Connected: The high price of GPRS

In the first of a fortnightly series, Antony Savvas uncovers the technology and management issues behind the big telecoms and...

In the first of a fortnightly series, Antony Savvas uncovers the technology and management issues behind the big telecoms and network stories of the day

If you're not a shareholder, you probably won't have taken much notice of Vodafone's latest results. But you really should do so, and here's why.

As Vodafone is the biggest mobile operator globally, the rise in its contract customers could be seen as a useful measure of whether companies are really doing much in the mobile data sector to boost efficiency and sales.

Unfortunately, the amount of money that Vodafone is making from Internet-related data is pitiful - only 1.1% of sales - and even this figure went down slightly compared with the corresponding financial period.

Internet-related data includes Web sites, databases, e-mail accounts and other applications downloaded using a mobile phone as a "bearer" modem in conjunction with a laptop or personal digital assistant (PDA).

So why are users holding back from making the most of Vodafone's 3G and GPRS networks? A key factor could be that unlike GSM systems which allowed users to download Internet-related data onto their laptops and pay for the service by the minute, BT Cellnet and Vodafone have introduced GPRS tariffs based not on time connected but by the amount of data downloaded and sent.

This has undoubtedly spooked some users who rightly feel that they can predict how long they need to be connected to the network, but are unable to budget in advance for the amount of data to be received or sent.

Certainly the operators deserve a premium for their GPRS services which are twice to
"If they haven't learnt the lessons from low take-up of GPRS so far, the step to 3G will be even steeper than first thought"
Antony Savvas
four times faster than traditional GSM networks. But companies need to plan for cost on a monthly basis and total data downloads by large numbers of staff are very hard to work out.

GPRS is here to stay no matter how little the operators are currently making from it, but given the small uptake so far by their commercial rivals, many companies will be wondering whether they need to worry about even faster 3G services.

Vodafone maintains that more data will be sent over GPRS networks in the near future with the arrival of GPRS phones equipped with multimedia messaging service (MMS). MMS allows quicker access to e-mail (without using a laptop or PDA), moving graphics, and music.

But here's the catch: Vodafone and the other operators still seem to be adamant that such data should be charged by its size rather than the time it takes to download it.

If they haven't learnt the lessons from low take-up of GPRS so far, the step to 3G will be even steeper than first thought, and companies wondering on whether they will be missing out on something big by not now planning for 3G will probably be few and far between.

Billing issues must be resolved before suppliers can expect customers to be happy to use next-generation mobile Internet services. Without a simple and fair paying scheme, users should steer clear of this technology.

What do you think?
Does the pay-by-volume approach put you off GPRS and 3G?> Let us know with an e-mail.>>
CW360.com reserves the right to edit and publish answers on the Web site. Please state if your answer is not for publication

Antony Savvas
is an independent observer and commentator on the telecoms and IT industries.
This was last published in August 2002

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