In the pipeline

What is more important - the message or the medium? Anthony Clark looks at UMTSIs third-generation mobile technology (3G) merely a means to an end, a pipe through which a range of content and services will be provided? Or should network operators control the content and services that 3G promises to deliver?These were just a couple of the issues tackled by a panel of experts in a debate - UMTS: What's It All About? - organised and hosted in London by Cambridge telecoms development company Plextek.Despite any cynicism there may be over 3G and how to make money from it, those vying to gain UMTS licences are willing to put their money where their mouths are, so they must be convinced that there is a business case. And since these organisations are, arguably, the best informed, it stands to reason that they must anticipate a ready market.But should those who win the licences, and subsequently operate the networks, retain control over the one-to-many, many-to-one, or many-to-many applications made possible by this technology? Or should they concentrate on building the infrastructure and physically operating the networks?Many years of Internet experience led Peter Dawe - the man who founded and subsequently sold the leading Internet service provider Unipalm Pipex to UUNet for #150m in 1995 - to believe that UMTS is nothing more than a communications technology."That's all it is. Basically, it is an interface into an application device or devices. You don't know what UMTS is going to be used for in the future."The Internet had begun as an e-mail system, he said. And it was only after several years that other applications, such as file transfer, came to light. "But there was no way of predicting that use. With UMTS, we should not worry too much about the applications." He advised operators to introduce a general-purpose interface and API, "so that others can come in and connect whatever they want".But Dr Chris Wildey, senior manager in 3G terminal product marketing at Nokia, who is also vice- chair of the UMTS Forum, thinks network operators must take the lead and stimulate the market: "One of the things we are looking at in the Forum is the wider vision of UMTS. We are deliberately trying to address the wider issues of content, value and everything else that fits in to how UMTS might be used."We are trying to move people's thinking forward into applications and services - attempting to apply what has been done very successfully from a technology point of view to the full scope of interactive wireless multimedia."If the new wireless or UMTS operators approach UMTS as just another GSM-like mobile system, that would be very disappointing. There is a huge opportunity for the new operators to create totally new business."In the past, network operators had done a good job in providing services, and should be capable of doing the same for tomorrow's networks, he argued. "It doesn't have to be the operator community that does that, but it has a lot of the key competencies. They have the understanding of billing and security. A lot of them are rapidly understanding e-commerce and other aspects. They have all the right bits to become major players. But if they fail, there will be others."Dawe strongly disagreed, stating that operators should just provide connectivity: "Fifteen years of the Internet shout and scream that cable operators are quite good at shifting bits. That is what they do. They do not have any interest in content. Murdoch, AOL, Disney and FT have an interest in content. BT does not. Nor does Vodafone or anyone else."But there are commercial reasons why operators could not end up simply in the role of bit carriers, said Jock Shearer, director of 3G at MSI. "It is very difficult to come up with a revenue model that would make that pay," he explained. "There has to be some way that the operator collects revenue. That is where applications and services come in."The advent of UMTS represented "a massive milestone in investment and regulatory achievement", added Dr Colin Smithers, MD of Plextek. "We have to get it right because the next chance will not come for another 12 years."John Tysoe, head of global telecoms research at WestLB Panmure, highlighted e-commerce as a key application for 3G: "Mobile e-commerce in particular could well be the application that squares the circle on some of your sums. It seems to me that a lot of people will want to make purchase decisions on the move for a variety of goods."And Gareth Hughes, executive director of Psion, agreed: "Mobile devices are ideal for impulse purchases made on the spur of the moment." But personalised content and services were likely to prove to be the principal advantages of 3G technology: "In terms of the network operators doing the same as Tesco and Amazon, they will not. But they are in a marvellous position to aggregate services and to learn about the individual customer to do permission marketing. The cleverer that one can be about tailoring services, the better."Down the value chain, one will see people getting cleverer. As a device manufacturer, we can preload certain things - as I am sure Nokia and others can. We would like some ongoing revenue from the customer's use of our devices, and network operators would like the same. It is not entirely clear to us how things are going to pan out."The panel discussed the possibilities for multi-casting - sending, for example, TV soaps or video clips of football highlights out via UMTS to potential recipients. But it was undecided about the likelihood of widespread take-up, despite the Japanese experience, where NTT DoCoMo has signed 4.5 million subscribers to its I-mode data system, used mainly for entertainment.In the west, one of the early applications for UMTS was more likely to be in business, said Dr Wildey. "Users can access their portal networks wherever they are in the world. The content will not be a programme, but linked information to solve a particular problem at the time - an extension of one's memory."Geoff Varrall, director of RTT Programmes, pointed out that it would be "difficult to make a business plan unless one has lots of personal subscribers as the main income stream."To build a third generation business plan on corporate subscribers would to me be risky, given that the only driver at the moment in 2G is personal subscribers using Short Message Services (SMS) - particularly the youth sector. I do not think that the numbers add up in 3G network investment unless one has a fireproof way of getting consumers to spend lots of money."Dr Mike Woodley, business development director at Plextek - who chaired the meeting - agreed: "Substantial investment is needed. Will anyone be prepared to meet it, unless they have a solid business plan for getting their money back? The Internet has traditionally been regarded as an extension of memory and thought and, in practice, it is rapidly becoming an extension of personality. How will 3G deliver against that expectation?"Mike Short, director of international affairs and strategy at BT Cellnet, said the psychology of wireless 3G technology - and how it differed from wire line or cable - was critical. "One is thinking of memory, thought and psychographic issues. Wireless is different from wire line in the sense that it is a very personal device in one's pocket. 3G brings both an extension of personality and more capability.""We are not going to have just a wireless telephone," said Dr Wildey. "It is going to be something much more flexible. It may not even look like a phone at all."But Professor Peter Ramsdale, chief engineer at One2One, raised the concern that the user audience would not have such high expectations. "It is all very well having the vision that people will start doing something different, but I don't think the public's expectations move quite as fast as that. The public are content with what they have and do not see other possibilities as quickly as some people think."Alan Hadden of Hadden Telecoms, and chairman of the communications strategy group of the UMTS Forum, added: "The Internet, from the fixed side, is showing the way but that will change as wireless penetration builds. The point is that the mobile phone will become the preferred device. With that, expectations will change. Suppliers and operators will recognise that and there will be a mix of skills and solutions."I am sure that alliances will be formed. The drivers will be different. They will no longer be `what can I push on the Internet?' The driver will be `what can I push in your hand?'"Ian Vance, former vice-president and chief engineer of Nortel, now president of Amazing Communications, agreed that 3G needed an aggregate of activity to make investment worthwhile, and partnerships and alliances were likely to be the way forward: "Doing deals in the early days rather than doing it yourself, then opening out into a world where one can get access to whatever, seems to be the evolution that one would expect to go through."Behrooz Lessani, business director of Alcatel's UK radio communications division, agreed. "Some in the industry, including Alcatel, believe in the `Netco' and `Servco' model and we think that separation of the network/mobile operator from the service providers is the right way forward."To stimulate innovation in services and contents, it is probably better to address the structure of the industry and the question of the right way forward with respect to contents, services and networks through open standards. This way, we will see a gradual evolution in the industry."Panel members* Peter Dawe, chairman, P Dawe Consulting, founded Unipalm in 1986, specialising in networking different computers together using TCP/IP technology. In 1990, Dawe established Unipalm Pipex, a commercial Internet service company.* Alan Hadden, Hadden Telecommunications, has been involved in the mobile industry for 12 years. In 1998, he was elected president of the Global Mobile Suppliers Association which represents GSM and 3G suppliers.* Tim Hewitt, senior adviser, spectrum management policy, BT Group Technology, is the chairman of the Spectrum Aspects Group of the UMTS Forum and formal observer to the CEPT spectrum management community. He is also the CEPT co-ordinator for IMT-2000 matters at WRC-2000.* Gareth Hughes, executive director, Psion, has been a board director of the company since 1997. He spent several years as MD of the datacoms division, Psion Dacom, and recently became responsible for Psion's new business activities.* Behrooz Lessani, business director, radio communications division, Alcatel, joined the company in the UK as business director for mobile and LMDS in 1998. From 1990 to 1998, he was manager of the mobile communications group at Scientific Generics, a business technology consultancy.* Peter Ramsdale, chief engineer, One2One, has been at the forefront of developments in mobile personal communications, including the world's first GSM 1800 network.* Jock Shearer, director of 3G/LMDS business development unit, MSI, has more than 30 years' experience in the telecoms consulting industry. Shearer ran the Anglo American consulting group Synapsis, and led a major European systems integrator in expanding its mobile telecoms sector activities.* Mike Short, director of international affairs and strategy, BTCellnet, was elected chairman of the GSM Association in 1994. Short's current focus is on third generation (UMTS) cellular and steering BTCellnet's networks strategy from GSM to UMTS. He was elected chairman of the UK Mobile Data Association for 1999.* John Tysoe became head of global telecoms research with WestLB Panmure in June 1999. Before that, he worked with SG Securities in a similar role. He spent 15 years in the financial services industry specialising in high technology and telecoms services.* Ian Vance, MBE, is president of Amazing Communications, his own consulting company. He was president of the Federation of the Electronics Industry during 1998-99, and chairman of North London Leadership, a public/private organisation working on the regeneration of north London.* Geoff Varrall joined RTT Programmes as an executive director in 1985 to develop RTT's provision of technology and business services to the wireless industry. He co-developed RTT's programme portfolio including RF technology, data over radio, introduction to mobile radio and private mobile radio systems.* Dr Chris Wildey, senior manager, Nokia Mobile Phones (UK), has been active in UMTS and third generation studies since joining Nokia in 1992 when he started participation in ETSI SMG5 and ITU TG8/1. He has contributed to industry/government forums, including the UK Third Generation Advisory Group. In 1997, he was appointed UMTS Forum vice-chair and treasurer and was re-elected for a further two years in December 1999.* Dr Colin Smithers, MD and co- founder of Plextek, is an expert in communications systems, radio design and radio propagation. He has an extensive track record in the design of radio products for a range of applications and cost and performance targets.* Dr Graham Maile, director, strategic consulting, Plextek, has more than 20 years' experience in the telecoms industry with an emphasis on GSM and UMTS. He is chairman of UKTAG, the UK Third Generation Advisory Group, which advises the government on the standardisation and implementation of mobile systems.* Dr Michael Woodley, director, business development, Plextek, has more than 30 years' experience at all levels of R&D and product development in a range of industries. During his career, he has been responsible for the successful introduction of a number of products, principally telecoms and professional audio equipment.