03 mars 2007

Cellphones of yesterday and today: my own experience

My first cellphone ever was a Nokia 2110i which connects to GSM 900 networks. Back in those days, all you could do with a prepaid subscription was call landline and other cellphones. My operator of choice at the time, Telia, initially didn't allow sending SMS - only receiving them. For that to work with Telia you had to sign up for a bill-based subscription paid monthly. Of course, you also had to be 18 years old or above that age. Things were very different back then from how things are now. The most significant difference is that the average Joe did not see the need to own and carry a cellphone with them everywhere they went.

Since I belonged to the early adopters, from time to time I always heard from people when they saw I possessed a cellphone, "why do carry one of those? what's the need anyway?". It was as strange for them as carrying a tool with you such as a hammer for no obvious reason. For me it was all about learning the technology and getting used to the features, menu systems and things like that. I kept up to date with which models Nokia and Ericsson had in stock for both standard consumers and business users. As months went on, I noticed around me how other people more and more were getting exposed to cellphones and considering to get one of their own. Numbers of subscribers grew and so did the coverage with GSM 900 cell towers around the country. Call rates were high up in the sky but it didn't scare off regular people to call from their cellphone. The convenience and status it meant to own a cellphone made up for the expensive bills it seemed.

2001 - the year we made contact from cellphones
As I remember it myself, 2001 was the year when people in Sweden and Finland had accepted the fact that cellphones were simply part of our everyday lives from now on. There was this documentary on television that confirmed this as well. They claimed that the success in Finland came from the fact that they are seen as shy people, so a phone call was more comfortable than meeting someone in person. I do not know to this day if that was the reason for the success over there, but here in Sweden I have a theory about how the idea of having a personal phone with you everywhere was an advantage not because it meant fewer person-to-person meetings, but rather an advantage in the sense you could be reached even if the household landline phone was busy. Also, being able to call someone directly in a more private manner rather than calling the family household phone and asking the person answering the phone, "may I talk to ?".

2004 - The price wars
After the market penetration got high, startup carriers/operators wanted to take part of the potential profits out there, steal some market share from the leading companies. How do you steal customers from a competitor? The most common method is to compete in price, so they did! For me, the most fascinating thing was not that the prices fell lower and lower, but that they fell lower and lower for so long! When you thought they had hit the bottom low, another competitor set it even lower. This kept on for TWO YEARS in a row, as far as I can tell! Not until 2006, last year, did I see the market stabilize around the prices.

What happens next?
In a market where there are enough competitors already and hard to squeeze prices (as profits is a sensitive thing), the only way to compete with better prices is to offer something new. The first serious attempt I have seen in this area is X-series™ from Three, which is an operator that operates services over 3G and HSPA (3.5G) networks. Even though they target mobile internet customers, the bundle includes Skype calls, too. This means you can initiate and receive calls for a very attractive price. You can expect more telecom companies to start offering either same or similar services in the future, if they see a need to get a piece of the market there.

I follow the telecom market closely every week. If you're interested in updates on the industry as it is today, you can always go to places such as Google News and search for HSDPA. For an insight of the progress of 3G networks, I suggest searching for HSUPA instead, as that will be the missing piece of HSPA in 3G technology.