Interview | CNN.com | China restructures mobile market ready for 3G force

Now that the 3G doves have been set free by regulators, questions abound on what 3G really means and might bring to the market. Will it change the life of users? Will it make billions for operators? Will it save content providers? We provided some ideas on what marketers can expect from 3G in China in a recent interview for AdAge and got asked last week by CNN.com what it might do for the Chinese people: more convenience? better rural development?

The most developed 3G markets remain Korea and Japan and are fairly good indicators on what the future might bring. Japan has over 85% penetration of 3G and does not sell 2G any more… they are actually on their way to 4G, while still figuring out what to do with 3G. More interestingly, as we showed in our “Dogs and Demons” presentations at the China Mobility International Summit in Beijing last November and Mobile Monday Global Summit in Kuala Lumpur last May:

• Users don’t understand what is 3G. They probably don’t need to if the operator is able to show what people can actually DO with it. The use of “3G” in marketing is largely a confession that a telco has not much more to say.
• Nobody uses videophones. There are probably 50 million videophone-enabled handsets in Japan but hardly anyone uses this function. Reasons are the same there as everywhere: higher cost than voice, too invasive, (perceived) lack of counterparts, sucks up battery, need of headset. Just think how often you need video for a Skype call.
• 3G takes years. Have a good network coverage, battery life and pricing then we can talk.

Services make 3G valuable. Unfortunately, outside Japan’s i-mode and Apple’s iPhone, no carrier has properly developed a mobile ecosystem.

As for technologies:

• China has a “third mover advantage” for W-CDMA deployment after Japan and US/Europe. Coming third means proven tech, cheaper procurement for network and devices and loads of best practices to draw from for services. Also, it helps avoiding the various marketing/service/device mistakes done by other carriers.
• “Second-and-a-half mover advantage” for CDMA after Korea (who is now switching to W-CDMA), KDDI in Japan and US.
• Unfortunately, China Mobile is a “first mover” for TD-SCDMA and the first runner gets all the wind. By the time the TD network will be more or less working with decent handsets, Japan will be full speed in 4G (planned for 2010). Maybe better luck with LTE after TD?