Mobile broadband services have finally arrived. Three years after the US$120bn third-generation (3G) spectrum licensing frenzy that almost destroyed Europe's telecom sector, cellphone operators are starting to offer fast 3G broadband services
Both MTN and Vodacom, which were fortunate not to be lumbered with onerous spectrum frequency charges, are testing 3G in SA. They have promised limited consumer and corporate services by Christmas. Third cellular phone operator Cell C is also starting to enter the fray with an interim (2,5G) offering. Though contract customers are limited in number, Cell C will increasingly provide competition and, hopefully, help to drive down costs for mobile data.
For consumers, the promise of 3G is that the Internet will now truly be unplugged. 3G promises efficient data connections at speeds of up to 2 Mbit/s - 36 times faster than a standard dial-up connection.
3G also promises a host of sexy multimedia services. The cellphone now becomes a video phone. Or if you are at the airport waiting for a plane, you can listen to your favourite radio station, watch a video or a live sport event, and even link into the web cam monitoring your child at crèche. There are many other enticing applications such as online gaming, photo messaging, and video conferencing.
But the latest mobile broadband hype cannot obscure nagging concerns. Handsets are the biggest inhibitor to introducing 3G. There's limited variety of 3G phones, which means the cost of those handsets are high (about euro 400- euro 700 in Europe). Other problems are that 3G phones have a short battery life and tend to be chunky.
But this should improve by year-end, as European and Far Eastern handset manufactures ramp up production for Christmas sales.
Locally, a big challenge is the high cost of mobile data for older standards such as general packet radio service (GPRS) and short message service (SMS). Says Migal van As, CEO of specialist software developer Intervate: "The costs of using GPRS and SMS services are ridiculously expensive compared with Europe." Van As says that in the UK Orange charges £20 (R230) for 65 MB of data traffic, but Vodacom offers 10 MB for R200 and MTN 15 MB for R263.
Another drawback is Telkom's monopoly of the backbone, transmission network. "We need bigger pipes from our base stations to our switches to carry the increased load of data. The current price of those links is too high," says MTN chief technical officer Karel Piennaar.
Both MTN and Vodacom have indicated that 3G will only be available in the main metropolitan areas and holiday spots. Down the national routes, a cheaper, slower, wireless technology called Edge (short for enhanced data rates for GSM evolution) will be used. (Edge increases data throughput of GPRS threefold to 384 Kb/s.)
Gaining new data subscribers is not easy. It's worth highlighting the experience of Hutchinson's 3G offering in the UK. In the scramble to sign up customers, 3, as the network is known, resorted to giving away handsets and slashing voice tariffs by up to 50% below rivals on traditional cellphone networks.
Operators downplay concerns and many have set up Wi-Fi (wireless Internet) hotspots to allow mobile phone users to link into cheaper wireless local area networks when they are in their offices or in public areas such as hotels, airports, train stations and restaurants. In SA, cellphone firms are investigating interconnection with Wi-Fi hotspots.
The costs of a permanent 3G licence in SA are an annual basic fee of R5m and then a further R100 000/megahertz. Vodacom Group CEO Alan Knott-Craig recently noted that this is a fraction of vast sums paid by European operators.
Group chief operating officer Pieter Uys says Vodacom will spend more than R200m this year upgrading parts of its network to provide 3G and Edge. With the introduction of 3G, tariffs will be revised. Uys says users will "contend for" peak speeds of 384 Kb/s and on average attain 256 Kb/s. "We should see speeds increase at least 2 Mb/s in the next two years."
Also, mobile 3G is not happening in a vacuum. Sentech's MyWireless "fixed wireless" (not mobile) offering is being taken up by small businesses and home users countrywide and black-owned private sector firm Wireless Broadband Networks is expected to enter the fray early next year with its own super fast wireless broadband service.
But as handheld computers and "smart phones" (which include software operating systems) proliferate so risks of viruses and spam increase. The danger is that as mobile gadgets link to corporate networks, they could bypass security mechanisms and open back doors for hackers, warns Patrick Evans, Symantec's regional manager for Africa. However, security measures can be put in place. "It can be done. Symantec has 2 000 people on the move and we have implemented measures. You need best practices. Anti-virus software is not enough," says Evans. He says Symantec is working on anti-virus, intrusion detection and firewall products for mobile users.
Despite the challenges, wireless broadband is set to rule. By end of last year there were 1,3bn cellphone users worldwide compared with 600m Internet-connected PCs. Of these about 700m cellphones were able to connect to the Internet.
Now it's up to the operators and their technology and content partners to provide affordable services that consumers want and will pay for.
