When GPRS was first seriously proposed by operators, way back in 1999, it was going to be the 'killer technology' - the speeds would be huge, the applications astounding, and the users ecstatic. It hasn't worked out like that at all.
Although almost all European operators are running or trialling GPRS services, the subscriber numbers are low. Analysys reckons that Western Europe will only have 864,695 users by the end of this year - certainly not enough to counterbalance the billions spent on network upgrades.
So what are the operators playing at? Have they missed the boat, or is this migrational user lag all part of their strategy?
Same old problem
Unlike the subscribers the operators are instinctively reliving their futile past. Instead of focusing on selling the actual benefits of GPRS, they are once again pushing out technology rather than services. As Stephen Griffiths, founder of Wonderwerx, a 2.5 - 3G technology start-up points out, "The trouble is that GPRS was originally, like WAP, sold as a technology. Business users were told it was new, and always on, but not what they could do with it."
The consumer market - obviously having learned an important lesson - is sending out the right message to the operators, device manufactures, et.al. Subscribers are getting the basic information that they need and find useful with existing (limited) service offering. Ultimately it's the service that drives the market forward not the technology or the devices.
However, the enterprise market is more apt to use GPRS services - giving operators some hope. "Business users will be the big market here, with the usual email, calendaring and backend workflow system access, but again this market has not been fully addressed so far. It may be cheaper to use GPRS to do all these things compared to GSM, but these services are not being fully used now - there is a lot of user education to be done," comments Analysys analyst Katrina Bond.
"Another central issue at the moment is the pricing of services across Europe - they vary by a factor of 20, mainly because operators are striving to recoup as much revenue from early adopters as possible. A mass market launch just isn't possible at the moment because of this revenue shortfall and the lack of handsets," adds Bond.
How long should we wait?
Peter Bellew, Wapprofit.com CEO says, "Some of the GPRS apps we sold to operators six months ago still haven't been deployed - across Europe the operators seem to be concentrating on stabilising the networks before getting more users on board. There is also a retailer education job to be done, which will cost a lot, and in the current economic climate this won't happen for a while - Q1-2 next year at best. I think we'll see a big push next year, around Q2, with some really sticky apps, such as gaming, etc, but not before - people still don't use HSCSD, which has been around for ages!"
Orange (France Telecom) claims 15-20,000 data customers for Europe, all of which are HSCSD - again, the figures are not impressive. The company has also recently announced that it's UK GPRS launch will be delayed until Q4 this year.
"We are taking things slowly with GPRS - other operators have rushed in, and it doesn't seem to have done them a lot of good. We're making sure the network will be robust, and that revenue models and billing problems are ironed out," a spokesperson comments.
The aforementioned factors are critical. The issue now is how will it take before those business cases are in place. Time is ticking away for many of these operators and the justification they have given will not be a solid excuse for long - when the going gets rough.
WLAN technology to the rescue?
However, salvation for GPRS may be at hand from a highly unlikely source. The recent furore over WLANs and their possible uses in 'hotspots' has triggered a strong reaction from the operators.
"I know that two out of four European operators are seriously looking at integrating GPRS and 802.11b - BT even has a demo car rigged up with the two technologies. The two ethernet-based technologies are similar at a network level, so billing won't be a problem, and the combination offers a good user route into 3G," verifies Bellew.
Ericsson and Telenor have been testing a similar service in Norway, using WLAN technology and packet networks. Although Telenor was unwilling to comment, pending full interoperability reports, HyperLAN2 forum Chairman and Ericsson product manager, Martin Johnsson discloses, "We are currently evaluating what can be done, both with current packet networks and future (3G) technologies. The integration of WLANs and cellular networks is certainly something that most operators are seriously looking at - we have seen a huge amount of interest!"
Analysys analyst Monica Paolini, points to slow GPRS uptake as a driver. "European operators are definitely looking at this new opportunity - the only question is whether they'll be on time to market with this one. Users are interested in higher bandwidth services, it's simply a case of servicing this need competently. Telefonica and Iobox are running a GPRS/WLAN trial in Spain, which should come online soon."
So, while WLAN technology may provide a side-show to prop up GPRS, surely more of the same problems apply? Bond thinks this may be the case - "It's a great idea, and I'm sure we'll see it coming through soon, but it will certainly add in extra delay as operators integrate the two technologies, and handsets are produced. "
"This said, I think the window of opportunity for GPRS has widened considerably. 3G will not be fully operational for some time - commercially viable services will make an impact around 2006, and even when this happens there will be enough room for both cellular technologies to co-exist."
In the meantime...
But in the interim, what are operators doing to attract more users? Sonera is due to launch a streaming media portal this month, providing football clips ahead of the World Cup, which is solely for the use of GPRS customers. Although Sonera launched GPRS back in November 2000, uptake has been slow, and the company is clearly keen to exploit any 'niche' content that may drive subscriptions.
Telia has recently launched a new style of GPRS offering, dubbed Telia Mobile OnLine. The service does not require a new subscription, but is a supplementary service which Telia's GSM customers can activate. Users can send and receive e-mail and use a range of Internet-based services from their phones. Telia has been conducting a wide-ranging market research to analyse what users are looking for.
"The tests we have carried out over the year have been very successful. Above all, they have given us valuable information on what our customers want to do with GPRS and how they want to use the new technology," says Anders Bruse, Head of Telia Mobile Sweden. "
"Over the first six months of this year, SMS traffic increased by almost 200 per cent compared with the same period last year, and we can clearly see a new pattern of usage developing. Our customers want to use their mobiles for more than just talking," he continues.
Aim for simple tariffing models
The use of a different style of billing, opt-in, like Orange's current HSCSD service, may well hold the key to migrating more users. "To really get GPRS out there in volume, operators need to instigate very simple pricing models - Mannesmann, T-Mobile and Mobilkom are good examples of making the pricing structure too complex, " states Bond.
"In the UK billing by Mb is clunky, but in Austria and Germany there is a charge of time as well. This makes the actual charges very hard to calculate."
"For operators to make top revenue from call charges, they will need to remove the current bars for users. If you know that downloading something or viewing email will cost x pence, then you tend to make a calculation about whether you are willing to pay. Operators need to ensure that this thought process doesn't occur," adds Griffiths.
It seems that there is still time for operators to save themselves. Although GPRS so far has been a damp squib, the chances of it being superseded in the near future are low. As more handsets come through (Sagem and Nokia especially) users will be encouraged to migrate, and the more unconscious this process can be made, the more users will make the leap.
Whether other technologies will be integrated to give a richer user experience is yet to be seen, but it seems likely that simplicity in billing, handsets and roaming will win the day. After all, GSM technology didn't get where it is today by being impenetrably complex...
It's GPRS Week on TheFeature! Get up to speed on GPRS rollouts, devices, applications and services all week right here.
Mark Mayne has been covering the wireless industry for the last two years, both as a freelance and a daily news journalist. Previously he worked for the Telegraph and the FT groups.