Future is 3G

Mobile data communication will dominate failing voice technology, according to a recent survey.

The report called the Australian Mobile Market 2005 - 2010, reveals that as the widely used 2G and 2.5G protocols decline, success for mobile carriers will depend on getting users to migrate to emerging 3G technologies by intelligent pricing and user education.

Commonly used 2G and 2.5G protocols offer high quality voice with limited data transmission, while the largely unnoticed 3G technology supports bandwidth-hungry applications such as videoconferencing and full Internet access.

Warren Chaisatien, managing director of Telsyte, which surveyed major carriers and smaller operators, said even though it will be 2010 before 3G/3.5G users outnumber the 2G/2.5G segment, carriers need to change people's expectations of mobiles.

"The Apple iPod is a classic example of how a technology has changed the way we consume music within a relatively short time and carriers can learn from this example. With new applications like mobile TV, m-commerce and smart home now available, carriers need to change the way consumers expect to use their mobile phones," he said.

The survey says that by the end of 2005, 80 percent of mobile data revenue came from text messaging, a 2G and 2.5G based technology, while its struggling 3G counterpart represented 5 percent.

It said also that although market saturation will reach 100 percent this year, the mobile voice average revenue per unit (ARPU) is sinking $2 per month due to a rise in capped plans and a reduction in termination charges.

According to Chaisatien, the mobile virtual network operator (MVNO) market, where operators can lease wireless capacity from carriers, is rising in lieu with Australia's saturated market and represents a growth opportunity for carriers.

"For the rest of 2006, we can expect renewed focus on MVNOs particularly by popular non-telecomms brands and membership organizations. The rise of MVNOs need not be a threat to mobile carriers; in fact, it represents a growth opportunity they would never have realized on their own," he said.

He said carriers will be dependant on mobile data revenue over the next five years, with the proliferation of multi-mode handsets, adoption of 3G and VoIP technology and industry network, device and content convergence critical to the process.

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