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Hype hurts 3G's image as telcos roll out offer
3G technology needs to give its image a lift amid its ongoing launches and limited explanation of its true potential minus the hype.
The launch of StarHub's 3G service marks the latest attempt by an Asian mobile operator to capture the elusive promise of 3G technology.
Unfortunately for the Singapore telco brand, the omens are far from clear. By now, consumers have seen 3G services come online from a host of players across the region, including Singapore 's SingTel and M1, and Hong Kong players 3 and PCCW.
Hong Kong 's initial experience with 3G provides one example of the pitfalls associated with trying to sell the new technology. Hutchison created the 3 brand in an effort to spur recognition, and rolled out its service with much fanfare at the start of 2004. Before long, it was slashing handset prices dramatically, and dealing with technical issues such as service drop-outs.
Since 3G technology first entered public consciousness, it has been burdened with the weight of expectation. Tech types saw it as a revolution in mobile telephony, offering video content on handsets and enabling consumers to truly integrate the power of multimedia with a telephone.
Telco companies, accordingly, bought the hype wholesale. The auctioning off of 3G spectrum rights in various global markets saw remarkable sums being paid for 3G licences. The UK Government alone raised US$35.5 billion from its auction, while Hong Kong priced its 3G licences at HK$50 million (US$6.4 million) for five years.
It appeared that a new era in telecommunications would soon dawn, but the reality has been more mundane. The ascension of various other wireless technologies may have confused consumers -- from the poorly received WAP, to others such as Iridium, WiMax and Bluetooth.
In addition, advertising hyping a wireless life has become ubiquitous, and has left telco brands struggling to meet consumer expectations.
Despite these missteps, the future for 3G remains compelling. Analysts predict mass-market adoption by late 2005, and the introduction of a raft of more user-friendly models this year is expected to spur growth.
DIAGNOSIS
Whitney Small
The Hoffman Agency Asia-Pacific
The most basic tenet of successful brand management is ownership. If we are not going to derive any benefit, direct or indirect, from managing the brand, why bother? Let's look at the "Tragedy of The Commons". Historically used, but owned by no authority. The tragedy is that, as an individual, your best course of action was to get as much use out of the Commons while you could. Eventually, the Commons would erode and degrade, because no one individual could do anything about it. This is a perfect argument for forming effective collective action.
3G is the technology Commons. It is not a brand; no one owns it. It is an attempt at collective action by the owners of myriad standards, (eg. W-CDMA, CD-MA2000, TD-CDMA) who are individuals using the 3G Commons. When asked if 3G is a brand or technology, over 50 people around the region replied: technology. But everyone identified the mobile carriers as critical to the success of #G-branded services. In our survey, individuals (admittedly, a savvy, early adopter group) recognized services such as gaming, web access, TV and movies, video conferencing, wireless broadband, and high-speed data transfer. But also noted was confusion over costs, complicated billing, and interoperability issues.
TREATMENT
Small's remedy
- Mobile carriers need to stop telling consumers what 3G isn't, and start educating consumers on what 3G services they offer.
- 3G operators must identify consumer confusion patterns in each market, addressing the issues at every customer contract point – top to bottom.
- Finally, mobile carriers and handset makers need to properly train sales staff. The glazed expression on many potential 3G service customers exiting stores tells you that this is a significant barrier to success.
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