The next wave of mobile telecommunications is finally upon us, the chief executives of two network operators and one equipment manufacturer said on Monday at the 3GSM World Congress in Cannes.
When Orange brings its 3G (third-generation) mobile communication services to market in the UK and France towards the end of 2004, the four vital elements will be ready: network infrastructure, services, phones - and customers, according to Thierry Breton, head of Orange's owner, France Telecom.
It's going to be a close thing for the phones, though, according to his colleague Didier Quillot, CEO of Orange France. Handset availability is definitely the weakest of the four pillars on which Orange's launch plan is based. The company is testing several handsets, including LG Electronics' clamshell U8150 and Motorola's soapbar-shaped A835.
Broadband boosts demand
Construction of 3G networks in the UK and France is already well under way: around 40 percent of the population of each country are within range of a 3G base station today, although the performance of some of those transmitters has not yet been fine-tuned.
Customers' appetites for higher-speed data on 3G mobile services have been whetted by fixed-line broadband Internet access, the market for which has boomed in the UK and France in the last two years. They are used to having a range of services at their fingertips and now want access to that environment wherever they go, he said. The availability of, and demand for, bandwidth over mobile networks has followed on the heels of improvements in fixed networks in France, said Breton.
This gradual build-up in usage has been mirrored by a gradual fall in the cost of data transmission, he said. To send up to 160 bytes by SMS (Short Message Service) costs around 0.15 (US$0.18). Sending around 50 kbyte by MMS (Multimedia Messaging Service) costs 0.40. Transmitting 1 Mbyte by GPRS (General Packet Radio Service) costs about 1.
Transmitting 10 Mbyte over 3G should cost less than a 1, he said. Quillot said tariffs for 3G services would likely include bandwidth bundled with wireless LAN services, and also pay-per-event pricing such as charges per multimedia message sent or video clip received.
Orange is conducting large-scale field trials of the new services with 4,000 customers in three cities: Lille, in the northeast, Toulouse, in the southwest, and Cannes, in the southeast, the company said. The network in each of the cities was built by a different one of Orange's three infrastructure partners, Alcatel, Nokia and Nortel Networks.
The networks in Lille and Toulouse went live two weeks ago; that in Cannes began service Sunday, successfully delivering 454 calls out of 459 attempts in its first night's work, Orange spokesmen said.
Orange's commercial 3G service will not begin until the end of the year, but it's more important to get things right, rather than be first to market, Quillot said in a jibe at French rival, Société Française du Radiotéléphone (SFR), which last week announced it will begin selling its 3G service in June.
SFR is part-owned by Vodafone, whose CEO Arun Sarin spoke at a separate event Monday.
History repeats itself
The launch of 3G is reminiscent of the launch of the second generation of mobile communications services, using GSM (Global System for Mobile Communications) technology, over a decade ago, said Sarin. Back then, wags suggested that GSM actually stood for "God send mobiles," because although the networks were ready and customer demand was building, mobile phones were in short supply.
"Some things never change," Sarin said.
Although he may harbour doubts about handset availability, there's no doubt in Sarin's mind about 3G's future.
"It's real, it's here. 3G has been a commercial reality for Vodafone for two weeks now," he said (referring to Vodafone's launch of a phoneless 3G data service in Europe)forgetting for a moment that the 3G network of Vodafone's Japanese subsidiary has been up and running for more than a year.
Sarin was a guest of Jorma Ollila, CEO of Nokia, an infrastructure supplier to both Orange and Vodafone, at a news conference in Nokia's tent down on the beach.
For Nokia, the most important thing happening this year is the commercialisation of 3G, Ollila said.
Nokia has the phones
Nokia is ahead of the game with one 3G phone, the 7600, already on the market in limited quantities in Germany, and another, the 6650, available in Austria and Japan.
On Monday, it also showed prototypes of the 7700, which is due to go on sale in May. Shaped somewhat like a bar of soap, the model available to play with at the news conference proved difficult to hold and was rather buggy, seizing up four times during a five-minute exploration of basic functions such as its media player, address book and filing system. Some crashes were cured by simply relaunching an application; others required removal of the battery and a cold reboot of the system.
Further ahead, Nokia also plans to refresh its clamshell Communicator range. Due on sale in the fourth quarter at a price of around 800, the 9500 Communicator will offer many of the features one might expect of a 3G terminal for business users, including a large color display, photo messaging, synchronization with a PC, Web browsing, e-mail, VPN support and integration with enterprise software from IBM, Oracle and SAP.
But the 9500 will not actually support 3G. Instead, the triband device will run nearly as fast over EDGE (Enhanced Data Rates for GSM Evolution), a packet data standard somewhere between GPRS and 3G in performance, or faster, with a built-in IEEE802.11b WLAN (wireless LAN) interface.
This perhaps backs up the suggestion that 3G is being aimed at consumers not businesses.
Surrounded by all these novelties, Ollila may have wished for a pair of older Nokia products, the rubber boots the company sold before getting into the mobile phone market. His speech was punctuated by the clatter of a mechanical digger laboring to build a protective dyke in the sand just outside the tent's flapping walls, and occasionally drowned out by the crashing of waves raised high by a storm blowing in from the south.
Unless disrupted by extreme weather conditions, the 3GSM World Congress runs through Thursday at the Palais des Congrès in Cannes, France.