Vodafone has formally rolled out its 3G mobile
communication products and services in Europe and
Japan.
The company forecasts that more than 10 million customers will
be using its Vodafone Live portal with 3G services by March
2006.
"Our rough estimate is that the 3G service will be used by 10%
of our base within the next 15 months," said Vodafone chief
executive Arun Sarin.
After making a massive investment in 3G, including £16.6bn on
spectrum licences four years ago, Vodafone is eager to see returns.
Competitors like Orange and T-Mobile have taken a more cautious
approach with their 3G services, which are expected by the end of
the year. Overall, Europe's major mobile phone operators have spent
more than £70bn on 3G licences.
Vodafone is presenting 3G as an enhancement to its existing
Vodafone Live portal and is promoting 10 new 3G handsets (seven of
them exclusive to Vodafone) and services such as video calling, 3D
arcade games, mobile TV and music downloads as part of the portal.
Sarin said the 3G phones would be able to roam between Vodafone's
European markets and Japan.
Vodafone has altered its pricing model for the 3G service, with
users charged for individual content purchases rather than
according to volume. Browsing will be free or included in a bundle
of services.
Vodafone UK chief executive Bill Morrow said 3G pricing would
include two basic packages. The £40 a month bundle offers 500
minutes of voice calls, 100 text messages, 50 minutes of video
calls and 60p for sending a pre-recorded video message. The £60 a
month bundle offer more of the same - 1,000 minutes of voice calls,
for example.
According to Ovum analysts John Delaney and Dario Betti, the
offer of a prepay option at launch, in addition to the contract
tariffs, will help encourage first-time users to the service. They
also praised the company's decision to charge users for the content
itself, as opposed to the time it takes to find and download the
content, which they believe will appeal to users and shake up
business models.
Vodafone wants new revenue-sharing deals with its content
providers, to "partly offset" the lost traffic revenues, Delaney
and Betti said other operators would undoubtedly follow Vodafone's
lead.
But they warned that Vodafone's decision to target its coverage
area within heavily populated areas could prove risky if its 3G
services turned out not to be robust enough to cover such a large
segment at launch.
Delaney and Betti warned that Vodafone risked annoying the
customers it could least afford to lose if services weren't
accessible.
Sarin brushed off these concerns. "We have been in this business
for 20 years and are confident in CDMA, the core technology that is
being used here. We're not expecting any roadblocks in being able
to power through and provide for our target market."
That market is primarily the consumer market, but Sarin added
that there were plenty of 3G services, such as video calling, that
the enterprise market would find appealing.
Laura Rohde writes for IDG News Service