3GSM World Congress: Whither 3G?
By Carlo Longino, Wed Feb 25 15:15:00 GMT 2004

People at the show are saying this is the year for 3G in Europe, but, in a sense, you'd never know.

Nearly every network equipment vendor and mobile operator have been touting the recent and immenent widespread launches of 3G networks in Europe and beyond. While undoubtedly 2004 will (finally) see the spread of third-generation networks and services, is the industry buying into its own hype yet again? There's precious little in the way of 3G handset launches or meaningful 3G product demonstrations.

A couple of carriers have signs around Cannes announcing they're running 3G networks during the show, but there aren't many signs that they're ready to release any compelling applications to drive usage. Orange was showing off a novel video-chat system where a PC user with a webcam can make a video call to a 3G user, and vice versa, in a chat program with a familiar IM-like interface. It's a great answer to the "fax machine" paradigm -- somebody had to have the first fax machine, but until there was a big enough pool of fax machines out in the wild, that first machine was pretty useless. Now, somebody with a 3G phone can immediately extend their videophone circle to their PC-using friends. We couldn't find out if the Orange app could be made compatible with the video chat features of existing PC IM platforms like MSN Messenger or AIM, but that would make it even better.

NTT DoCoMo, as usual, was showing off its impressive FOMA devices and services. The great thing about DoCoMo is that the company's been showing off the same applications for a few years now, but it's so far ahead of European carriers, it doesn't matter. In terms of services and applications, DoCoMo's still the stick by which the Euro carriers are measured.

We've written before about how important the choice of handsets available to consumers has been for DoCoMo and the other Japanese carriers. DoCoMo recently released its latest series of FOMA handsets, and not too surprisingly, they're awesome. They're small and light, have amazingly bright and clear screens, megapixel cameras, and other impressive specs. While the UI doesn't seem as polished as some of the European efforts, these phones are the current gold standard for 3G terminals.

Compare this to the offerings from the non-Asian manufacturers -- if you can find them, that is. Perhaps the vendors are waiting for next month's much more gadget-centric CeBIT show, but only Motorola has announced new UMTS handsets at the show, two devices that won't be available until much later in the year. Nokia's new Communicator was their sole announcement, and a Siemens boss even went so far as to say they won't be offering any new 3G handsets until the turn of the year.

We told you yesterday about how the CEOs of T-Mobile and Vodafone both complained of a distinct lack of suitable 3G handsets, saying they need a wide range of devices being produced in mass-market quantities before they can go to market. The few devices thus far offered by non-Asian manufacturers have been bulky efforts with less than inspiring looks and forms.

While the lack of handsets certainly hampers carriers' plans for commercial launches (and gives an opening to Asian device makers), it doesn't relieve carriers from showing off the applications and services they've got in mind for when they do take their networks to the public. That's another benefit of the data card-only launches we're seeing from the likes of Vodafone: all you're selling is a simple data pipe with a net connection. No apps, not even voice.

But for the carriers' 3G investments to pay off, and this is no surprise to them, they've got to engage their non-business customers with compelling applications and services that they'll spend their money on. A search for concrete examples of any of their ideas for these services has proved pretty fruitless, which is a bit worrying. 3's subscriber figures may leave them open to some ridicule, but at least they set their stall out early with the applications they had in mind for their launch, video calls and football highlights.

The novelty of video calls will quickly wear off, and users will need other services to change their usage patterns away from current voice and SMS-based habits to something else, essentially something that will lead them to use more packets, and spend more money. But what will those be? The carriers don't appear to yet know.

These 3G launches are beginning to look like the proverbial tree falling in the forest. If a 3G network launches without any decent services, will anybody care?