Marketing 3G - 21/06/2005

Publié le 21 juin 2005 par Arnal

Marketing 3G:

3G means bandwidth and immediately raises the content concern. Voice and SMS are not enough to feed the pipe and fill the operator's pocket. What operators need, is to raise ARPU and revenues.

Mobile content and more precisely mobile video is attracting more and more people. A new movie channel aimed at mobile phones, The Wildlight Channel, will be launched in Europe first then in NA. Each film will be in the 1-5 minute range. Sport is another popular theme and operators are launching event transmission. The International Rugby Board is offering licensing rights to broadcast the Rugby World Cup to mobile phones in 2007. The National Football League or soccer matches may be viewed on a mobile phone as well. Good.

But a debate is opened: is it the right way marketing 3G services?

For some (bulls), 3G should become a mass market and attracts as many users as possible, including teenagers. That means marketing 3G as a commodity, appeal to people in the lower-income customer base and adapt new services tariffs as close as possible to the traditional voice rate. Offerings also are adapted to customers: entertainment, games, video clips and TV, music, etc...But, content providers are traditionally slow to adapt, with the risk of disappointing users. The result, in this period of taking-off and yet of low usage, is for sure decreasing ARPU. How long such a strategy is sustainable?

For others (bears), 3G should target high income users, big spenders and early IT adopters. ARPU should increase as originally promised in selling 3G mobile networks. The target here is totally different and offered services are mainly related to utility, and efficiency (location based services, e-mail, ...). The customers are businessmen, white-collar professionals, VIPs, ... This model can be progressively opened to other social layers when success is got.

What is the right strategy now? Bear or Bull or mixed?

I would just recall that 2G success has been made possible with mobile voice tariffs much higher than fixed voice tariffs, allowing telcos to collect a lot of money. 2G has progressively become a mass market only for the past few years. I have the feeling that 3G mass market is premature. It is very difficult to set up a mass market strategy when the services (content) are not really finalized, when the network is not yet widely deployed and when tariffs are yet too high.