GPRS is 'bigger failure than WAP'

NEWS

European mobile network operators are barking up the wrong tree with 2.5G data services, according to a consultancy firm, which suggests that the industry could be repeating the mistakes it made with WAP (wireless access protocol). Operators such as MmO2, Vodafone, Orange and T-Mobile in the UK have begun selling data-based GPRS services -- also known as 2.5G -- which speed up download times and create an always-on data connection. But these companies are making a strategic mistake in charging customers the same per-megabyte rates across the board, according to Denmark-based research firm Strand Consult. "The way GPRS is priced today is as if all phone calls cost the same, whether they were long distance, international, or local," said Strand chief executive John Strand. "Operators need to understand that pricing of GPRS is much more complicated than that." European operators struggled with how to bill for GPRS even after the technology was ready, which contributed to a slow rollout. But now that the GPRS services are available, Strand says that pricing regimes are still not attractive to customers. The result is that few are signing up for the services, and even fewer are using them. "GPRS is a bigger failure than WAP was," he said. He noted that the revenue brought in by GPRS among the four Denmark network operators in the past year amounted to only about 23,000 euros (roughly £14,0000), which would not be enough to pay for the lunches of the engineers that installed the GPRS equipment. Billing is a key issue with telecommunications services, because the systems are complex and expensive to set up. In the US, for example, mobile phones have been less successful than in Europe partly because of the way billing works -- customers have to pay to receive mobile calls, and phone companies are unable to charge different rates for calls made to mobiles. Similar difficulties will continue to beset European mobile operators with GPRS unless they change their ways, Strand believes. He advocates a billing system similar to that used in Korea, where users pay a lower rate for multimedia downloads and a higher rate for text-based downloads. "When you're collecting email, it's not data-intensive, but it's very high value. If you're watching a movie, it's not of such high value, but it's very data intensive," he said. "You've got to say that these are different kinds of data traffic with different prices." The Korean market also prices GPRS data in "packets" of half a kilobyte, which makes it easier for customers to understand how much they are paying for. Strand publishes a report called "The Korean Mobile market, a window to 3G" that explains how the highly successful Korean market works. There may be some hope for European operators, Strand said. Technical solutions exist today that can handle differentiated GPRS billing, and some operators are already using a similar business model for "premium SMS". Premium SMS services, which have become a success for European operators, let users transfer graphics, ring-tones or other extra content for a fee above the usual SMS charge. "It doesn't make sense that the Premium SMS business model is in place but they are not doing the same thing for GPRS," Strand said.

To see the latest news on the next generation of mobile communications, see the GPRS/3G News Section. Have your say instantly, and see what others have said. Go to the Telecoms forum . Let the editors know what you think in the Mailroom.

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

ZDNet UK Live

@Jack, > Works really well for thieves.... Nice attempt to deflect the argument by tossing in a point that's totally irrelevant, even it were...

9 hours ago by BrownieBoy on AMD Ultrathins to challenge Intel Ultrabooks

Make that 13 people now - I got refused today at Manchester airport. I thought I was up to date on this legislation - I knew of the EU ruling from...

12 hours ago by bootlegger on UK airport body scans will not be opt out

Don't forget to check out apps like GoodReader or SlideShark either, they're indispensible for people on the go in presentation situations. Best...

14 hours ago by tinycg on Four top iPad apps for people on the move

Well it seems there is something a number of us agree on. Why is the Ubuntu Unity launcher so ugly? I thought perhaps it was something to do with...

19 hours ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint

Duplicate comments are not made intentionally. Its very good to know that now you are keeping check on this problem because sometimes a commenter...

1 day ago by Freebies202 on Microsoft fixes blog comments, speeds up blogs with open source

"the very significant number of users" and "many (most) of us" - you have no evidence for these statements. It is a fact that most users are saying...

2 days ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint

Another grammar faux pas is the improper use of "you". When sitting down down in a restaurant, for example, I get cringe when the waitress...

2 days ago by Marg Menzies Harrison via Facebook on 10 flagrant grammar mistakes that make you look stupid

And NOW, folks, for Canonical's next trick... Kubuntu is late. Here's a pencil. Draw your own conclusions. cf.:...

2 days ago by zdnetukuser on Linux Minterface

@kevinmchapman. The discussion here reflects the very significant number of users who really do like the traditional menu system and who wish to...

2 days ago by Moley on A tale of two distros: Ubuntu and Linux Mint

Er, no... It is an efficient means of finding the application/file/setting you need in one place. The icons are a simply a fallback for when you...

2 days ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint

Isn't the provision of a text based search an admission by the developers that the mass of icons approach does not work? I don't need to use a...

2 days ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint

"Unity and GNOME 3 both abandon the old text-based cascading menus in favour of a graphical icon-driven system." Point truly missed. Both use a...

2 days ago by kevinmchapman on A tale of two distros: Ubuntu and Linux Mint

whs001 - Thank you, I'm glad you liked the article. I absolutely agree with you on your first point. I should perhaps have made it clearer that...

2 days ago by TerryRK on A tale of two distros: Ubuntu and Linux Mint

If we allow corporate interest to dictate the way our government circumvents due process against foreign entities then we should accept the same...

2 days ago by Dennis Nilsson via Facebook on ACTA stumbles in Germany

I totally dislike pirating of works, I fear that artists will be deterred from creating works if they think that they are going to get ripped off....

2 days ago by GHar123 on ACTA stumbles in Germany

How dare film makers, artists or anybody that invests in creativity stop us pirating their works for free. I want to be able to walk into my local...

2 days ago by JCB33 on ACTA stumbles in Germany

@GrueMaster. I prefer horses for courses rather than one size fits all. I, and I suspect most other computer users, do not really wish to have...

2 days ago by Moley on A tale of two distros: Ubuntu and Linux Mint

The product that scares me every time I have to use it is the Office 2007 version of Excel. The first bug that I found was applying the median...

2 days ago by greycynic on Ten flawed products that derail productivity

Nice review and very informative. One thing I'd like to add (in reply to whs001's 1st question), the main reason to have the same interface from...

2 days ago by GrueMaster on A tale of two distros: Ubuntu and Linux Mint

I'be been using Mint 12 since the RC came out, and I am far more happy with the Cinnamon, the Mate, and, yes (with extensions), theGnome 3...

2 days ago by Frederick Wrigley via Facebook on A tale of two distros: Ubuntu and Linux Mint

Featured white papers

Latest jobs

GPRS is 'bigger failure than WAP'

Daily Newsletters

Topics

Related stories

BT to bundle Wi-Fi and GPRS

Post your comment

ZDNet UK Live

Featured white papers

Latest jobs

PHP Web Developer - html, css, javascript

Java Developer, Online Gaming, London

Quant Dev, Hedge Fund, FX, Excel VBA

Inside ZDNet UK

A tale of two distros: Ubuntu and Linux Mint

2012 Predictions: VCE FastPath, VI SAN Probe & Hadoop

BlackBerry Bold 9790

Make faster, smarter decisions using BI

Ten factors that make Ubuntu 11.10 a hit

Toshiba Portégé Z830-10P Review

BT's archive: Pictures from the vault

News & Analysis

Reviews

Blogs

Resources

About Us

Member Services

Special Features

Advertising Features

ZDNet UK / News and Analysis / Mobile IT / Mobile Working

GPRS is 'bigger failure than WAP'

Daily Newsletters

Topics

Related stories

Post your comment

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

Featured white papers

Latest jobs

Inside ZDNet UK

Resources

About Us

Member Services

Special Features

Advertising Features