Ahonen (2003) believes that mobile phone convergence, specifically that of 3G, is the ultimate convergence of the various communication and content media, combining voice and data, fixed and mobile, telecoms and internet, digital content and delivery. While many other technologies such as digital TV, Bluetooth, W-LAN (WiFi) and satellite can provide a partial solution, and thus be part of the ultimate digital convergence, at the core centre of the convergence is 3G. This major technological change in communications has driven an information revolution. The mobile phone- what was once just a telecommunications device, through convergence has become a catalyst comprising all three sectors of the communications industry. It is necessary then, for any company even remotely involved in the digital convergence, to understand the opportunities and threats that mobile phone convergence has created.
Competition has increased due to the continued globalisation of the industry and the progressive convergence with other new technologies. A Mobile Phones Market Report (2003) believes that this has offered mobile telecommunications operators the potential for new markets and new consumer demand, but also the danger of competitor technologies decreasing business.
A transition from voice to content services has also occurred. As 3G mobile technology has been launched, the functions of mobile phones has expanded with the prediction that making voice calls will be an increasingly small part of what people use their phones for (Mobile Phones Market Report, 2003). The threat of operators suffering from falling revenues for voice services will prompt them to strive to encourage the usage of non-voice services, such as messaging, games, logos, ringtones and mobile Internet access. Furthering this, there is an opportunity to target traditional forms of media such as entertainment, news, music, sports and finance, and consumers will see it in new functionality in their mobile phones in the improved user experience of services. According to the Wikipedia (2004) the technology of the features "may well be likened to that of the Star Trek Communicator.
The leading wireless infrastructure manufacturers are under threat as they have significant amounts of research and development at risk if each does not successfully deliver their 3G platforms to the market and win contracts from the top wireless carriers. In turn, wireless carriers are under pressure by investors and debtors to deploy 3G services to recoup investments in 3G spectrum licenses (3G Press, 2003).
Another impending threat brought about by the convergence of mobile phones is furthered globalisation of the market. This could result in the mobile services industry being driven by the top 10 to 20 global operators, as the only companies that can carry a capital structure necessary to support the acquisition of 3G spectrum licenses, build out next-generation networks, scale their operations worldwide and create a powerful global brand (3G Press, 2003). Furthering this fraud is a huge threat to users as immoral people are already scamming people for financial gain via their mobile phones.
With the opportunities and threats present, a large majority of the companies involved are in an advantageous position. Nokia President Ala-Pietilä (2004) believes that they can gain user acceptance by offering services that enrich people’s lives, allowing them to interact with the world in the different domains of life. The key lies in these companies expanding mobility into new areas such as imaging, music, media and games. The technology enablers are largely in place, however the industry must continue to protect and energize the mobile communications ecosystem by creating an environment based on open standards and platforms. In summary, the main threat that mobile phone convergence has brought about, is the technology induced competition which might utimately reduce the number of players in the industry. Conversely, business models based on partnerships are the cornerstones for the continued success of the industry to generate opportunities for all players and foster innovation.
Back to Mobile Phone Convergence
Donna Locke 23:45, 28 Oct 2004 (EST)
