O2 drives data but talks down 3G

4 Jul 2003

LONDON: Mobile data is the key growth area for O2, the company said this week, with 25pc of its revenues predicted to come from the sector by the end of next year. However, the company remained somewhat muted on the topic of 3G.

Following its much publicised launch of a trial 3G network in the Isle of Man, O2 revealed that it has moved on and now has its latest trial network in Ireland. However, this news was dampened somewhat by the assertion of the group’s chief executive Peter Erskine that 3G was still a long way from going mainstream.

“We remain certain that 3G will happen since a lot’s been invested in it. The question is not ‘if’, but ‘when’. The issue is handsets. Handsets delayed the launch of 2.5G and they’ll delay the launch of 3G. The 3G handsets we have at the moment are big, they eat batteries and they’re expensive. We expect 3G to begin to take off in summer to autumn of next year,” said Erskine.

Backing up its expectations for growth, O2 announced a number of new devices to market. The company’s xda is a market leader when it comes to PDA/handset hybrids and enjoys an 80pc market share in this segment in Ireland. What pleases the company more is the fact that average data use on the device is more than three times that used by customers with other devices. O2 thus took the opportunity to announce the xda II, which will be available across the group before Christmas. The new device incorporates many of the features which were absent from the original, such as an integrated camera, Bluetooth and tri-band capability. The device will also feature a removable battery, an internal antenna and will run the 2003 version of Microsoft’s Pocket PC OS. Although no final specifications were on offer, the sample device seen by siliconrepublic.com was also significantly lighter than the original model.

Also in the pipeline is an extension to the range of BlackBerry devices, which will rise to three models, including a colour version by the third quarter of this year. The BlackBerry platform is also being enabled on third party devices such as the forthcoming Nokia 6800 and xda II.

Music is another arena in which the company has identified potential data revenues. The company announced a new music strategy which will see it launch O2 branded personal music players which can be connected to a mobile phone and download music directly from the net. This is following on from a trial which the company worked in partnership with MTV, BMG, Universal, Sony, Warner Music International, AIM and publishers MCPS-PRS. All provided track listings for new chart releases.

The final new development for O2 is a rather ambitious Bluetooth initiative. The company confirmed that it is intending to test a Bluetooth access point for the home which allows a mobile phone to automatically switch over once it is in range. The access point can be connected to a DSL line which allows the mobile user to avail of cheaper costs associated with a landline. The proposed initiative allows for differentiated billing between calls made via this type of connection and calls made over the conventional mobile network. O2 said it would be trialling the technology later this year and it may become a product by the end of 2004.

By Dick O’Brien