February 14, 2006, 11:18 AM — Mobile phone users can expect to be able to access a growing variety of content from their phones, chief executives said Tuesday morning at the 3GSM World Congress in Barcelona. But the current mobile market they described suggests that mobile phone users probably won't be downloading significant amounts of content any time soon.
Network speeds are being quickly boosted, the executives said. In Barcelona, Telefonica Moviles SA has deployed an HSDPA (High Speed Download Packet Access) network that is being tried by users now, said Chief Executive Officer (CEO) and Chairman Antonio Viana-Baptista. However, in Europe the fastest commercially available networks are UMTS (Universal Mobile Telecommunications Systems) networks, and even the executives admit those are lacking.
"Today the experience is OK, it's not great, for downloading," said Arun Sarin, chief executive officer for Vodafone Group PLC.
In addition to network speeds, the executives also admitted that pricing for even the current services isn't exactly what users want. Mobile data prices are higher than many customers would like but over time costs will decline, Sarin said. As the operators evolve their networks into those based on IP (Internet Protocol), they will increasingly offer bundled pricing packages that include large amounts of data downloads, he said.
But at least in some regions of the world, mobile users are downloading content. Wang Jianzhou, president of China Mobile Communications Corp., surprised the audience by revealing that the total revenue from mobile music in China is larger than the total revenue of the traditional music industry. Where 1 million copies of a CD might sell in China in six months, 15 million copies of a single song were recently bought by mobile phone users over the same period, he said.
That success seems an anomaly. In other regions, operators are still struggling to support providers that want to deliver content to mobile users. For example, media companies are telling operators that they're used to delivering content to a standard television format, Sarin said. That's a different prospect than delivering programming to mobile phones, which come in a very wide variety of sizes and capabilities, he said. Operators and content providers are working on how to make that process easier, he said.
Nokia Corp. at least expects the demand for mobile music to grow in the short term. In 2006, Nokia expects to sell 80 million music enabled phones in 2006, said President and Chief Operating Officer Olli-Pekka Kallasvuo.
Sarin and other executives reiterated one point that they've made historically: Operators aren't interested in buying big media companies to produce content themselves. "We are in the packaging business," he said. "The skills needed for the content business are different than what we have."
Wang agreed. "We will not do our own content," he said.