3G Multimedia

We summarize here our two-year multiclient study on the next generation of mobile communications—3G mobile multimedia. The study provides a dynamic view of the business prospects for 3G mobile services. It does so through a series of three releases, presenting the evolving findings of our research and consulting integration. Each release covers key European, U.S., and Asian markets and licensing developments. Each also evaluates alternative 3G business models and listens to what end users have to say.

The major components of the study are:

• Business Models of Alternative 3G Deployment Strategies
• Lead Markets Analysis, Including Regulatory Frameworks and Market Forecasts
• Small Business and Multinational Corporate User Surveys (Asia, Europe, US)

Each of these is separately described on our site.

The final report of the study, Release 3.0, has been completed and is available now. A detailed outline of this Release is included at Report Outline.

For an overview of the study's results, project team and selected subscribers, see Summary below.

For a copy at no charge of the prospectus for the study, please e-mail your request to info@kalbainternational.com or fax us at +1 (781) 259-1460.

Summary

The 3G Mobile Multimedia Study provides a comprehensive analysis of the market, business and regulatory dimensions of 3G development worldwide. The study ran over two years, benefited from executive and user interviews on five continents, and cost in excess of $1 million. It is available to subscribers for a small fraction of this amount.

The study team was led by Dr. Kas Kalba, President, Kalba International, Inc., and included senior members with extensive experience in the cellular, Internet and content provision industries as well as technology and service innovation backgrounds.

Among the companies and organizations that have subscribed to 3G Mobile Multimedia are AT Kearney, BellSouth, BT, France Telecom, KPN Mobile, LG Telecom, Mobilkom Austria, Motorola, Sonera, Telestyrelsen (Sweden), and Vivendi.

Some of the highlights of the study include:

• Business case comparisons of "aggressive" and "conservative" strategies for developing 3G networks and services.
  
  The comparisons are based on our interviews with numerous 3G and 2G operators and other industry players in France, Germany, Spain, the United Kingdom and elsewhere, focusing on the effects of high auction fees on 3G deployment strategies. Release 3.0 addresses head on—arguably with surprising results—whether it is better to achieve broad coverage and target a broad subscriber base early in the deployment cycle or to proceed in a more deliberate, phased manner. Our model is calibrated for a medium-size country or equivalent region of a large country.


• Comprehensive review of 3G market potential, regulatory frameworks, and auction or beauty contest results in 12 key world markets.
  
  Our analysis comes not only from "desk research" but from direct involvement in auction and license bid assignments—for example, in Italy where we projected the withdrawal of Blu during two mock auctions and in Hong Kong where we have evaluated the viability of MVNO entrants as called for by the regulator (OFTA). Our previous experience in helping governments prepare license tenders and frameworks is also an important ingredient of Release 3.0. Among the countries for which we provide 3G subscriber forecasts and market reviews (cellular, Internet, wireless data, etc.) are China, Finland, France, Germany, Japan, South Korea and United States.


• Comparison of survey findings on willingness-to-pay, applications requirements, and many other facets of 3G multimedia adoption.
  
  Our user surveys covered multinational executives at companies such as America Express, Cathay Pacific, Hewlett Packard and Royal Dutch Shell as well as small business owners and managers in Singapore, United Kingdom, and United States. A key finding was that most respondents expect telephone companies and mobile operators to be their mobile multimedia purveyors and not content providers or ISPs. Willingness-to-pay results are presented for alternative transmission speeds. Significant geographical variations are also provided.


• Analysis of the impact of high auction fees—or equivalent fixed license fees—on 3G business viability.
  
  In a word, the impact is dramatic. We not only quantify it but also draw the implications for operators, equipment vendors and governments. In the last instance, we spell out specific regulatory and economic measures that need to be undertaken if the momentum of 3G market development is to be regained. We also outline what operators—aggressive and conservative—are looking for from equipment vendors in the post-U.K. auction environment. (Beyond a universal interest in low prices, there are important differences among operators in terms of other decision criteria, such as advanced applications, interoperability, local support, time to market, etc.)

Release 3.0 offers detailed forecasts of 3G subscribers in ten key countries, covering multiple products, and projects subscriber ARPU from basic services, new applications and third-party resources (advertising, transactions) as well as interconnection fees.