3G: Then And Now
By Mike Masnick, Tue Sep 07 23:45:00 GMT 2004

We were promised quite a lot about 3G. Is it coming true?

When mobile operators first started talking about 3G, there was plenty of hype. The mobile industry is no stranger to overhyping and under-delivering, so this should have been no surprise. It got so bad, that at one point last year, The Economist even wondered if 3G was doomed. The conclusion that article eventually reached, of course, was that 3G wasn't doomed, it was simply a victim of being unfashionably late to its own party.

In the past few months, as 3G rollouts seem to be announced every few days, it seemed time to revisit the issue, and The Economist is on the job again, wondering if what we're seeing now is living up to the original hype -- just a few years late. The article points to a quote from 2000 saying, "The device will function as a phone, a computer, a television, a pager, a videoconferencing centre, a newspaper, a diary and even a credit card...it will support not only voice communications but also real-time video and full-scale multimedia." As the Mobile Technology Weblog notes, this really isn't that far off from the types of applications and services we are hearing about today. Not all are fully baked, and it's not clear that all will be a success, but they're all still possible.

That doesn't, however, mean that the original vision of a 3G world is coming true. There have been some huge stumbling blocks, starting with the convoluted process of spectrum auctions and allocation that forced plenty of mobile operators to pay ridiculous sums just to remain in the mobile service business at some point in the future. This huge capital expenditure has made it much more difficult for the operators to justify their 3G efforts, and has them so focused on the bottom line that they may be missing the bigger picture.

Take, for instance, the original focus of 3G providers on video messaging. This is, of course, a concept that has failed to catch on over the years via landlines, despite many, many attempts. This and other data services the operators insisted people would want (without any evidence) were partly a result of these high initial fees. The operators needed to justify the buildouts, and they couldn't do so with vague promises of applications and services that they weren't sure about. So, instead, they ended up picking on flashier apps and services, like video messaging, and trying to charge a huge premium to do so. What they quickly discovered, of course, was no one was interested in many of these offerings -- especially at a premium price.

In response, the carriers have fallen back on what they know best: promoting voice. After all, a big part of the push to 3G wasn't just the faster data rates, but that their 2G networks were running out of voice capacity. Suddenly, instead of all the wonderful fancy video messaging and high speed data apps, 3G services were being promoted for their cheap voice minutes. The Economist article points out that the real issue may be that no one discovered the true "killer app" for 3G data because 3G may be more about niche apps within different segments, rather than a major killer app for everyone. Of course, the mobile operators have hardly given any apps a chance. Instead, they focus on walled gardens or short-term money making strategies, rather than opening up. There's a benefit in seeding the market, but the operators know voice, not data. It's about time that the operators let others provide the data apps and services that will make 3G's original data services not only live up to its original potential, but go well beyond it.