3G fever hits RP

3G is the next-generation telecommunications network that will allow broadband-like speeds via your mobile phone. In fact, we are already up to 3.5G today since our local networks have been upgraded with HSDPA (high-speed downlink packet access) which increases download speeds five times. The number of 3G subscribers around the world is estimated at almost 150 million. They currently account for less than seven percent of all mobile subscribers but take-up is gaining velocity as 3G handsets have grown to over 300 models. The heaviest concentration of users is to be found in the Asia-Pacific region, such as in Japan and Korea. A wide array of mobile data services is now being offered in advanced 3G markets covering messaging, entertainment and business applications. As such, with the very high mobile penetration rates in most markets and falling subscriber ARPUs, the importance of advanced data services is starting to gain significance in driving new revenue streams for operators.

In our part of the world, the 3G hype is increasing via full-spread newspaper placements, billboards in the most prominent locations and thematic TV commercials. The 3G buzz being created by our telecom operators is certainly starting to capture the imagination of wireless Pinoys. They have embarked on an educational and trial phase for this new offering so subscribers could comprehend what 3G is all about and how it may benefit them. As such, local postpaid and prepaid mobile subscribers with 3G-capable handsets can now enjoy rich media content and enhanced applications. These include live TV streaming from ABS-CBN and GMA-7 and 3G downloads of video clips and music tracks. Likewise, 3G users can also make video calls not only within the country but also with 3G subscribers of mobile phone operators in other countries like Japan, Hong Kong, and Singapore, just to name a few. So try picturing this: an OFW gets homesick, pulls out his 3G phone and places a video call to his loved ones back home. If that sounds so familiar, I would say that it’s the most used 3G advertising theme. Well, why not? OFWs comprise 10 percent of our population.

To encourage the trial use of 3G services by subscribers, operators have made their pricing schemes parallel with 2G rates. One operator offers local video calling for free while keeping the price of international video calling on the same level with a regular IDD call. Video streaming is priced at a ringtone rate of P15 for 30 minutes of streaming regardless of the quantity of video you access, while Internet and WAP browsing is priced at P10 for every 30 minutes. Downloads of games, video clips and music tracks are priced between P20 and P50 depending on the type of content. The MMS rate has been priced lower now at P1 as compared to P5 before. This may serve to finally increase peer-to-peer MMS usage. I recommend though that you call your operator so you could fully understand their 3G charging rates.

I believe 3G will eventually become popular but this will only gain some traction when new handsets go below P10k, battery life improves dramatically, quality content becomes affordable and the second-hand 3G phone market becomes more robust. For the operators, the challenge I see is figuring out the right cocktail of service charges that can attract a critical mass of users. Take the case of the Pinoy market. I guess mobile TV would be the most popular product. The ability to offer streaming is one of 3G’s central appeals but at what price? At the current 3G rate, a one-hour TV stream of lackluster content will set a user back P30 plus the risk of his mobile phone going low batt. One may try video clip downloads and get dealt with at least a P20 charge for a one-minute clip. That’s a lot of money spent there for the average Pinoy, I would think. Likewise, if the service is jerky or content-limited, customers will be disappointed and may no longer try the service again. Mobile music downloads may prove to be a popular service because of the popularity of ringtone downloads, but with the cost of licensing agreements with record companies, can fresh quality content be made available regularly to subscribers at a reasonable price? From what I see from the selection of truetones and ringback tunes, the choices seem not enough to attract much usage.

Owning a 3G phone has become an aspirational consideration though. To give carriers credit for their targeted advertising themes, even my 65-year-old aunt has asked me to recommend a unit she could purchase so she may "3G" with her grandkids. The numbers of 3G handset owners in the country is almost 500k and growing, but not many, it seems, have tried the 3G services. I will be honest to say that I have owned two 3G phones for four months now and I just tested their 3G function last week. Just to share that 3G trial experience with you, a 30-minute video stream made me lose two bars of my phone’s battery life. I was in a cold sweat as I was left with one battery bar and still had to make numerous calls. I do not think I would try it again unless I have a charger close by. Despite all the inconveniences that come along with the new technology, it will only be a matter of time when handsets become affordable, battery life is extended and most importantly, subscribers realize the value of the service. Rich content on the go will truly be a wireless Pinoy’s fantasy come true.

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I just read recently that 3G operator Mobile Media 3 of the UK announced that its mobile subscribers downloaded one million music tracks and videos last April. 3 offers its 3.5 million subscribers 500,000 music tracks from all the record labels. The average ARPU a month of a 3 subscriber is a whopping US$44 versus US$7 for our local subscriber. Amazing numbers! It’s no wonder that 3 is second to Internet-based iTunes in the UK in terms of download volume per month!

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Patrick R. Garcia is the managing director of Bidshot Wireless Services. For comments or suggestions, e-mail [email protected]