Product Type: Market Research Report
Published by: Analysys Mason
Published: August 2004
Product Code: R51-166Description The low data speeds of 2.5G technology, along with cost and capacity constraints, have limited its ability to support Internet/intranet services, allowing public WLAN to establish a strong foothold. This report considers how the introduction of 3G now enables mobile operators to offer wide-area high-speed services. Given the lack of attractive small-screen GSM/GPRS/W-CDMA handsets, many European operators have launched 3G with high-speed Internet/intranet services for PC datacards, targeted primarily at business customers. However, they must proceed with extreme caution, as many pitfalls exist.
Mobile operators need to decide whether to pursue services built on 3G alone, or to develop integrated 3G/WLAN offerings. The report studies how mobile operators are adopting different technology approaches, and identifies the best strategies for them to follow. It identifies the most effective implementation and marketing strategies for the different technology approaches, to build on their inherent strengths help to overcome weaknesses. Pricing will be key to achieving profitable levels of revenue per Mbyte and avoiding capacity issues. Through a pricing model and case study analysis, the report identifies optimum pricing approaches. It shows that integrated pricing across WLAN and 3G services can lead to a dramatic reduction in 3G revenue per Mbyte, or in services that are uncompetitive with independent WLAN hotspots.
High speed 3G Internet/intranet access - displacing WLAN? answers your key questions:
• What technology and service approaches are currently being followed? What can be learnt from existing services?
• What are the fundamental differences between wide-area cellular and WLAN, and how do these define their optimum role?
• Will 3G displace WLAN hotspot services? Should mobile operators pursue 3G-only services?
• Should mobile operators focus on integrated 3G/WLAN services? If so, should they build their own WLAN hotspot network, or rely on third parties?
• What are the most effective implementation and marketing approaches for the different technology options?
• How should 3G Internet/intranet services be priced to stimulate usage while maintaining revenue per Mbyte? Should usage be charged per minute, per Mbyte or per session? Can WLAN pricing models be applied to 3G?
Who should read this report?
• Mobile operators: identify the best technology solutions and the most effective service implementation and marketing approaches
• Public WLAN service providers: understand the threats and opportunities from 3G Internet access
• Equipment vendors: understand the drivers for investment in 3G to support growth of 3G Internet/intranet access
• Investors: understand the importance of Internet/intranet access in the 3G service portfolioTable of Contents - Summary
- 1. Operators must take care as they launch 3G Internet/intranet services
- 2. 3G extends the opportunity to satisfy demand for wireless Internet/intranet access
- 2.1 Demand for Internet/intranet access services encompasses a mix of customer requirements
- 2.2 2.5G technology constraints limit its potential for Internet/intranet access
- 2.3 PWLAN services have proliferated to address the market for high-speed Internet/intranet access in hotspot locations
- 2.4 3G can support wide-area high-speed services but mobile operators need to position this proposition carefully
- 3. Characteristics of 3G and PWLAN suit them to different service requirements
- 3.1 Different technology approaches by 3G operators show that the choice is not clear cut
- 3.2 3G and WLAN technologies have very different characteristics
- 3.3 In the future, 3G microcells could mitigate the limitations of wide-area cellular technology
- 3.4 Technology strategy must exploit the benefits of 3G while recognising the importance of hotspot locations
- 4. Among the implementation issues for mobile operators, pricing is a particular challenge
- 4.1 Operators face challenging implementation issues if they are to achieve success
- 4.2 The complexity of wireless Internet/intranet pricing must be modelled to reveal the implications for operators and users
- 4.3 Volume-based charging has important benefits, but operators need to ensure control and affordability for end users
- 4.4 Time-based and unlimited usage tariffs jeopardise revenue per Mbyt
- 4.5 Integrated 3G/PWLAN services may benefit from simple, common pricing but major pitfalls exist
- 4.6 Internet/intranet services have an important role in the 3G service mix, if handled with care
- Actions
- List of figures and tables
- Figure 0.1 Comparison of wide-area revenue per Mbyte and hotspot cost per hour for a variety of customer usage profiles and tariff structures
- Figure 2.1 Characteristics of mobile Internet/intranet service usage
- Figure 2.2 3G service decision framework
- Figure 2.3 Uncertain revenue per Mbyte and stringent performance requirements for Internet/intranet access delivered by 3G technology
- Figure 3.1 Critical questions and challenges in the delivery of a successful, profitable Internet/intranet service
- Table 3.1 Examples of 2.5G/3G/PWLAN positioning by mobile operators
- Figure 3.2 Examples of PWLAN hotspot pricing for 24-hour vouchers, July 2004
- Figure 3.3 Examples of PWLAN hotspot pricing for unlimited monthly usage, July 2004
- Figure 3.4 Customer cost per month and operator revenue per Mbyte for 10Mbyte of GPRS data per month from selected Western European operators, July 2004
- Figure 3.5 Customer cost per month and operator revenue per Mbyte for 50Mbyte of GPRS data per month from selected Western European operators, July 2004
- Figure 3.6 Comparison of GPRS and 3G costs: customer cost per month and operator revenue per Mbyte for provision of 50Mbyte of data per month from selected Western European operators, July 2004
- Figure 3.7 Comparison of GPRS and 3G costs: customer cost per month and operator revenue per Mbyte for provision of 100Mbyte of data per
- Table 3.2 Examples of PWLAN players and their strategies
- Figure 3.8 Possible deployment strategy for 3G operators to squeeze PWLAN hotspot competitors
- Table 3.3 Comparison of technology strategy options
- Figure 4.1 Example service mixes for 50Mbyte and 100Mbyte monthly
- Figure 4.2 Example service mixes for 50Mbyte and 100Mbyte monthly consumption
- Figure 4.3 Revenue per Mbyte of 3G Internet/intranet service tariffs, July 2004
- Figure 4.4 Comparison of 3G and PWLAN costs for customers consuming 100Mbyte per month with different usage profiles
- Figure 4.5 Comparison of costs per month for Vodafone Germany’s 3G and PWLAN customers consuming 10, 50 and 100Mbyte per month with different usage profiles
- Table 4.1 Volume- and time-based 3G tariffs from T-Mobile (Germany), July 2004
- Figure 4.6 Comparison of wide-area 3G operator revenue per Mbyte and PWLAN hotspot customer cost per hour for existing integrated pricing plans, for a variety of customer usage profiles
- Figure 4.7 Comparison of wide-area 3G operator revenue per Mbyte and PWLAN hotspot customer cost per hour for potential integrated pricing plans, for a variety of customer usage profiles
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