WiFi To The Rescue Of 3G

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The number of mobile phones with Internet connectivity will soon exceed that of PCs. As a result the mobile communications industry is gearing itself up to become the mainstream distribution platform for the entertainment world. Outside of Japan and a few Asian countries, the 3G market appears to be suffering a ‘Catch 22′ situation. Few users are venturing on-line with their mobile devices due to lack of content, and few content providers are investing in the mobile market because of poor user adoption. Is the mobile communications industry barking up the wrong tree?

“Perhaps the mobile communications industry should encourage the development of hybrid 3G/WiFi phones and promote wireless hotspots to bring about a 3G revolution”


Following is comment from Richard Edwards, Senior Research Analyst, Butler Group:

It is estimated that mobile telecommunication companies have spent in excess of US$200 billion on 3G licences and network infrastructure. Yet at the end of 2005, according to a recent article published by International Herald Tribune, only 2% of the two billion mobile phone users around the world currently subscribe to 3G services (even though 9% of mobile phones sold in 2005 were 3G handsets).

A number of anecdotal reports suggest 3G subscribers are not overly enamoured with the new technology: bulky phones, patchy coverage, and complicated tariffs are frequently cited as the primary turn-offs. Other than for example the BBC, the US-centric Yahoo, and a handful of WAP sites, few mainstream Web destinations appear to be doing anything to accommodate the regular PDA or mobile phone user. However, these objections would likely fade into the background if more Web sites catered for these small mobile screens which would go a long way towards improving and enhancing on-line user experiences via such mobile devices.

Odd as it might seem, WiFi technology could well kick-start the floundering 3G market. Based upon the presumption that users of wireless hotspots (including the growing movement of so-called ‘community’ wireless hotspots such as FON), will become addicted to the broadband speeds and the untethered access afforded by this technology, and so will then be much more amenable to the idea of a combined WiFi/3G tariff from their mobile phone service network provider.

Of course the price must be right (flat rate pricing where the user pays a set fee every month for as much data as they want) and Web site owners must also re-engineer their sites to accommodate small form factor devices, for example Flash mobile technology that Adobe recently acquired when it bought Macromedia. Given our love-affair with broadband and the mobile phone the opportunity is still there.

So, perhaps the mobile communications industry should encourage the development of hybrid 3G/WiFi phones and promote wireless hotspots to bring about a 3G revolution? It is a risky strategy for sure, but nothing they have done to date appears to have worked, and the money will undoubtedly run-out sooner or later.