Will New Handsets Screw 3G?

Independent online has taken the recent launch of Nokia’s high-end handsets and posed the question of whether the new handsets are inhibiting the carriers ability to make money from their 3G networks. “For executives such as Anssi Vanjoki, the head of Nokia’s multi-media division, the latest phones are about putting the consumer, not the operator, in the driving seat. Some features, such as the wireless networking (WiFi) built in to almost all of Nokia’s multimedia range, will erode the network operators’ income. Owners of the phones can use a free WiFi connection at home, in the office or in a hotspot to share their video clips and photos, rather than paying to send them via 3G.”
I think there’s very little chance the new services will erode the operators income. I pose this scenario: the new devices will encourage people to use more multimedia content. A lot of this will be through channels other than the mobile operators, but some will spill over onto the operators networks because the people (who are newly used to using the multimedia capabilities of their phones) will at certain times be willing to pay a premium for convenience. In total, the amount of usage of 3G networks will increase along with the usage of other channels — I think the uptake would not be as quick if people were restricted to just 3G.
Nokia also offered a benefit for carriers: “When operators look at their user base, they start to understand that some subscribers stay on the network for two or three years with the same type of device. You can bring down churn when you have really sticky applications.”

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