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Content is king for 3G. But what content?

I want my Killer app

Analysis Content and applications are the key to spurring uptake in 3G mobiles.

Says who? Says the panellists debating a Work Foundation study, MobileUK: Mobile Phones and Everyday Life, last night at the organisation's London offices.

According to the report the high cost of phone calls and handsets could dent the uptake of 3G mobile technology. This prompted the debate Do we really need 3G? (a question we've sometimes pondered also).

The short answer is: yes, but maybe not yet and not necessarily in the way 3G services are first entering the market.

Panellists, including industry analysts and Microsoft UK MD Neil Holloway, argued that carriers will have an uphill job persuading consumers to embrace 3G, certainly in the short term.

John Fletcher, senior consultant at telecommunications consultancy Analysys, said the industry needs to be wary of repeating mistakes which marked the introduction of WAP. This technology failed to live up to its promise of delivering a customer-friendly "mobile Internet" experience.

WAP was a let-down. And that means that punters are more sceptic about 3G, according to Fletcher, who forecasts a gradual take-up only for 3G: "With 3G, people need to be convinced content is worth paying for," he said.

Girls, games and gambling are often cited as the killer content for 3G. Fletcher goes along with that, with a caveat or two.

3, the UK's first 3G network, has, for example, appointed a Director Of Adult Content. Playboy is among its many media partners.

Fletcher, along with others at the meeting, expressed doubts about whether or not it will be socially acceptable to view porn in public.

And games? Well, 3 is to offer clips of Premiership goals but current limitations (still to be ironed out) mean these can only be delivered an hour after the event, Fletcher says. Delivery times, and revenues, should improve by the time Euro 2004 rolls into Portugal next year.

Content is king

Participants in the Mobile UK debate noted that the far faster speeds available - five times faster than GPRS - delivered to users in South Korea has spurred the take up of services in the country. Looking at South Korea gives some clues as to the likely reception of 3G services in Europe.

Analyst firm Strand Consulting reported last week that average revenue per user (ARPU) in South Korea is almost as large as the biggest European countries and "has grown almost overnight" as younger mobile consumers switch to Java-enabled colour mobile terminals and download speeds of up to 144 Kbps.

Mobile services are growing and the media companies are lining up to become part of this fast growing business, Strand notes. It argues that content providers, worldwide must go mobile to survive.

"In the coming years, the mobile platforms will be one of the only major sources of new revenue for media companies, as their traditional markets decline and customers fragment and have gone online," Strand says.

But speed isn't the only factor that determines success in the mobile industry; and content (at least in the conventional sense) isn't always king, analyst firm Forrester Research cautions.

All European telcos can learn valuable lessons from i-mode and Vodafone live!, according to a brief issued by Forrester today.

Europe's i-mode gets the services right and the marketing wrong, while Vodafone live! does the opposite, it argues.

Since its launch last Spring in Germany and the Netherlands, and in France and Belgium six months later, i-mode's base grew to 336,000 users at the close of 2002. Vodafone live! launched last October in
the UK, Germany, Italy, Spain, the Netherlands, Sweden, Ireland, and Portugal - and has already hit its one million-subscriber goal.

So who's got it right? Over to Forrester analyst Michelle de Lussanet:

"At present, i-mode gets the services right and the marketing wrong and is struggling to sign up new customers. However, the customers that do sign up rave about the service and translate their enthusiasm into revenues: 83 per cent of existing customers are satisfied with the service, and i-mode users spend on average € 7 more than other users. By contrast, Vodafone live! puts a great message on top of weak services. While Vodafone live! outsold i-mode five to one in countries where the two compete over Christmas, unsatisfied users of pure content services will abandon them when free trial periods run out."

Forrester advises i-mode providers and Vodafone to plug the gaps by weaving "conversational content" through service design and marketing.

"Providers must enhance existing content to make it conversational. For instance, they could enrich weather services with the capability to distribute weather maps to friends, with an invitation to a picnic or a warning to drive safely in the fog attached," de Lussanet says. "Marketing campaigns for conversational content services should promote desired states of mind, not specific technologies or services."

In other words, mobile phones as Yoga. Or colonic irrigation.

Search for the killer app continues

A meeting on the future of 3G technology is hardly complete without a discussion on killer applications. Has anyone identified the killer 3G app yet?


All the speakers at last night's Mobile UK debate appear to agree that location-based services and peer to peer content exchange, sending pictures and video clips to friends, look like promising revenue streams. But naming a technology that will do for 3G what SMS did for 2G had everyone stratching their heads. Content and services will drive adoption of 3G, everyone agrees, but how do we get there, without the foot soldier? Mobile UK panellists expressed concern over the dearth of application developers working on 3G applications. The closed architecture of 3G networks may even impede development, the panel suggested.

Death of the Business Case

Soon many people will have a 3G phone - which they will use on 2G networks.

Dr Ben Anderson, deputy director of CHIMERA, an institute for socio-technical research linked to the University of Essex, argued in the Mobile UK debate that usage patterns for 3G are inherently unpredictable.

He outlines a beta-world scenario where the mobile industry creates numerous different services and companies then "jumps on something as quickly as possible, when it becomes successful".

According to Anderson the unpredictability of 3G uptake marks the "death of the business case". This intriguing perception may have fallen on deaf ears on some attendees at the Mobile UK debate - perhaps the world isn't ready for just-in-time marketing, just yet. ®

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