By Peter Cochrane, 2 June 2005 15:00
COMMENT The Science Museum, London, UK
I just had a meeting with a group of young people who brought back a flood of memories from the 60s, 70s, 80s and 90s, when the UK population wanted commercial radio but the government of the day was wed to a BBC-only world. This resulted in offshore radio stations on trawlers 'illegally' transmitting commercial radio. The government and regulators were outraged, whilst the public and advertisers were delighted. The outcome? Commercial radio was legalised. Public action and opinion won the day!
Next the UK population wanted Citizen Band radio but the government and regulators of the day were wed to strict control. So the public started shipping in and using 'illegal' equipment from the US. The outcome? A de facto Citizen Band was established that ultimately had to be legalised. Again public action and opinion won the day!
During the same era the UK government demanded that all car radios be licensed. But the public refused and in a legal battle reminiscent of today's RIAA MP3 file-sharing wars, people were prosecuted for non-payment. The outcome? So many people refused to pay that the system collapsed and the government had to relent - and make all car and portable radios exempt. The power of public action won again!
Today that history looks all so quaint and the battles so unnecessary, just like the censorship of the works of DH Lawrence et al. Relaxing the controlling regimes has instead seen a flourishing of creativity and technology that no one predicted 50 or even 20 years ago. And yet we still have industries and governments trying to dictate, trying to control and trying to limit what we can and cannot do. A long time ago I decided that all such attempts were futile and my approach to technology has been to give it to the users and stand back to just observe what they do. It is the only satisfactory model I have found for getting business models right.
As my friend Alan Kay (he's ex-Apple) often remarks: "The best way to predict the future is to build it."
It was on this premise that I approached the prospect of 3G mobile systems through the mid to late 90s, right up to the UK licensing and rollout fiasco of the year 2000 and beyond. Despite the protestations of many including myself, the industry was raped of billions of pounds by government, over 250,000 jobs were lost, the technology was more than three years late, operators didn't share base station sites, there were no significant service offerings beyond those that had already failed during the WAP fiasco and costs were wholly uneconomic for individuals and companies.
As it turned out, the much celebrated '2Mbps to your handset' never happened and customers don't surf the web, send photographs or engage in videoconferencing via mobiles. In short, industry over-promised and under-delivered. If only government, regulators and industry had concentrated on the customers how different it might have been!
So here I am with a group of youngsters with their Swiss Army Knife mobile phones - i.e. they do absolutely everything imaginable but badly.
What do they do with them? In order of popularity it seems to go like this: text, talk, ring tones, pics, music and movies. I can hear the mobile executives salivating from here! Surely we can make lots of money out of ring tones, pics, music and movies - can't we? Sorry but no! Text is cheap and the primary user mode. Voice is used but only if you really have to. And the rest are mainly done offline using a USB cord or Bluetooth.
Then of course there is BlueJacking - sending messages and pics to people across a room at random or by design, mobile-to-mobile. Fun, eh? Lots of megabits being moved around but not over the mobile network.
My prediction: 3G will continue to limp along with the lukewarm support of an indifferent customer base and an industry trying to recover its sunk network and licence costs for a decade or more.
As for watching TV and movies over the mobile network, will people do it and will the industry make money? I might be wrong but my advice to the industry is: don't hold your breath! Pocket-sized full-colour TV sets have been available for years at less than $100 and don't sell in large numbers. On second thought, praying might be a safer bet than holding your breath.
Contrast all of this with the DIY world of Wi-Fi and VoIP, where the customers established the need and have largely funded the rollout. Interestingly this prospect was identified and proven probably as early as 1996 but the mobile and fixed operators had their sights firmly fixed on extracting an extra $1000 a year from every household in the land with a raft of new technologies and a questionable list of improbable services. Just where was the money supposed to come from?
Well, watch out for 4G, 5G, 6G etc... it is time to watch the users and the technology again!
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Comments
There are 7 comments. Join the discussion
1. Knut Boehnert
Rollout too late? I don't think so - more too early than too late.
The industry intended application for the bandwidth (movie etc) are just not what customers want to do with it. Therefore the service is not used.
3G has the bandwidth that nobody needs today. And it offers nothing like a killer application.
Back when mobiles were the hype of the decade this offered communication on the move - something that wasn't there before.
My communication is covered by mobile, email, fixed lines and internet - I have no need for more mobile bandwidth.
3G is an opportunity for some entrepeneur to happen in future. Until then the industry will make loss.
2. anonymous
Much common sense as always. One glaring error though. The mobile operators were not "raped" by government. In France, Martin Bouygues, whose primary business is construction, opted out of the French auction - the "old economy" businessman sussed that the price of the licences was too high. The "new economy" businessmen certainly overpaid for their licences, but the governent was not to blame.
3. Antony Norris
I agree with anonymous, the Government put it up for auction, and like any mug punter on ebay the mobile networks paid too much. Greed and bad business sense sunk 3G.
One other incidental point, as far as I know there still hasn't been released a PDA style phone that uses 3G. Now stop me if I'm wrong but trying to use broadband on a normal phone screen is rather pointless apart from the gimicky video phone.
Peter can you clear up a point I've pondered, was it BT who tried the home video phone in the 90's, which died a death. And did you have anything to do with it? ;)
4. anonymous
Dear Peter
Back in the early 90s I attended a conference at which it was pointed out that consumers were reluctant to pay more than $2 per hour for their entertainment. Any price above this would be a niche market. If the industry wants 3G apps to take off, they have to be able to meet that sort of price point. Whether they can make a decent return on the investment needed to support the bandwidth required by massed video usage I don't know
5. Bob Leschhorn
The government is not to blame for the extortionate license fees. The seeming irreality and greed of the mobile operators is to blame. Why didn't they do a quick calculation on the back of an envelope? 23 billion (9 zeros) in license fees + about 10-15 billion in infrastructure costs means an implementation cost of about £500 or more for every man, woman and child in this country. How did they expect to recover this? 3G? Remember Iridium?
6. Aleks
What is Peter trying to say? That 3G will never take off? He might be right but his argument is strange as all the example he gives are wrong:
SMS is the most profitable part of the mobile business - despite being much more expensive than voice.
There are more pirate radio stations now than there ever were in the Sixties. Has the government responded with hundreds of commercial minority stations? No.
CB radio was a fad that went away
The car radio licence income was just added to the TV licence. Hardly "people power".
The reason pocket sized TVs aren't popular is because the picture is poor. It's not the idea that failed but the execution. We'd all have them in our cars if the picture was better and it wasn't illegal.
Also remember that some technologies are slow burners:
* SMS took forever to pick up
* Satellite was a gamble, lots of people lost money. But now...
* Digital terrestrial TV completely bombed until the Beeb stepped in.
* Irridium phones are now selling.
The reason 3G hasn't taken off yet is that the coverage is patchy, the software is flaky and the costs are too high. Something may come along soon that's better, or 3G will finally get it together - leaving a few bankrupt companies in its wake.
7. Neil Owen
I think Mobile TV will happen in a big way but it will not be a function of the technology but the content. To be sucessful it will be a unique extension to existing consumer entertainment - an exclusive insight from Big Brother or 24 for instance. As with all the profitable mobile applications it is the clever bundle of charges, features, marketing etc. that wins out. The question is will it arrive at your handset via 3G or one of the other emerging technologies like DVB-H.