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Apr 03

3 Australia

3G services launched in Australia (well, two cities in Australia) with the arrival of Orange’s “3 Australia“. From a cursory look at what it offers, I’ve formed an opinion (that may not be all that well informed) that this new technology seems to be already plagued by two major problems that will impede its diffusion and adoption. One of the major marketing pushes of 3G networks is the ability to make video phone calls. Technology for the “modern” videophone has been around 1964, but practical considerations and lack of demand have not seen them become a common household object. Video conferencing is only starting to gain acceptance and use in the corporate world. However, I cannot see how video calls on mobile phones can be a major driver in the adoption of 3G technologies, apart from the initial gadget “wow” factor, which is in turn offset by the current affordability of 3G which I’ll look at in a moment. In terms of benefits of video calls, the ability to see someone while conversing implies a richer communications medium, due to the additional non-verbal cues of body language and facial expression and so on. When you are speaking to someone on a one or two inch screen, how much richer is that communication honestly going to be? Is it a novelty or truly useful? Add to this the inconvenience of having to look at who you are talking to whilst on the mobile, and you’ll not be so mobile if you want to talk on the run. Naturally you can choose to fall back to normal voice-only calls, but arguably you’d be doing that a fair bit, which defeats the purpose of video calls being a “main driver” for 3G technology adoption. Furthermore, there’s the social factor of not only you being able to see who you’re speaking to, but everyone else seeing who you’re speaking to, which can lead to reluctance to use this technology in public. Hence, usage is further reduced. Perhaps this will be something people get over as time allows society to adjust (in much the same way that mobile phones are commonplace, and PDAs are not beginning to raise as many eyebrows on public transport as they used to). Societal reaction will play a large part in all of this.

You may be whining about broadband caps now, but when Telstra Big Pond first arrived with cable about 5 years ago, access costs were $50 for the first 100MB and 17c per megabyte thereafter (or something of that magnitude – it was quite ridiculous). I, on my 28.8k dialup connection, was pulling through up to 5GB a month for about $50 a month. No one but the rich cared that they could download at 300kb/sec, because the fact was that you could tear through that in ten minutes and then the fun would be over. Then Optus arrived. In a similar vein, 3G boasts a large increase in wireless mobile bandwidth, opening up the door for all sorts of applications. However, when costs are charged at cents per kilobyte, costs become a major concern for the consumer. So whilst they may take comfort in the fact that the technology is available to them, if they don’t use it it’s little point. I can count on one hand the number of times I’ve used WAP on my phone.

All this is not to say that I don’t think 3G is a bad thing. I applaud the quick development of 3G infrastructure in Australia by Hutchison/Orange, and recognise they need to recoop their extensive outlays. I’m of the mindset that you should build technology infrastructure with expandable capacity to be utilised in future, rather than reacting to the demands of the underlying uses of the technology (software and the like), especially as the underlying uses are part of an industry that expands so rapidly in its demands. However, with such a pricing scheme, I cannot see 3G taking off in the next few years, and a failure by 3 Australia in 3G may have negative consequences in terms of inducing the other mobile carriers to hesitate. In this regard, competition is terrific for consumers, especially in the diffusion of the technology. Further hampering efforts are that the Australian telecommunications industry is not well known for its competition producing vastly lower prices (our cable and ADSL caps must be among the lowest in the world).