SYDNEY — Consumer confusion over the benefits of wireless data technologies remains a major stumbling block as carriers up their investment in 3G networks, market research firm APT Strategies warned this week.
Despite the strong penetration of mobile phones in the Australian market – with nearly half as many phones as people in the country – a large proportion of users are still having trouble taking the step from the voice into the data world. In APT Strategies’ survey of 1000 mobile phone owners, just 55 percent understood the difference between WAP (wireless application protocol) and SMS (short message service), suggesting that carriers have not done enough to elucidate the comparable benefits of the two.
Querying users as to why they didn’t use WAP, APT Strategies found that 42 percent of respondents didn’t even know it was available, whilst a further 39 percent felt they had no use for WAP. Some 36 percent of those surveyed were still sitting on the fence when it came to WAP, responding that they were neither likely or unlikely to upgrade their phones to a WAP-capable model.
Greg van Mourik, Telstra OnAir’s general manager of wireless multimedia, concedes WAP is still at the base of the mobile data learning curve but says a concerted focus on educating users about mobile data applications will boost customer usage and awareness in the long term.
“It’s not a simple change to create in the marketplace,” he says. “Carriers and providers of online services all have a big job to do if we’re going to achieve the kind of future we want. The point is that this isn’t a one-shot exercise where you do something in a month and it either works or it doesn’t; it’s an evolution and a series of things that has to be done over time. The conversation in the market should not be about WAP or SMS; it should be about the potential for customers to be able to do things differently to how they’ve done them today.”
Despite the torrential success of SMS since inter-carrier communications was introduced just over a year ago, even that technology seems to have been taken up as a matter of convenience more than of priority. Seventy percent of APT respondents said they use SMS because it’s included in their mobile phone rate plan; just 42 percent cited cost as a factor, 37% like SMS because they don’t have to talk to anyone, and just 25% use SMS for its reliability.
Marc Phillips, APT Strategies’ chief analyst of Australian telecommunications, believes the company’s research will mean a longer-than-expected return on the $1 billion poured into the March 3G auction by the six winning bidders. “With more than one third of respondents ‘neither likely or unlikely’ to upgrade their mobile phone in the next 12 months to access the Internet or use WAP,” he said in a statement, “Australian telecommunications carriers must pursue innovative advertising and marketing strategies to improve take up rates of next generation handsets, particularly as they increase financing relationships with handset vendors.”
Emerging uncertainties as to the potential revenues from 2.5G and 3G networks continue to change major players’ strategic investments in wireless technology, with Telecom NZ subsidiary AAPT announcing on Thursday that it would shut down the rollout of the 2.5G CDMA network on which it has already spent $125 million. The decision, based on what the company only called changes in the local mobile market, suggests a short future for CDMA technology, currently only available commercially from Hutchison Telecommunications venture Orange.
Rather, carriers may be seeking to avoid market redundancy, customer confusion and unnecessary spending by instead redoubling their efforts on 3G technology. This week, Hutchison head Barry Roberts-Thomson confirmed that the company was looking for equity partners to support the planned $1 billion build-out of its 3G network.
To be underwritten by Hutchison’s Hong Kong-based parent company Hutchison Whampoa, the rollout will introduce another new brand into the Australian market after its Orange service fell short of targets to have 100,000 subscribers by the end of last year. Partners for the 3G rollout are still to be determined, but iTnews says an announcement about a possible alliance with Telecom New Zealand could be made as soon as May 11, when quarterly results are announced.
