3G mobile communication: Is it too early?
By Zermenay Ata
THE mobile telecommunications industry is witnessing a period of robust and unprecedented global growth worldwide. The net result of this high-growth rate is that the mobile subscriber base has reached two billion users, surpassing the seemingly invincible fixed-line user base of 1.2 billion and by 2007, one in every three persons is expected to have a mobile phone.
Even now, around 450 million new handsets are being purchased every year. In certain parts of Europe and Asia, around 80 per cent of the population has a mobile phone.
While developed markets are getting saturated, developing countries like China, India, Indonesia, Pakistan and Vietnam, where mobile density is low, offer some of the highest annual growth rates and thus offer exciting opportunities for stakeholders to expand the business.
One of the most exciting of these opportunities is 3G services. As the debate for 3G is becoming stronger and stronger, it is important to know what is it and how much does the market show readiness for 3G?
As is well known, 3G uses a different range in the radio frequency spectrum to second generation (2G) mobile telephones providing a wider range of primarily data services. It(3G )delivers high-speed, always-on data connections to mobile terminals enabling mobile network operators(MNO) to offer a broad variety of new applications that are moving the 3G MNOs from being voice providers to data and multimedia service providers. In markets where mobile telephony is saturated, 3G is being introduced to overcome the declining revenue from voice services.
Letââ¬â¢s talk about the stakeholders in 3G and what is at stake? The mobile cellular industry has witnessed a phenomenal growth in Pakistan during the last few years. One of the prime drivers of this growth has been a balanced cellular regulatory regime which facilitated not only growth of mobile services but also lowering of prices. It has also become extremely competitive since the introduction of two new cellular licenses in 2004. This growth has benefited all the stakeholders ââ¬â industry suppliers, mobile network operators, consumers and the government as well.
It is a matter of immense importance to measure the readiness for 3G in Pakistani market. Back in 2003, Japan and Australia were ranked as the two most 3G ready nations in the world, a global survey of 40 nations conducted by 3G & Wi-Fi Pacific showed.
The survey measured nations across eight different criteriaââ¬â existing cellular penetration, internet user penetration, purchasing power, technology spending as a percentage of GDP, size of commercial popular culture industry, daily commuting duration, degree of liberalisation and openness in 3G and Wi-Fi licensing. Pakistan was ranked 36 ahead of only Burma, Indonesia, Cambodia and Bangladesh.
After registering rises of over 100 per cent in both 2003-4 and 2004-5, Pakistanââ¬â¢s cellular penetration as of April 2006 stood at 21 per cent across the country. The fixed line penetration stood at 3.4 per cent. Despite the phenomenal success of the past two years, the future continues to look just as bright.
According to a Business Monitor Internationalââ¬â¢s report on 14 key Asia markets, Pakistan is expected to register annual average mobile penetration growth of 38.5 per cent between 2005-2010 and will achieve a penetration rate of 38 per cent by 2010.
Most of the developed markets introduced 3G when mobile teledensity levels had reached close to saturation and so there was little room for subscriber growth. In such developed markets, it was believed that growth needed to be sustained from new services and not from new subscribers. This is not yet the case for Pakistan where the market is not ready to approach saturation point even by 2010.
Indeed, the BMI report forecasts the number of 3G users by 2010 to be just 0.9 million. Such low forecasted figures will not enable equipment and terminal manufacturers, MNOs or content providers to realise economies of scale and offer affordable prices for a consumer.
In many developing markets, including Pakistan, where cellular teledensity rate is still low, voice and simple VAS services will continue to act as engines of growth for the next 3-4 years to achieve comparable penetration rates and coverage as was the case for developed markets before they embarked on 3G.
It is important to continue with the current highly successful government policy of maximising 2G service teledensity to levels similar to those achieved in other markets before 3G was introduced.
http://www.dawn.com/2006/10/09/ebr14.htm
By Zermenay Ata
THE mobile telecommunications industry is witnessing a period of robust and unprecedented global growth worldwide. The net result of this high-growth rate is that the mobile subscriber base has reached two billion users, surpassing the seemingly invincible fixed-line user base of 1.2 billion and by 2007, one in every three persons is expected to have a mobile phone.
Even now, around 450 million new handsets are being purchased every year. In certain parts of Europe and Asia, around 80 per cent of the population has a mobile phone.
While developed markets are getting saturated, developing countries like China, India, Indonesia, Pakistan and Vietnam, where mobile density is low, offer some of the highest annual growth rates and thus offer exciting opportunities for stakeholders to expand the business.
One of the most exciting of these opportunities is 3G services. As the debate for 3G is becoming stronger and stronger, it is important to know what is it and how much does the market show readiness for 3G?
As is well known, 3G uses a different range in the radio frequency spectrum to second generation (2G) mobile telephones providing a wider range of primarily data services. It(3G )delivers high-speed, always-on data connections to mobile terminals enabling mobile network operators(MNO) to offer a broad variety of new applications that are moving the 3G MNOs from being voice providers to data and multimedia service providers. In markets where mobile telephony is saturated, 3G is being introduced to overcome the declining revenue from voice services.
Letââ¬â¢s talk about the stakeholders in 3G and what is at stake? The mobile cellular industry has witnessed a phenomenal growth in Pakistan during the last few years. One of the prime drivers of this growth has been a balanced cellular regulatory regime which facilitated not only growth of mobile services but also lowering of prices. It has also become extremely competitive since the introduction of two new cellular licenses in 2004. This growth has benefited all the stakeholders ââ¬â industry suppliers, mobile network operators, consumers and the government as well.
It is a matter of immense importance to measure the readiness for 3G in Pakistani market. Back in 2003, Japan and Australia were ranked as the two most 3G ready nations in the world, a global survey of 40 nations conducted by 3G & Wi-Fi Pacific showed.
The survey measured nations across eight different criteriaââ¬â existing cellular penetration, internet user penetration, purchasing power, technology spending as a percentage of GDP, size of commercial popular culture industry, daily commuting duration, degree of liberalisation and openness in 3G and Wi-Fi licensing. Pakistan was ranked 36 ahead of only Burma, Indonesia, Cambodia and Bangladesh.
After registering rises of over 100 per cent in both 2003-4 and 2004-5, Pakistanââ¬â¢s cellular penetration as of April 2006 stood at 21 per cent across the country. The fixed line penetration stood at 3.4 per cent. Despite the phenomenal success of the past two years, the future continues to look just as bright.
According to a Business Monitor Internationalââ¬â¢s report on 14 key Asia markets, Pakistan is expected to register annual average mobile penetration growth of 38.5 per cent between 2005-2010 and will achieve a penetration rate of 38 per cent by 2010.
Most of the developed markets introduced 3G when mobile teledensity levels had reached close to saturation and so there was little room for subscriber growth. In such developed markets, it was believed that growth needed to be sustained from new services and not from new subscribers. This is not yet the case for Pakistan where the market is not ready to approach saturation point even by 2010.
Indeed, the BMI report forecasts the number of 3G users by 2010 to be just 0.9 million. Such low forecasted figures will not enable equipment and terminal manufacturers, MNOs or content providers to realise economies of scale and offer affordable prices for a consumer.
In many developing markets, including Pakistan, where cellular teledensity rate is still low, voice and simple VAS services will continue to act as engines of growth for the next 3-4 years to achieve comparable penetration rates and coverage as was the case for developed markets before they embarked on 3G.
It is important to continue with the current highly successful government policy of maximising 2G service teledensity to levels similar to those achieved in other markets before 3G was introduced.
http://www.dawn.com/2006/10/09/ebr14.htm
