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3G: the consumer verdict
The emergence of 3G has seen mobile phone users trade a simple communication tool for a means of richer communication and entertainment. It has met a mixed reaction so far, but 3G's future really does lie in the hands of the consumers. Knowing what they want is the key for operators to take the technology to the next level.

This means understanding the unique needs and expectations of individual markets, rather than relying on a blanket approach. Ericsson's Consumer & Enterprise Lab has examined some key markets - Japan, Italy, Sweden and the US - from the customer perspective to get the answers.

The research shows that the 3G concept is associated with different perceptions in the various markets. It is best known in Sweden, where people immediately link it with the operator 3. Users in Italy automatically think of video telephony while there is little knowledge of the term 3G in the US and Japan.

Erik Kruse, senior advisor at Consumer Lab, says that, for many users, 3G simply means a new mobile phone. "They see it as an attractive handset with nice features and services. What they want is the possibility to enjoy richer communication," Kruse says.

For most mobile phone users, the technology in itself has little value compared with the services it can provide. This is particularly the case in tech-crazy Japan, which despite being the largest 3G market, has a low understanding of 3G. This shows it is evolution rather than revolution that is pushing 3G uptake.

"Consumers want the ability to send and receive videos, to have video telephony and a faster connection to the internet. They also want sophisticated information and entertainment services that require the high bandwidth you get with 3G," Kruse says.

The research clearly shows that mobile TV is a highly desired service with true mass-market potential. As an established concept, which is easy for consumers to understand, TV on the go is expected to be a winning addition that will boost 3G uptake.

Richer communication via video calls or video messages brings an emotional dimension to communication, which has proved most popular with young consumers. And with a range of services that reinforce this emotional approach, 3G has largely been a youth-driven market to date.

Teenagers, research shows, are leading the way in embracing 3G. In Italy for example, young people are buying 3G handset for their parents so they can enjoy video calls together.

Indeed, one of the difficulties in developing greater interest in 3G is critical mass. The small number of consumers with mobile phones capable of receiving video calls for example is a problem that limits usage.

The number of 3G subscribers passed the 26 million mark at the end of 2004, with most of them in Japan. In the US, 3G is expected to reach the mass market in 2006 with operators launching 3G services at the end of 2005.

In Europe, meanwhile, signals remain mixed. Vodafone has set itself the target of 10 million 3G subscribers by March 2006 while Orange hopes to attract 2 million by the end of that year.

Consumers are still curious about and willing to test new 3G services, but are tired of teething troubles. In Europe, a combination of poor coverage, bulky handsets, inferior battery capacity and costly services has led to a negative experience for some 3G users.

As Kruse says: "Consumers are extremely critical if the service doesn't work from the beginning. They expect operators to launch only services that are needed and already proven to work."

Additionally, until the quality and design is on a level with portable alternatives (digital camera, camcorder, mp3 player) many consumers will prefer to use other devices first, leaving the mobile phone as a last resort.

For non-users, such negative connotations have resulted in a "wait and see" attitude to 3G. However, research shows that people who do not have a 3G mobile phone yet are convinced they will get one in the future.

As Kruse says: "Only when there are more handsets on the market, and more users, will people really see the benefit of 3G."