Cellphone operators are under threat
Mobile handsets will be able to sidestep the cellular networks and switch between the various wireless technologies. In addition, the computing power of handsets means people will be able to get e-mail and do online banking on their phones.
"This is the PC of 10 years ago," says Jones.
He says the cellular industry is "going through a lot of stress and transition". Operators have four options. They can pretend they will not be affected ; become low-cost operators; find a niche such as the youth market; or offer some kind of converged service, such as TV over mobile devices.
But even if they embrace change, they have a poor record in getting their customers to use new services. Only 6% of leading global operator Vodafone’s customers use its third-generation service, which allows them to access the Internet via the cellphone network.
Nevertheless the 3G service poses a threat to cellular operators because it allows users to bypass their networks and make calls over an Internet telephony service like Skype – a good way to get around high international roaming fees when out of the country.
Local operators are not blind to the threat. Vodacom Group CEO Alan Knott-Craig said in February he feared Microsoft more than he did rival operator MTN. This was because of the danger that the software company’s operating system would become the standard for handsets, giving the US company control over interaction with consumers.
"He who has the most leverage with the consumer will win the game," he said.
But Jones thinks Internet search engine Google is the technology company that operators are most afraid of. He points out that Google has already become a player in the telecommunications sector because it is establishing citywide wireless Internet infrastructure in San Francisco.
In SA, Telkom looks set to take on cellular phone operators with WiMax, a new form of high-speed wireless technology in mobile broadband and telephony products.
It’s a challenge, says Jones – but also an opportunity.
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