Call on hold

Call on hold

Suppliers say the new third generation mobile network could revolutionise the communications market. But New Zealand's IT directors seem happy to wait and see.

Suppliers say the new third generation mobile network could revolutionise the communications market. But New Zealand's IT directors seem happy to wait and see. Given that telecommunications companies (telcos) have a long history of promoting a technology for technology's sake rather than its business benefits, things do not bode too well for 3G.

Yet a series of 'soft' launches by operators worldwide have subtly altered the landscape for those seeking to benefit from 3G's advanced data capabilities. Indeed, there is considerable enthusiasm among those who have 'bitten the bullet' and become early 3G adopters.

During a recent telecommunications conference in New Zealand, Telecom, Vodafone and their suppliers were touting 3G's potential. 3G was hailed as the most exciting thing since, well, 2.5G.

Launched October 2004, Telecom's new network promises to cover by year-end, Auckland, Wellington, Christchurch, Dunedin Airport, plus the holiday hotspots of Queenstown, Wanaka, Taupo and the Coromandel.

Rival Vodafone promises to launch its faster HDDPA network in April 2005, with TelstraClear also working on offering its own 3G network eventually. By now, contractor Lucent Technologies should have upgraded half of Telecom's 800 cell sites to the 3G standard EV-DO.

The deciding factors

In New Zealand, coverage and price will be the deciding factors on whether or how soon local businesses will adopt 3G.

IT executives contacted by MIS are adopting a wait-and-see approach before committing to the new technology. While some appear unexcited about 3G, most are looking forward to its potential.

Promised faster download speeds should boost notebook use by remote workers, with council staff, for example, set to use it for telemetry and GPS reporting.

Mainfreight, for instance, has been putting off mobility projects while waiting for 3G's arrival in New Zealand shores. IT supervisor Mike Hood says his company is gathering information on 3G for projects starting in 2005. Mainfreight wants to mobilise applications such as CRM, vehicle tracking and pick-up and delivery applications.

"Potentially 3G opens up new doors and allows us to put new things on the go," says Hood.

Graeme Osborne, president of the Telecom Users Association of New Zealand, advises organisations to look at what 3G might offer. But he warns them not to get 'too hyped up", saying 3G is simply an increase in download speeds and "won't change the world"

Osborne currently "loves" the Vodafone connection on his laptop. It operates like a dial-up, he says, but 3G will be "five times faster", running like 256kbs broadband.

The Statistics Department information business services manager adds his organisation has "a watching brief" on 3G technology and could well adopt it &"once we understand it".

Osborne expects organisations with many mobile workers will adopt 3G, but adds his department has few of them.

Defence New Zealand is also waiting to "see how it develops"

"There are a range of issues, such a mobility capabilities, coverage and security. We haven't really gone into it beyond that,"says chief information officer Ron Hooton.

Christchurch City Council is "keeping abreast" of 3G's capabilities, but could use the technology for staff "out in the field". Acting information management and technical services group manager Deidre Butler says the council will look at 3G sometime in 2005. "But coverage is the issue. Let the technology bed in,"she adds.

Manawatu District Council also sees staff in remote areas using 3G for telemetry reporting and recording council assets using 3G's GPS locating ability. But once again, coverage will be the issue, says IS manager Laurence Bevan.

Ministry of Fisheries operations manager John Hanson believes 3G could be "really beneficial" for his remote workers in coastal areas who need access to business applications.

He expects the ministry to consider using 3G technology after the summer but he too, says, "coverage will be the issue".

Differing viewpoints<p/>Market analysts seem divided about the potential success of 3G in New Zealand.<p/>Auckland-based Chris Loh of IDC feels business users will be the early adopters of 3G technology for its mobility, though mobile entertainment will become big with general consumers.<p/>Loh says 3G will also aid the extension of converged voice and data IP networks currently linking branch offices. New IP equipment and services are transforming the IP communications industry, he says, though issues such as security, reliability and complexity still impede demand.

Service providers will also develop many value-added offerings. "Telecom's complementary 3G and wireless strategy looks to position them strongly in terms of best of both world service offerings modelled around customer behaviour (anytime, anywhere capability flowing into low-cost high-bandwidth at dwell sites)," says Loh.

However, Sydney-based Paul Budde accepts 3G is faster than 2G and promises 30 per cent lower operational costs, but he feels the technology is over-hyped and won't "make much difference" to business. "Overwhelmingly, the world is not enthusiastic about mobile data applications and there have been no major developments beyond texting," says Budde.

In 'mature' 3G countries, like Korea and Telecom, 3G operating revenue and profits are now falling, he claims.

In Australia, the Hutchison 3G network started slowly last year and now claims 500,000 users. This was helped by it capping toll calls to A$99 a month (now A$79) - a move other telcos followed.

Budde expects similar capped call-plans to arrive in New Zealand.

As for a mobile workforce, Budde says only 1 to 2 per cent of mobile users will be business travellers. "They will be much better off using wi-fi, wi-max and 'hotspots' at airports and coffee shops."

The early adopters

Overseas experience shows better fortunes for 3G once hurdles can be overcome.

Ted Matsumoto, architect of 3G technology for supplier Qualcomm, says both Vodafone and NTT DoCoMo initially struggled with their 3G services until they introduced better handsets with longer battery life and completed nationwide coverage in Japan and Korea. Consequently, in 2005, 3G phones are expected to make up half of cell phone sales in Japan.

As a late adopter of 3G, New Zealand will "piggy-back" on these experiences and the telcos should avoid the hassles that hampered 3G's growth in Asia, says Matsumoto.

The biggest sales point of 3G in Japan is low-cost data transfer. NTT DoCoMo's 2.5G handsets with megapixel cameras gave users very high monthly bills, encouraging many to shift to their 3G "Foma" handsets. For Matsumoto, the "killer app" of 3G is making its cost reasonable for hundreds of thousands of users, thus 3G faces an issue of marketing, not technology.

Many application developers are hungry for business, says Matsumoto, who spoke at the recent Wireless Data Forum Convergence in Auckland. The higher costs of 2G forced the axe on many projects, which could be made viable and revived under cheaper 3G.

Consequently, as in Asia, he sees business people using 3G for telephone conferences, messaging, internet mail, information storage, plus personal uses including shopping, banking and music.

Brian Barcelo, international business director for Lucent Technologies, told the Auckland forum Telecom New Zealand should succeed with 3G. Entertainment spending was a growing part of people's wallets so people will want 3G's higher download speeds, he says. In addition to entertainment services, people will want 3G's impending services covering VOIP and video broadcast/multicast. EV-DO also boosted wireless use in Korea for services including music, television, movies, games, 'what's hot', adult entertainment, news and traffic reports.

"The value proposition for the enterprise is anytime, anywhere access to the corporate intranet, reduced operational costs, increased customer and employee satisfaction," says Barcelo.

In the US, 3G technology is being used by government for facial recognition and biometric applications, retina scanners and accessing databases of fingerprints. The Emergency Services are using 3G for remote diagnostics and Washington Police is using the technology to remotely check licence plates. Such services were secure, as there are currently "no interruption technologies for CDMA", he says.

In the UK, 3G has had a slow start, with services starting last year, but extra networks this year and the launch of new phones and services this Christmas, should give the technology critical mass.

Nicolas Wheeler, managing director for multimedia content at UK television news service ITN, views 3G as the communications media of the future. ITN supplies content specifically for 3G handsets, offering features and characteristics that would not be achievable under previous 2.5G (GPRS) technology.

After Christmas 2004, most 3G phones on the market will be capable of video, giving "a critical mass of people for services like ours", Wheeler explains.

"It (dabbling in 3G services) makes sense for us because, as a major independent content supplier, we're able to pay off the costs of gathering news among a wide variety of contracts," he adds.

Into the fast lane

Like Telecom NZ, British telcos Vodafone, Orange and T-Mobile are pushing data cards ahead of handsets.

UK marketing agency Avvio has nine account managers with 3G-enabled notebook PCs. "Our account managers can now walk into a client's office, open their notebooks and download a 3Mb file in seconds. We can download proofs, large PDFs and even small, animated movies. You simply couldn't do that before without a lot of fuss," says CEO Duncan Gardner.

Gardner's main pitch for 3G, therefore, is as a personal productivity tool, adding that he was once stuck in traffic, but the time spent in the taxi was not wasted as 3G allowed him to do 50 minutes of work by email.

Technology consultancy Cochango has deployed 10 3G cards for their mobility, believing a laptop PC enabled with a 3G data card bridges the gap between pocket mobile devices (PDAs) with their limited application suites and LAN or wi-fi bound PCs with no mobility.

Cochango director Richard Poole claims he can parachute a project team into a client's premises in a couple of hours.

"In the past it could have taken as long as a week to achieve - even though it's just a question of hooking up a few wires."

Perhaps more importantly, Poole claims with 3G you have reached the tipping point where you do not have to worry about re-engineering applications just because they are mobile.

"Everyone who uses a mobile phone as part of their job is a potential candidate for 3G data. Instead of using voice, with 3G you're leveraging your data assets to provide information," says Poole."

The question remains though, if 3G is as good as its supporters claim, why has it received such a bad press? "It's quite popular to be negative about new technologies," says Poole.

"To date, the mobile phone industry has been technology-led and has yet to learn the art of talking about business benefits. What we need is for the suppliers to put mobile data into the language of business. Yet, it's amazing how quickly you become reliant on 3G. I'd predict that in a few years, 3G data is going to be like mobile phones and email - you'll wonder how you ever survived without it."

As ITN's Nicholas Wheeler comments, 3G offers better quality pictures, longer clips to view, faster downloads and better sound. The trick lies in identifying the benefits for your business.


How the 3G market is evolving.

Why New Zealand organisations are taking a pragmatic view of the technology.

What are the prime factors affecting local uptake of 3G

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