The arrival of 3G competitors with large capacity on the market is likely to lead to a price war, according to the wireless strategy consultancy Northstream.
In a report brought out to coincide with the the 3GSM World Congress in Cannes, it is alleged that established players are delaying 3G and infrastructure investments while concentrating on service development and launch. However, the present growth of MMS, imaging and other data services is increasing the need for additional network capacity and bandwidth. 3G players are poised to enter the market with an abundance of capacity and force prices down.
Analysts say that there will be a “cautious but steady expansion” of 3G over the next few years as consumers become more aware of the facilities available. Volume rather than high prices is expected to drive revenues in future 3G markets putting the onus on operators to offer innovative services that will appeal to a mass audience.
Northstream also used the conference to call for greater investment and creativity in multimedia messaging (MMS). It claims that the technology is currently being held back by inter-network issues as well as a lack of useful services and simple pricing models.
Phone sales slow It is becoming increasingly clear that the mobile sector needs a stimulus, proved by the fact that a study from Strategy Analytics reveals that sales of handsets increased by just 2.4% to 422 million last year. Growth has declined markedly since the late nineties but the emergence of next generation phones has convinced the research group that handset sales will rise by 6% in 2003.
Camera phones are proving increasingly popular and it is estimated that 18 million were sold last year. With European prices set to fall, SA predicts that this figure will double during 2003.
