As the mobile industry gathers in Cannes to stage the annual 3GSM World Congress next week, the burning question is, when will third-generation mobile services be ready for business?
The delivery of 3G data services has been a key topic at the congress for the past five years, although the "3" was only added to the show's name a year ago when the first commercial 3G networks appeared.
Hutchison's 3 is still the only 3G network available in the UK. The 3GSM organisers have to stage an event that speaks both to the consumer and business mobile data market, although in the case of 3G, it could be argued that neither market has been properly addressed yet in the UK.
This is reflected by the fact that Hutchison concentrates its marketing on low-cost voice-call packages and video clips of football matches people can see on ITV on Saturday night, Sunday morning and Monday night.
If the bandwidth that 3G can offer (theoretically up to 2mbps, but more realistically 384kbps) becomes available to business, one would assume that someone will use it, but analysts are unsure about the demand. Mark Blowers, senior research analyst at Butler Group, said, "There is very slow progress in convincing businesses about the need to upgrade to 3G. Companies do not just want a new technology, they want a competitive edge."
The telco industry appears to be at odds with the requirements of business users, according to Blowers. "There is a lot of talk about the requirement for more quality content for 3G, but for business this is not an issue." He said business users require connectivity and applications. If 3G is going to be a meaningful stepping-stone for business from the GPRS (General Packet Radio Services) or "2.5G" services already available, Blowers believes 3G will have to offer high speeds to deliver services such as videoconferencing.
Operators are still ironing out coverage problems and seamless roaming between 3G and GPRS to offer data services when a 3G service is not available. "I would say that there will not be a comprehensive and fully developed 3G service in the UK for about five years, so I do not see imminent widespread adoption of 3G among businesses," Blowers said.
Among the problems 3G faces in the business community is the popularity of devices such as Research In Motion's Blackberry, which relies on GPRS networks. This became commercially available in the US about five years ago but struggled to find a UK operator to support it until O2 took it up two years ago. Offering instant e-mail, calendar, and contact synchronisation with corporate mail servers, it has become a popular communications tool for companies with employees who prefer a simple handheld e-mail access device to a heavy laptop.
By last November, RIM said it had sold 17,000 Blackberry Enterprise Servers globally, 20% outside the US. The company said the reason for this popularity was the Blackberry's basic function. Richard Harvey, a partner at City law firm Richards Butler and a Blackberry user, said, "The Blackberry brings together all the diary and laptop functionality I need on the move.
"Working as a shipping lawyer in maritime casualties, I find myself in situations where circumstances are changing globally minute by minute. The Blackberry provides a way to receive e-mails in real-time and I can respond to them wherever I am," he said.
The success of the Blackberry, along with more modest take-up of other GPRS-based devices such as the XDA personal digital assistant with integrated phone, will tempt operators to continue to promote GPRS over 3G for some time to come.
Vodafone, although enjoying an increase in data revenues through its Vodafone Live GPRS service, is starting trials of a data-only 3G service for laptops, which it claims could serve 30% of the population.
A commercial launch for Vodafone's service is promised in the spring. It will enable users in London, Manchester, Birmingham and other built-up areas to access a 3G network using a laptop card for data services.
The speed offered will be about 384kbps, and when users cannot access 3G, they will be able to get GPRS access instead, probably at anything between 20kbps and 40kbps.
But corporates do not appear to be demanding 3G services. Jaye Isherwood, product manager for mobile solutions at Cap Gemini Ernst & Young, said, "GPRS is delivering all our requirements in the products we offer." She said Cap Gemini's 70 mobile references in Europe all relied on GPRS, but that 3G may find a niche within healthcare. "The only applications that may need 3G in the business world are probably in the health sector, where users may need to send and receive high resolution images such as x-rays," she said.
As well as GPRS, 3G had to provide a viable alternative to Wi-Fi based on the 802.11b wireless Lan standard. Such networks were increasingly being built outside campus areas to allow users to connect pervasively to the internet in built-up areas. For instance, Cap Gemini has built such a Wi-Fi network from the Gare Du Nord train station in Paris along a route taking in cafes, restaurants and other buildings offering public access.
Given that 3G is basically mobile broadband, Michelle de Lussanet, senior analyst for Forrester Europe, mobile telecoms, said not all applications need 3G. "You do not need the same level of bandwidth for mobile applications as you do with fixed applications," she said.
However, there are some applications that could use 3G, such as security cameras linked to mobile phones and telematics, which involve machines talking to each other over a mobile network. "But we will not see much demand for 3G until the end of the decade," said de Lussanet.
Forrester has predicted that only 1% of all European users will have a 3G handset this year, and it will take until 2008 before 20% of European mobile users are running 3G. By this time, 75% of the population will be established GPRS users.