Mobile communications: led by a new generation
Written by: Jason Hovet
Photo by: Luminum
![]() photo t-mobile |
With the launch of new data transfer networks and the arrival of fresh ownership at two of the three major mobile operators, 2005 was a busy year for mobile communications. Perhaps not surprisingly, 2006 looks to be more interesting still.
BY THE END OF 2005, UMTS will be the country’s newest acronym – to go along with GPRS, EDGE and CDMA. Otherwise known as a third-generation (3G) network, the service was recently launched by T-Mobile and Eurotel will follow suit in December. Oskar Vodafone, which paid CZK 2 billion for a network license earlier this year, is also introducing UMTS in late 2006. The result will be higher transfer speeds and, in some cases, farther roaming options for customers compared to today’s CDMA and EDGE networks, which were only rolled out last year. The new 3G networks will also, as many say, “open a new chapter in mobile communication,” and come at a time when the look of the market is changing.
T-Mobile was the first to announce its plans, doing so in June and taking advantage of the musical management chairs going on at the other two operators (see sidebar, p. 36). “We want to be the leader on the market,” T-Mobile spokesman Jiří Hájek declares, noting that said leader will be able to shape the direction of the market. In September, Eurotel made its plans public. Tomáš David, Eurotel’s chief strategy officer, says it was a tough decision of when to launch, as another year remained on both operators’ license deadlines. “We decided to be faster,” he says, adding that the network is ready and, more importantly, so is the handset portfolio, now with smaller, more user-friendly phones.
A new speed record
T-Mobile’s strategy, however, differs notably from Eurotel’s. For one, its UMTS network will only be available to computer notebooks or home use. For mobile telephone service, the company is holding off until HSDPA (high-speed data packet access) technology is ready, which both T-Mobile and Eurotel should begin with next year. “Is it the right time for video-telephony?” Hájek asks, alluding to a new service for mobile phones available in the planned 3G networks – and answering “no.”
HSDPA will offer faster speeds and more transfer possibilities. Eurotel plans to begin with it months after its UMTS network is up. While this offer will be for data only, David notes that, “HSDPA will make UMTS much faster.” Indeed, it promises speeds starting at 1.8 Mbps before eventually growing to 14.4 Mbps. By comparison, Eurotel’s EDGE network has a speed of only 236 kbps (1,000 kbps is equal to 1 Mbps, meaning one megabit per second), and its current high-speed CDMA network offers 2.45 Mbps. However, Hájek doesn’t want customers fooled: the speed an average user will get is much lower. For example, T-Mobile’s 3G network should deliver peak speeds of 4.5 Mbps, but the average user experience will be around 512 kbps. The same holds true for HSDPA. “If we’re talking about the average user experience,” he says, “we are still talking less than one megabit.”
3G networks will initially start up in Prague before expanding to other large cities. Combined with existing GPRS and EDGE (a faster version of GPRS), Eurotel, for one, promises a 99% penetration level in the Czech Republic. “It will be less fast,” David claims of areas only covered by GPRS, adding “but you’ll still be connected.” Eurotel isn’t forgetting about its CDMA data-transfer network, which started last year and has signed on more than 50,000 customers, with more customers still expected. “The great thing about CDMA is it […] spreads very well,” he says, noting that this makes it easier to cover low-density areas.
![]() Tomáš David luminum – d.raub & l.šavrdová |
Just as well, all three operators continue to expand high-speed EDGE networks. First unveiled by T-Mobile at the end of 2004, Eurotel and Oskar Vodafone soon opened their own networks in March this year. Oskar said in July that it had already reached 20% of the Czech population, in Prague, Brno, Ostrava and other regional centers. “We continuously evaluate traffic,” Oskar spokesman Petr Šindler says. “We want to launch in areas where it makes sense.” T-Mobile now covers more than 400 towns and villages in the country, says Hájek, and the service remains an important part of its offer. “We are still well-focused on EDGE,” he says.
Besides the new data networks, operators are also making it easier to receive company email outside the office. T-Mobile has had modest success with Blackberry phones, unveiled in January. “Sales were in line with what we expected,” Hájek admits, without revealing an exact number. Currently, the operator has only one Blackberry handset available – model 7290 – but plans to introduce more, including other handset brands compatible to Blackberry technology. “We want to increase our portfolio,” says Hájek.
Not to be outdone, in May Eurotel, in cooperation with Microsoft, started Mobile Exchange Plus, which synchronizes clients’ mail, calendars and contacts to a Microsoft server, allowing mobile access. “You just need to set it up, [then] pay for the data transfer,” claims David. Eurotel’s Office Connector Plus service is more complicated, but works with other servers, including Lotus. Similar to Blackberry, this service enables “push” technology, with a server sending the mail to the telephone. (Eurotel also plans to introduce Blackberry phones in its portfolio, although declined to give a timeframe.) Oskar Vodafone, too, is looking to expand its current email service, which is available through WAP. “Blackberry is one of the areas we’re thinking about,” Šindler says, although a decision hasn’t been made yet, and the company also wants a service compatible with a variety of handsets.
Phones have to keep up
Smartphones in general are benefiting from this progress. Sony-Ericsson’s smartphone model P910i, which is enjoying big sales among business clients, is one example. Dagmar Zweschperová, a marketing coordinator at the handset maker, notes that just having telephony features isn’t enough anymore. “All our current mobile phones have office features, like e-mail or a calendar, and provide data connectivity options, including Bluetooth in most cases,” she explains. Nokia also sees this segment becoming more worthy of attention, although the share of sales is still relatively small. “We expect and hope to move the smartphone base to a higher level,” says Victor Saeijs, managing director for the mobile phones division at the Czech subsidiary. Among business clients, its smartphone/PDA hybrid 9500 model has done well. Both handset makers are also ready for 3G, and each will have five phone models, as well as PC cards, ready for the market when the service is launched.
![]() Miloslav Doubrava photo by petr poliak |
Notebook computers are also a more common business tool. Last year, according to research company IDC, sales of desktops in the Czech Republic fell, while notebook sales grew dramatically, accounting for more than a third of sales. According to Dell’s marketing director, Vít Šubert, SMEs are buying more. “They think it’s a bigger value,” he says. Rival Hewlett-Packard expects to sell 45,000 notebooks this year. In the second quarter of 2005 alone, notes HP’s personal systems group country manager Miloslav Doubrava, the number of units sold grew 140% compared to the same period the year before. He expects continued growth, especially among notebooks with WiFi. Dell’s Šubert, however, sees a slowdown coming. “The growth will probably peak in the middle of next year,” he opines. Sales of handhelds, Šubert says, have also fallen (although he wouldn’t comment when PDAs will be adding telephony features). He adds that the future is solutions, chief among them being securing data.
With penetration levels maxing out in the country, services will be growth engines for both operators and hardware makers. Not a problem, though. On a recent visit to Prague, when asked what challenges a high-penetration level posed, Vodafone’s CEO Arun Sarin had this to say: “You haven’t seen anything yet.”
Time for change
The start of new high-speed networks comes at a time when both Eurotel and Oskar have new owners – setting up 2006 to be a pivotal year in mobile communication.The entrance of British-based Vodafone, which acquired Oskar in June and is the world’s largest operator by revenue, should prove to be the most interesting to the market, although much is still not known about its plans. Unlike Eurotel, which is now owned by Telefónica (after the Spanish integrated operator bought Český Telecom this year) who quickly gave management a face-lift, Vodafone has yet to make any leadership changes. During a late-September Prague visit, global CEO, Arun Sarin, even praised Oskar’s strategy of targeting younger customers and small businesses, and intended to grow these markets. In other countries, though, Vodafone remains a top choice among large corporate clients, a segment Oskar never really competed for. “We are very good with multinationals,” Sarin says of Vodafone. “Clearly we’ll move into that space [here].” |
Staying ahead of the game
As personnel change and competition increases, Nokia’s future as the traditional leader on the mobile phone market may involve some strategy upgrades. Just as two operators on the local market go through transition, globally the world’s leading handset maker is bracing for change itself. In June 2006, Nokia’s long-time CEO, Jorma Ollila, is leaving after 13 years in the top seat. Nokia has been feeling pressure from competitors and its market share has slipped in recent years. Despite this, Nokia keeps its eyes forward, sees new opportunities, and wants to continue leading the market – in the Czech Republic and worldwide. |
Keeping your digits
Portability, or the ability to keep a mobile number even after switching operators, is in the final stages of negotiations. All operators must agree on terms and implement the service before Jan. 15, 2006, according to a Czech Telecoms Office (ČTÚ) ruling. “We believe the deadline will be met,” says Eurotel spokesman Pavel Kaidl. Jiří Hájek, of T-Mobile, says negotiations have been difficult. “We want to see the deadline met,” he says. “We are on the right way to reaching an agreement.” Still, there have been snags along the way. |