3G is 'rocket science', says analyst

Meeting users' expectations of upcoming third-generation (3G) services, and having the right infrastructure, will be gargantuan tasks for mobile companies, according to analyst firm Ovum.

Speaking at IBM's Network Innovations Lab in Nice, Neil Ward-Dutton, research director at Ovum, said that issues such as working out the type of services and platforms 3G operators would offer quickly and easily would "keep chief executives awake at night worrying".

"There are many important infrastructure qualities needed for 3G, but there are few capable providers," he added. "Doing all this really is rocket science."

The complexities caused by making money out of 3G services means that the licence holders will have to change their business models to adapt to the new terrain.

Ward-Dutton explained that mobile operators are caught between two worlds: the old one where voice revenue was declining due to competitive price pressure and decreasing returns from new customers; and the new where users have high expectations about what services they can get from 3G.

"People are expecting the same quality of service from a next-generation phone as they would get from their PCs today," said Jin Lee, IBM's vice president of business innovations services.

Ward-Dutton warned operators that 3G growth had to come from services but that voice will still have a strong role. "It is not going to go away," he said.

He also pointed to the success of Japan's NTT DoCoMo in rolling out a platform where it acted as a broker between content and service providers and end users.

But to make a success of 3G, Ward-Dutton warned that operators would need to implement their platforms as allowed by finances and the market for new services.