Operators in Asia learn from mistakes

location based services

SINGAPORE Despite the fact that Asia's cellular operators did not have to pay billions of dollars for their own third-generation mobile phone network licenses, they have been no more successful than their European counterparts at luring customers.
If anything, some analysts say, the tepid response in Asia proves that 3G's disappointing debut worldwide had less to do with sky-high auction bids than with the industry's failure to find applications that would bring customers running.
"The expectations for 3G were very high," said Eleana Liew, a Singapore analyst for the consulting firm Gartner. "But there isn't anything drawing them into the new service."
The industry is learning. While operators say that itty-bitty TV shows are a nonstarter and video calls have fallen flat, localized information is showing promise. The phones, once clunky and short on battery life, are finally gaining mass-market appeal - customers in Indonesia are buying the new models even though there aren't any 3G networks there yet.
Better still, improvements in data speeds are enabling 3G downloads to work almost as quickly as users' home and wireless broadband connections.
The problem is, analysts say, that many operators in Asia marketed 3G as little more than a slightly improved cellular network, subsidizing phones and air time so that 3G would be no more expensive than existing services. The average cellphone user, however, had just two requirements - sexy phones and ubiquitous coverage - and 3G had neither. In addition to bulkier phones, many operators rolled out their networks only gradually to keep their costs in line with market growth.
The Singapore operator MobileOne was easily able to offer 100 percent nationwide coverage over the tiny island-state when it started 3G early last year and has managed to lure roughly 16 percent of its subscribers to the service by offering price incentives and more attractive phones. But it still finds that disappointingly few of these customers use their 3G phones to download data or make video calls.
"There's a human aversion to video calling," said Neil Montefiore, chief executive of MobileOne, which is now offering customers free video calls between Singapore and Malaysia to spur the market.
Analysts point to the experience of Japan for a glimpse of 3G's future. In late 2001, NTT DoCoMo introduced the world's first commercial 3G network. Rather than wait for 3G to stimulate data demand, DoCoMo introduced a service on its old second-generation network called i-mode that was open to developers, who could experiment with different types of content and then see what would catch on.
Five years later, though, DoCoMo has been able to shift fewer than half of its customers to 3G. Why? Older technologies caught up, analysts say: i- mode works on both 2G and 3G networks, as does DoCoMo's latest innovation - FeliCa - which enables cellphones to pay for items from vending machines. Moreover, while 3G-enabled cellphones download faster, by the time the service was introduced, consumers were not impressed. Fiber-optic lines enable Japanese to download data at home at up to 100 megabits per second, making 3G seem poky by comparison.
In South Korea and Australia, many industry executives and analysts are betting that WiMax and other forms of wireless broadband may make 3G obsolete.
DoCoMo and other 3G operators around Asia are now rushing to join European operators in implementing a software upgrade called HSDPA that will increase download speeds almost tenfold. Surprisingly, the leader in rolling out this souped-up version of 3G is not in Japan or even South Korea, but rather the Philippines. Globe Telecom introduced its 3G network in April on a trial basis and was immediately able to shift to the upgraded version, making it the first in Asia to offer it.
Indeed, analysts say that latecomers to 3G - like operators in China, India and Indonesia - may actually have an advantage. Not only will they be able to avoid 3G's teething pains, but they also will be able to imitate the companies that have been relatively successful with 3G.


SINGAPORE Despite the fact that Asia's cellular operators did not have to pay billions of dollars for their own third-generation mobile phone network licenses, they have been no more successful than their European counterparts at luring customers.
If anything, some analysts say, the tepid response in Asia proves that 3G's disappointing debut worldwide had less to do with sky-high auction bids than with the industry's failure to find applications that would bring customers running.
"The expectations for 3G were very high," said Eleana Liew, a Singapore analyst for the consulting firm Gartner. "But there isn't anything drawing them into the new service."
The industry is learning. While operators say that itty-bitty TV shows are a nonstarter and video calls have fallen flat, localized information is showing promise. The phones, once clunky and short on battery life, are finally gaining mass-market appeal - customers in Indonesia are buying the new models even though there aren't any 3G networks there yet.
Better still, improvements in data speeds are enabling 3G downloads to work almost as quickly as users' home and wireless broadband connections.
The problem is, analysts say, that many operators in Asia marketed 3G as little more than a slightly improved cellular network, subsidizing phones and air time so that 3G would be no more expensive than existing services. The average cellphone user, however, had just two requirements - sexy phones and ubiquitous coverage - and 3G had neither. In addition to bulkier phones, many operators rolled out their networks only gradually to keep their costs in line with market growth.
The Singapore operator MobileOne was easily able to offer 100 percent nationwide coverage over the tiny island-state when it started 3G early last year and has managed to lure roughly 16 percent of its subscribers to the service by offering price incentives and more attractive phones. But it still finds that disappointingly few of these customers use their 3G phones to download data or make video calls.
"There's a human aversion to video calling," said Neil Montefiore, chief executive of MobileOne, which is now offering customers free video calls between Singapore and Malaysia to spur the market.
Analysts point to the experience of Japan for a glimpse of 3G's future. In late 2001, NTT DoCoMo introduced the world's first commercial 3G network. Rather than wait for 3G to stimulate data demand, DoCoMo introduced a service on its old second-generation network called i-mode that was open to developers, who could experiment with different types of content and then see what would catch on.
Five years later, though, DoCoMo has been able to shift fewer than half of its customers to 3G. Why? Older technologies caught up, analysts say: i- mode works on both 2G and 3G networks, as does DoCoMo's latest innovation - FeliCa - which enables cellphones to pay for items from vending machines. Moreover, while 3G-enabled cellphones download faster, by the time the service was introduced, consumers were not impressed. Fiber-optic lines enable Japanese to download data at home at up to 100 megabits per second, making 3G seem poky by comparison.
In South Korea and Australia, many industry executives and analysts are betting that WiMax and other forms of wireless broadband may make 3G obsolete.
DoCoMo and other 3G operators around Asia are now rushing to join European operators in implementing a software upgrade called HSDPA that will increase download speeds almost tenfold. Surprisingly, the leader in rolling out this souped-up version of 3G is not in Japan or even South Korea, but rather the Philippines. Globe Telecom introduced its 3G network in April on a trial basis and was immediately able to shift to the upgraded version, making it the first in Asia to offer it.
Indeed, analysts say that latecomers to 3G - like operators in China, India and Indonesia - may actually have an advantage. Not only will they be able to avoid 3G's teething pains, but they also will be able to imitate the companies that have been relatively successful with 3G.