3G could be due for a long-awaited surge in popularity in 2006, according to a report by the BBC.  Currently, simple voice and SMS texting far outweigh all other services in Europe, with only 1 Euro spent per customer per month on all other services combined.  This is not good news for the network operators who collectively spent some £22 billion on 3G licenses for the UK alone.

 

The BBC's article, by Stephen Cole, argues that the launch of new higher speed 3G services such as HSDPA (High Speed Downlink Packet Access), coupled with better software and the 2006 World Cup, could all lead to renewed increase in 3G and better service offerings by the network operators and service providers. But I'm not convinced...

 

Read more about my doubts for the 3G industry after the jump.

 

[Source: BBC News]

 

 

 

To me, the two key reasons 3G has not been a success so far are the cost of the service and the lack of a killer app. High speed data is all very well, but if it costs a lot to transfer that data, nobody is going to use it.  Equally, the lack of widespread 3G adoption has shown that there is no single killer 3G app that will tempt users to switch to the service. People don't need high speed mobile data at any cost, and there is simply no single 3G-only app that is indispensible.

 

The mobile operators have been tackling the problem of low 3G adoption from a top-down approach, when what they should be doing is fostering a more bottom-up approach. Currently, the operators have been trying to stimulate the market by creating 3G services offered at expensive prices, expecting users to switch to 3G just to access these great new services. But this relies on the operators guessing what services the user wants, and so far, they've failed spectacularly. Network operators are good at shifting bits, not at creating content. Far better, therefore, to drop the prices, open the content market up, and let users provide the services for themselves. This is a bottom up approach, in which the services and content emerge according to what the customers want. It's the model of the Internet, which hasn't exactly been unsuccessful!

 

You need only look at the home broadband market for inspiration. 1Mbps+ broadband has existed in the UK for years, but we all put up with 56kbps dial-up because the cost of broadband was prohibitive.  It's only since the price has come down that the adoption rate of broadband has increased. Equally, since the cost has come down, more and more web sites now require a broadband connection. This they can safely do, because enough people now use broadband to make their high-content services viable. If broadband costs remained expensive, nobody but the ISPs would provide broadband content, which in turn would make it not widely used...recognize a pattern here?

 

In today's age of open information systems such as the web, with free content supported well by advertising, expensive systems with proprietary content such as those offered by the mobile network operators seem like dinsoaurs and will simply not be used.

 

So my advice to the operators: bite the bullet, drop the price, and let the market emerge by itself. It's what happened with the Internet - why do you think your 3G network is any different?

 

But that's just my opinion: feel free to express your opinion on the poor uptake of 3G.