WiFi To Defeat 3G? 3G To Kill Broadband?

An article in the Independent looks at a theme we covered several times on PSFK - the concept that WiFi could have a huge negative impact on mobile phone carriers and their attempts to promote their next generation service, 3G.

Nokia’s latest N-series phones are WiFi enabled and the along the Independent argues that together with rival devices from companies such as SonyEricsson and Samsung, these handsets could prevent the operators ever seeing a return on the £22.5bn they spent on their 3G licenses six years ago.

For executives such as Anssi Vanjoki, the head of Nokia’s multi-media division, the latest phones are about putting the consumer, not the operator, in the driving seat. Some features, such as the wireless networking (WiFi) built in to almost all of Nokia’s multimedia range, will erode the network operators’ income. Owners of the phones can use a free WiFi connection at home, in the office or in a hotspot to share their video clips and photos, rather than paying to send them via 3G.

A look at how subscribers are actually using 3G makes for grim reading. Some of the 3G services that have been a success, such as laptop data cards for business users, are generic and face competition from other networks, such as WiFi and WiMax.

Other services have a similarly limited appeal. At the World Telemedia conference in Berlin last week, M:Metrics, a market research company specialising in the mobile industry, revealed that just one in 10 mobile phone users in the UK and Germany have downloaded content of any sort - paid for or free - to their handsets.

Meanwhile, T Mobile have been taking further steps towards replacing the landline - both for voice calls and broadband data services. T Mobile plan to introduce a wireless broadband service using 3G for $15 in the UK. Mobile Mentalism comments:

T-Mobile have noticed that younger users of phones rely so heavily on their mobiles, they rarely use landlines, except for high speed data access via broadband. Sensing a change in consumer behaviour, T-Mobile are positioning themselves to take advantage of the increasing number of households that are dispensing with landlines altogether. With HSDPA, 3G speeds are more than a match for home broadband connections, and at just £8.50 per month, the total service is actually cheaper than the combined land-line voice and broadband rate charged by the telcos. With this new service, there’s no reason to keep a landline, even for high speed data access.

Independent Online Edition
Mobile Mentalism