebooks with embedded 3G.

Operators and users will have to adjust. Quite how an operator will bill someone who has phones, e-reader, car, refrigerator, SLR camera and TV connected to the 3G network has yet to be figured out and this will have to be addressed in the not too distant future.

A particularly interesting role of 3G is in healthcare. Body sensors can keep hospitals informed of vital signs and even if someone has fallen over in real-time. Smart pills exist that emit a signal when dissolved in the body, meaning that doctors will immediately know if someone has not taken their medication.

In Australia, there was news of two men shot and killed in the street by a mental patient who had not taken his medicine. Technology could make sure that such incidents no longer happen.

The challenge for telcos in 3G will be how to differentiate themselves and provide value. With 2G, there is only voice and basic data, leaving the operators to compete only on price. With 3G, it is possible to compete on services.

The battleground between Apple, RIM BlackBerry, Windows Mobile and Android is interesting in that the focal point is not the operators, but the devices. In Southeast Asia, operators tend not to get involved in device selection but perhaps they have to start looking at what role they can play in terms of offering their subscribers differentiation.

What would happen if Apple became an MVNO and established a direct link to subscribers? That is not far-fetched as Nokia in Japan has already done just that. For Thailand, for 3G, clearly the time to be is now. For the first time in a long time, there is commitment from key government officials and the NTC to make sure it happens.

There is a lot of interest in LTE. LTE will be a compliment to 3G, deployed in hotspots, not a replacement for 3G. Today the main bands of LTE are 2.5GHz, 700MHz and a lot of interest in 1800MHz. Then there are the oddball frequencies in Japan and South Korea who have always done things a little differently. For Thailand, neither 2.5 (MMDS TV) nor 700 (analogue UHF TV) are available and 1800 is used for GSM, leaving only 2.3GHz TD-LTE as an option for the country.

Qualcomm's MDM 9x00 series chipset supports 2G, 3G and LTE in both TDD and FDD variants. It will be up to manufacturers to take these chips and decide which features and frequencies to implement.

Spectrum harmonisation is important. Economies of scale mean the difference between paying $2,000 or $200 for a device. 3G has been around since 2001 but only in the last 12 months have device prices dropped below $100, so that means it will be another eight to nine years before LTE devices enter that price range.