Research Notes

GPRS is as little “Always On” as WAP was the “Mobile Internet”

what can Europe, the USA and Japan learn from this?
There are still only a few GPRS terminals in the hands of the mobile users and most of those users have had difficulty even configuring their new GPRS mobile phone – as they are not delivered pre-configured from the mobile operators. But those few that have now tried GPRS have realised that the GPRS slogan “Always On” is somewhat misleading for the GPRS mobile phones available on the market today.

When you are marketing new technology, one of the major hurdles is to get the potential customers for your new product to actually understand what it is you are offering. Most new technology has the problem that customers either feel they do not have the need for the new technology, or that they do not understand what the new technology can do for them and therefore do not understand why they should invest in it. Basically customers do not care about technology – they care about what personal benefits can be gained from the product.

One of the ways of marketing new technology is by comparing it to something customers already know, understand and have invested in. This is basically what has happened with GPRS. Some bright young marketing executive decided to use the Internet high-speed connection ADSL’s slogan “Always On” for GPRS! Not a bad idea maybe, as both can stay connected as long as you want and both are only billed for the data traffic – not the time you are connected. But in contrast to GPRS, ADSL has two rather important features that most GPRS mobile phones currently cannot offer:

ADSL is always on at the speed you have purchased you can make and receive phone calls, while using your ADSL connection

GPRS is a rather different ballgame and using the ADSL slogan is at the present actually not the best idea – if you do not want to disappoint your mobile customers.

The problem is that there are 3 different “classes” of GPRS – Class A, B and C – but only Class A GPRS telephones allow mobile users to be always on with GPRS and make and receive phone calls at the same time! With Class B phones, your GPRS session hopefully gets suspended when you talk and resumes afterwards, however there is no guarantee and with Class C, you have to switch between GPRS and voice manually. Most of the GPRS enabled mobile phones on sale today run Class B GPRS, but many advertisements do not actually state which class GPRS the phone is – so even if mobile consumers know about the 3 GPRS classes, they cannot see whether that mobile phone supports simultaneous voice and data!

But is does not stop there, with ADSL you know what speed you are surfing at, because it is the speed you bought from your ISP. With GPRS you have no idea what speed you are running, except that it is surprisingly slow! GPRS theoretically runs at a maximum speed of 171.2 Kb/s – well over the speed of double ISDN – but most users are actually only getting 20 – 30 Kb/s from their GPRS, definitely not “high speed”! Another problem is that mobile GPRS users are sharing mobile bandwidth, so you are not guaranteed any particular speed, but your connection speed will vary depending on the quality of your connection and how many other users are sharing the bandwidth at the same time!

There are two things the terminal manufactures and mobile operators can do to speed up the deployment of new GPRS enabled mobile phones:

Change the “Always on” slogan to for example “Easy Data Access”
Create new services for GPRS mobile phones

As most of today’s GPRS mobile phones are only Class B phones and do not support simultaneous voice and data, they should not be marketed using the slogan “Always On” – giving the impression that you are buying a mobile ADSL. Instead a slogan like “Easy Data Access” is a much more correct term – once you have managed to configure your GPRS mobile phone – because it is easy and only takes a few seconds to start a GPRS connection.

The other thing the mobile operators could do to help speed up the penetration of new GPRS terminals is to create a mass of content by offering the content providers good business and revenue sharing models, to help kick-start new mobile services.

The latest report from Strand Consult “How to make money on mobile services”
a picture of the current & future Market for Mobile Services in Europe shows that in 2005, non-voice ARPU (average revenue pr. user) will account for 32% of the mobile operators earnings and have a total value of Euro 23 billion. Of that, under 2 billion will come from SMS based mobile services and the rest from new technologies based on MMS/WAP and JAVA! The report takes into
account the mobile operators appalling marketing of GPRS and lack of revenue sharing models for new mobile services based on new technologies and goes through in detail, all the prerequisites from all the players in the mobile marketplace that need to be in place, before the mobile services market really can take off.

GPRS is a step in the right direction towards getting mobile consumers ready for UMTS. But right now, GPRS is comparable to the early Internet days when millions of people were using dial-up modems – that were difficult to configure – to access the Internet. The only reason so many millions of people accepted rather slow dial-up modems was that they wanted access to all the content on the Internet! GPRS is a fine start for faster and easier access to wireless mobile services – now all we need is some content!
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