Telcos expect losses from slow 3G take-up

As majority of Filipino mobile phone users shows little or no fondness in adopting the new 3G technology, mobile telecom giant Smart Communications Inc. expects to lose money in this particular service in the next three years.

"We are not expecting 3G to fly right away. We don't anticipate making money for several years, about two to three years," said Ramon Isberto, Smart Communications head for public affairs.

Of its multi-million subscribers in post paid and pre-paid, only 350,000 are using 3G phones, but it does not mean that these 3G phone holders are actually using the technology, he said.

What is becoming a popular service, which is offered via the 3G technology, is Internet browsing through cellular phone, instead of video call, Isberto said.

The charging of Internet browsing has declined from per megabyte charge in the past, to fix P10 per 30 minutes. This has pushed the Internet browsing service in the mobile phone attractive to Filipino users.

However, Isberto said because of multiple services that can be offered via 3G technology, Smart will be introducing more services in the next couple of months.

"People don't buy technology, but services," he said.

The 3G wireless communications technology will make possible high-speed data, voice, and video services. It promises greater bandwidth and higher transfer rates ranging from 384 kbps (kilobyte per second) to 2 Mbps (megabyte per second), a quantum leap from GSM technology maximum speed of 9.6 kbps. This speed also allows easier Internet browsing and downloading of huge files.

The 3G, or as the name implies, follows the first generation (1G) and second generation (2G) in wireless communications. 1G began in the late 1970's and lasted through the 1980s. These networks featured "cellular mobile radio telephone" that uses analog voice signaling.

According to Isberto because of the technology transformation, the mobile networks are now experiencing transition problems from using GSM based network, to 3G.

However, he said "there's benefit to 3G."

Meanwhile, in an earlier interview with Globe Telecom's Gil Genio also admitted that telecom companies are now facing challenges on how to draw majority Filipino market to embrace this newest mobile technology.

Of Globe Telecom's over 14 million mobile phone subscribers, about 100,000 or more users are now attached with 3G network. It means that handsets of these subscribers are logged-on to 3G or in dual-mode.

Genio mentioned that there are countries, like that in Europe that saw a discouraging turnout of the 3G technology, as revenue contributed from 3G services is very minimal.

"Other countries tried to offer 3G network because of bandwagon. China even has yet to offer this kind of mobile technology," Genio said.

"We (telecom companies) rolled out the 3G infrastructure as fast as we could. So what now? Not many people realized its full usage, while a lot of Filipinos can get signal or access to it," Genio said. He stressed that 3G is an alternative way to provide people with broadband access.

"With the arrival of 3G, our case 3.5G or HSDPA, the data speed is even five times faster. All contributing to an explosion of demand for broadband, whether wired or wireless," Genio added.