Delegates fail to spy near-time 'killer app' looming on 3G horizon

Participants at yesterday's Wireless World 2002 conference failed to agree on the nature of the 'killer application' for third-generation (3G) wireless networks.

With the promise of vastly greater data speeds, 3G also entails high levels of investment in networks and licences. Some of the speakers speculated speed and mobility would be key, while others put their bets on applications popular on the wired Internet - e-mail and information access.

Some were sceptical of a magical new service appearing which would woo the unconverted into switching over from existing services.

HSBC head of telecommunications, media and technology investment banking Cecilia Melin said many people owning phones capable of receiving faster data transmissions did not even switch on the general packet radio service function.

IDC Singapore communications group research manager Gary Hong saw potential for success in such categories as enterprise applications for businesses.

'I think you will not see any single killer application. It will be more of a suite of applications,' Mr Hong said.

Still, applications came second on the list of ingredients necessary for a successful 3G service when market research firm Taylor Nelson Sofres surveyed almost 200 participants at last month's 3G World Congress in Hong Kong.

Industry insiders named reasonable pricing as the most important element, while handsets, networks and government policies were ranked third to fifth.

Regional director for telecoms and technology Chan Chi-wing said: 'They're clearly thinking the applications are important.'

Mr Chan suggested consumers would be willing to pay a premium for convenience and mobility.

'That's what they buy. They don't buy applications,' he said.

Four 3G licences have been issued in Hong Kong, and service providers may launch as early as the end of this year. Ms Melin said some regional operators were aiming for as much as 40 per cent of their revenues to come from data services. To achieve that target would require paid content services.

Hong Kong's six mobile operators derive 3 per cent to 5 per cent of their revenues from data, while the rest comes from voice traffic.

On the standards front, Hong Kong University of Science and Technology assistant professor and a visiting International Telecommunications Union researcher, Xu Yan, said China would be testing its time division synchronous code-division multiple access (TD-SCDMA) standard until next summer.

TD-SCDMA is being pushed by China as a third global standard for 3G, in addition to those developed in Europe and North America.

'It's still in the labs. We don't know what the results will be. If they are not very good, China cannot be idle,' he said, meaning it will probably have to go ahead with one or both of the other standards. Most industry observers believe that China will use at least two standards for its 3G networks.

Most Wireless World speakers agreed Asia would use a mix of 3G standards and that interoperability between networks will have to be worked out. Further down the line, many believe handsets will be able to pick up signals from different networks, but the first models in the market would probably be single-mode.

Network operators in places such as Japan, South Korea and Hong Kong are promoting investment in 3G, but a number of other countries are still on the sidelines.

Ms Melin says many are facing the difficult decision of whether to remain conservative utilities which generate cash and pay dividends, or to invest in more risky new data services.

With Telstra of Australia last week announcing it would buy the remaining 45 per cent of Pacific Century CyberWorks' mobile arm CSL there is speculation of more international consolidation.

Telekom Malaysia has made a bid for local rival Technology Resources Industries. Hong Kong's Sunday Communications has mobile stakes in India, and Hutchison Telecom as well as Singapore Telecommunications have regional investment interests.