Will the cell phone of the future be free?
Don’t laugh. A recent study by Forrester Research on European cell phone use concluded that wireless companies on the continent were squeezed by competitive pressures and bled dry by the cost of third-generation (3G) licenses. Their only hope of generating much-needed extra income now is from mobile gaming.
These won’t be ho-hum, zap-the-aliens kind of games, but completely interactive experiences featuring color and sound comparable to a video arcade game. The report predicts that if wireless carriers can increase usage they’ll beat their debt problems.
All of which raises an intriguing possibility: Will the next generation of phone, the “always-on” 3G wireless device, cost us nothing? That would come as a relief to those of us who are burdened by wireless expenses. The average local monthly bill is up 9.8 percent since December 1999, according to the Cellular Telecommunications & Internet Association, an industry trade group.
In 2000, the average cell phone user spent $543.24 in mobile charges. Imagine if that disappeared by, say, 2004.
When the first 3G phone tests began earlier this year, most industry observers believed that the only way for carriers to recoup their costs was to raise prices. 3G, which is short for third-generation mobile communications technology, promises connection speeds of up to 384 Kbps when a device is stationery or moving at pedestrian speed, 128 Kbps in a car, and 2 Mbps in fixed applications. Who wouldn’t pay more for that?
But the gaming revenue model presents an attractive alternative to travelers because most people who travel don’t have time for games. Few game developers even bother to create products that road warriors would be interested in because travelers are normally busy worrying about other things. Like a missed flight. Or finishing that next multimedia presentation on a laptop. Or adding a few numbers to an electronic spreadsheet.
About half of all online gamers are college age or less, according to estimates released by Merrill Lynch last year. By 2002, the number of young gamers is expected to jump to 75 percent. In other words, if the free 3G model becomes a reality, then it will be subsidized by young people.
Granted, there are problems with this idyllic vision of the future in which the parents of the world depend on children to cover their communication bills. This isn’t Europe, for starters. The United States and Canada still lag behind the continent in terms of per-capita cell phone use. We’re slower to embrace new wireless technology and our cellular networks still have significant gaps for reasons that are often less technological than geographical.
There are also assumptions about the new arcade-like games that may not necessarily prove to be correct. Ericsson, Motorola, Nokia, and Siemens are busy developing these interactive games, but will they be addictive enough to sustain an entire industry? And if they are, shouldn’t we be troubled that our kids will end up wasting half their life away by playing games?
Is it even prudent to saddle one generation of users with the financial burden of supporting a new generation of cellular phone service? Time will tell if the free 3G theory is just the product of an analyst with too much time on his hands or the brave new world of communications.
One thing seems certain, however: the new cellular phones will probably change our most basic assumptions about wireless communication.
Maybe for the better.
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