The next generation
Despite the hordes of impossibly good-looking 20-somethings promoting sleek clamshell mobiles to consumers, the telecom industry's initial marketing of 3G has been aimed squarely at the lucrative business sector.
And to lure business users telecom firms are using the bait of 3G datacards: easily installable little slips of technology that give your laptop remote online access at speeds approaching those of broadband.
John Lillistone, senior marketing manager at Vodafone, the biggest player in the mobile market, says: "3G gives business real advantages. It makes remote access to emails and company files - which is what most business people want - almost instant and almost painless."
Tom McGuire, head of technology at Birmingham-based lawyers Martineau Johnson says: "There are real advantages that 3G will bring business. Perhaps the most obvious is that it'll make out-of-office working more attainable with elements like video conferencing.
"The big problem with remote working has been that people don't have face to face interaction, which is still the basis of so much business. 3G will help overcome that and accelerate the breaking down of the office walls."
So enamoured were telecom companies with 3G's potential that, in 2000, five of them - Vodafone, T-Mobile, Orange, O2 and newcomer 3 - famously paid Gordon Brown more than 20bn just for the right to hold licences.
The first four launched 3G services with laptop datacards, primarily for business users, only later followed by mobile phones. Hutchinson's 3 is alone in plumping straight for the consumer market and has yet to launch a business-orientated service.
Amid understandable griping from those high-paying winners, telecoms regulator Ofcom is looking at freeing up still more ether and allowing other 3G wanabees in - Virgin Mobile is reportedly proposing to join the fray later this year.
But if 3G offers so much why have large parts of the business community - particularly professional services - shown such marked reluctance to put it at the centre of their communications strategies?
To answer that it might help to first have a layman's understanding of what 3G actually is. 3G is short for Third Generation and is the latest form of mobile technology to enter the mass market. First Generation carried voice and simple SMS texts. 2G carried small amounts of data transfer.
3G encodes information into "packets", allowing phone networks to carry much more information much more quickly. It means laptops, mobiles, or combinations of the two, can send and receive data at about 64 to 384 kb per second (kbps) - about the same speed as a basic, entry-level broadband connection.
As evolution is rarely simple there is also 2.5G, which uses the GPRS (General Packet Radio System) technology that emerged about four years ago. GPRS, which has quickly made friends in the business world, sends data at roughly the same speed as a domestic modem link - 56 kbps - or slightly faster.
There has been a lot of criticism about the slow rollout of 3G. Currently, between a third and half of the population (depending on the network) cannot pick up 3G signals, although it is part of the licences that coverage reaches 80 per cent by 2008. Those people that can access 3G live mainly in major cities like Birmingham, Leicester and Nottingham.
Part of the reluctance, particularly among white-collar firms, to embrace 3G has been the inability to see what definite business advantages it brings.
Kundan Misra, business development manager at Coventry-based e-commerce consultancy Meadoweb, says: "Much of the business domain is wondering how to generate revenue from 3G. It's nice to see a colleague's face on a mobile video call, but it doesn't really add value."
Naturally one of business's main concerns in adopting 3G is cost, particularly among those firms that have embraced its rival GPRS relatively recently.
Although datacards are relatively cheap - well under 100 - there is uncertainty in the business community about the costs of calls and data transfers, not to mention the expense of overhauling communications systems.
Indeed, a Gartner study of directors found that less than a quarter would pay extra for 3G. This was even though 80 per cent thought mobile communications were important - mainly for customer satisfaction, savings and business opportunities - and expected their company's usage to grow substantially over the next three years.
Steve Mason, managing director of Nottingham consultancy Mason Infotech, says: "Whether 3G is widely adopted will depend on the data tariff. If it's a reasonable flat fee it'll become widely adopted quickly. If it's based on the amount of data transferred companies will switch to 3G only when they have to."
Rick Cudworth, partner within KPMG's information risk management team in Birmingham, says: "Many organisations are in the wait and see school, sticking with GPRS as they're now comfortable with the technology. There may need to be a significant cost incentive or killer application to prompt users to migrate. There is also the possibility of telecom firms deliberately phasing out older, slower alternatives to encourage migration."
Cudworth believes those killer applications - usually media rich - may be delayed by security concerns as 3G users worry about the viruses usually associated with PCs jumping species and migrating to mobile phones.
It is perhaps too easy to look at the professional services as the barometer on how 3G is being viewed by business - but many pundits believe we need to examine more hands-on sectors to see the technology being embraced with enthusiasm.
For example, in retail it is being adopted for scanning and workforce management, while utilities are using 3G for remote monitoring of meters and remote diagnostics.
Indeed, Vodafone claims most early 3G adopters have been SMEs - particularly those in manufacturing and retail - because they do not have long, slow purchasing and change-over issues, as is the case with larger firms, and can see immediate practical benefits. It expects a second wave of orders "probably running into hundreds of thousands" for datacards as larger and professional organisations finally make purchasing decisions.
McGuire says: "We need to resist the idea that 3G is somehow for professionals only. It has huge applications in areas like transport, construction and logistics."
Meadoweb's Misra adds: "The sectors in which 3G is being readily adopted tend to be prosaic. In logistics every company can now purchase 3G handsets to track deliveries. In utilities technicians in the field can use the camera facility to send pictures of damaged equipment back to base and then pick up detailed images on how to repair it.
"The big area it will also affect quickly is sales and marketing. 3G means reps can pick up previous sales presentations, detailed data on clients and live market information, without going back to the office."
One example of a sales-led firm quickly embracing 3G is estate agent Maguire Jackson, which specialises in up-market residential property in Birmingham's Conference Quarter, and business property in the city's Jewellery Quarter. The firm is installing 3G technology to contact potential clients with details of properties as soon as soon as they come onto the market.
Director Philip Jackson says: "We're in a market where we're often one of two or three agents that have been instructed by developers. So being first out with information using technology like 3G is vital."
3G is also being squeezed by other emerging technologies. Although GPRS is achingly slow it can be picked up across 99 per cent of Britain. Many pundits believe GPRS still has a long way to evolve - witness the number of people now sitting on trains with their Blackberries - before it is truly superceded.
Nor can 3G claim the edge with speed. Compared with Wi-Fi or WLAN systems like BT's Openzone, which allow laptop users close to a public hotspot to remotely receive and send data, 3G looks positively pedestrian.
There are now more than 1,200 hotspots around Britain and the total is growing quickly. There are, for instance, more than 50 hotspots in Birmingham, 20 in Wolverhampton and 30 in Derby.
Infotech's Mason, says: "Slightly older technologies already effectively do much of the work 3G is designed for. For example, GPRS carries mobile data at speeds you'd get on a conventional landline.
"Meanwhile Wi-Fi works at incredibly fast speeds and is spreading to more sites like cafes, airports, stations and trains."
However 3G may soon be throwing emails, video conferences and company files around the airwaves at speeds similar to those of Wi-Fi, and without the need of being close to a hotspot at your nearest Starbucks.
This spring O2 starts testing its next-next generation technology, HSDPA (High Speed Download Packets Access) 3G, on the Isle of Man.
If the tests, offering data speeds of up to 10 Mbps are successful, we on the mainland could see the HPSDA 3G being launched by the end of this year. Again, the service is likely to be aimed first at the business user with yet more laptop datacards.
Vodafone's Lillistone says: "Adopting 3G doesn't mean an either/or option with Wi-Fi or GPRS. Datacards allow you to access wi-fi near hotspots, and use GPRS if 3G and Wi-Fi aren't available. It's more about being able to access the most relevant technology at any given place.
"And although Wi-Fi is technically a lot faster, it's far more expensive than 3G. And many hotspot points are plugged into an ordinary ASDL line, which takes you straight back to broadband speeds anyway."
So probably the issue for the business user with 3G isn't like the famous VHS-Betamax battle, with one technology victorious and those backing the wrong side left with a costly piece of rather useless technology. Rather 3G should be seen as part of a rapidly evolving and growing number of interlocking systems.
Infotech's Mason says: "The final solution won't be one technology winning but of businesses using a combination of whatever is best. So your laptop could use broadband at a home, Wi-Fi in a caf, 3G at the client's office and GPRS in a hotel."
Meadoweb's Misra adds: "In the long term the impact of 3G on all businesses will be like that of the internet and mobile phones: it'll be part of everyday business life and you'll wonder how you ever survived without it."
