Status of Wireless Service Business Today

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Helsinki, 1 September, 2004 — Status of Wireless Service Business Today

For business actors in the wireless field, the 3G (Third Generation) networks create new revenue opportunities by enabling fast and efficient delivery of personalised end-user services, i.e. services delivered to end-users via wireless terminals.

3G networks enable better use of bandwidth and different parts of the frequency spectrum, and for this reason, packet charges for 3G services are lower than in 2G networks. The UMTS (Universal Mobile Telecommunications System) Forum (2003) forecasts that, for example, mobile operators will earn more than €1 trillion in customer revenues by 2010. According to the forecast of UMTS Forum (2003), the biggest growth in the wireless service arena will occur in rich-voice, customised infotainment and mobile intranet/extranet access.

In developing wireless services, Japan has, in recent years, taken the lead over Europe, and, lately, South Korea is even overtaking Japan. In Japan and South Korea introduction of mobile services has been led by network operators that sell network capacity of wireless networks to consumers, but in Europe they have not managed to create such markets as in Japan and South Korea. The success of wireless services in Japan and South Korea has proved that in shifting to 3G services, network operators play a leading role. The reasons for the slow introduction of wireless 3G services in Europe have been the financial crisis in telecom sector, the high prices of frequency bands, loose connections between business actors and the lack of an appropriate business model. In spite of the European delay in service implementation, the belief in wireless business is still strong in all continents.

Lessons learned from mobile services have proved that young people are often the initial users of the services and simple entertainment is the largest content market initially. When developing wireless services the companies still encounter the following challenges:

• achieving interoperability of the applications and platforms via open standards and tighter interoperability between business actors in Europe,

• taking into account security and other risks attached to delivering the service requests over the network and all socio-cultural, technological, economical and regulatory factors,

• defining appropriate business model and combining it with an attractive terminal and content, and offering it to the user as an appealing service package,

• selecting the role and partners in the business network has to be done carefully by taking into account the diversity of terminals, networks and software,

• adapting the best practices of wired services by taking into account that providing a service as bit-pipe - as in the Internet - to customers does not work in the wireless context (Henten et al. 2003),

• managing the decentralized, networked value chain, and

• delivering the maximum amount of content supported by each terminal, and reducing unnecessary requests over the high-latency wireless link.

Päivi Kallio, Ph.D.

More information: Kallio, P. Emergence of wireless services- business actors and their roles in networked component-based development. VTT Publications 534, Espoo, Finland, 2004. ISBN 951-38-6386-7, ISSN 1235-0621. 118 p. + app. 83 p.

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