Section 2.1-The Mobile Phone Industry Today
2.11. The mobile phone industry in the UK is dominated by five main network operators- O2 (formally BT Cellnet); Vodaphone; Orange; T Mobile (formally One 2 One) and the newest network provider 3 (Three). It can be very difficult to enter the market, as a mobile phone network provider cannot operate without a license, which is provided by the government, who regulates the industry, and these are limited and costly.
2.12. The continual increase in demand for mobile communications has contributed significantly to the welfare of the UK economy. The sector employs around 164,000 people in the UK directly and indirectly.
The Gross Domestic Product (GDP) of the Mobile Phone industry has a grown significantly between 1993 and today. Table 1 shows that the GDP of the mobile phone industry between 1993/94 and 1998/99 has increased by 400 percent.
Table 1: The GDP of the mobile phone Industry (1993-9) (source: http://www.mobilemastinfo.com/information/history.htm)
Table 2 shows how mobile phone usage has grown over the last 5 years as people have realized how convenient mobile phones are, and also children have seen mobile phones as more of an ‘must have’ item as they have become more fashionable to have. This is apparent in table 2 that shows that people in the UK have five times as many phones today as a decade ago.
Table 2: Number of Mobile phones owned in the UK (1997-2003) (source: http://www.mobilemastinfo.com/information/history.htm)
Section 2.2- Changes since the First Mobile Phones
2.21. The biggest changes that is noticeable when looking at modern mobile phones compared to those of the late eighties is the size. Early mobile phones were big (often approx 30 cm’s high) bulky and due to the type of battery they required to work, they were very heavy so difficult to carry around. They also only worked in 4 small areas of the UK (they now work in approximately 96% of the UK). This all put many people off getting a mobile phone and they were expensive and so out of many normal peoples price range. With all of this in mind, many people said mobile phones would never catch on but look at the way we often think we could not live without them today.
The costs of handsets are not the only thing that has changed over the past 15 years in terms of finance with mobile phones. Now receiving bills is not the only way of been charged for calls that are made and messages sent there are also ‘pay as you go’ tariffs where you put credit or ‘talk time’ on your phone account, which can be done at many shops and then you top up your credit when it runs out. This is suitable for people who do not use their phone often or people who are on a limited budget. Or there is a set price tariff where you pay a set amount ever month- weather you use that amount of talk time or not. This is most commonly used on mobile phones that businesses have purchased for individuals.
2.12. Furthermore, since the late eighties mobile phone technology has improved considerably. In 1994 SMS (text) messaging became available (of which, 56 million are now sent every day in the UK on average), and more recently in 2001 MMS (picture) messaging, WAP (mobile internet, which uses GSM [Global System for Mobile Communication] networks) and colour screens have made mobile phones the accessory to have for young people.
By the end of 2000, there were nearly 400 million GSM users in 158 countries, and this number is expected to grow rapidly to over 500 million by 2005 and over one billion by 2010.
2.13. Phones today also have other accessories that can be very important in a person’s choice of phone. For example, many phones now have calculators on them, which can be useful if someone needs to do a sum quickly; a notepad for reminders and most importantly to some people- games.
If a person is unavailable, they can set up voice mail services so if someone calls they can leave a message to show they called. This is a service that has only been available over the past 10 years and so was not available on the first mobile phones.
Section 2.3- The Impact of Mobile Phones on Society
2.31. Mobile phones have meant that people are now more contactable than they were once, and has seen the start of a new form of communication- the text message, which can get a brief message to someone quickly and cheaply without having to talk to them but they can be sure that they will receive it! People can also send picture messages that can be cheaper than buying film and having them developed or cheaper than the cost of ink if using a digital camera. Mobile phones have therefore made a shrinking world even smaller than before in terms of communications.
2.32. Some people have mobiles now and use them instead of having a landline number, this is because it is cheaper to have one phone than two, and people always know what number to contact you on and so they are more likely to get in the contact immediately with the person they want. 8 percent of households in the UK are now mobile only households (no landline).
2.33. Mobile phones have saved lives on many occasions because it has allowed people to call for the emergency services without having to find a payphone/ landline phone. The time saved by this can on many occasions have been the difference between life and death for an injured person.
2.34. Police and Law Enforcement Agencies have used mobile phones to solve crimes. They can use signals and calls made from that phone to trace missing people or to find out where dead people had been (as in the case of the Soham murders). Phone signals can also lead police to people that are wanted and stop crimes before they happen (for example, Israel can stop Palestinians terrorists before they can deliver a car bomb into Israel). Some people think this is ‘Big Brother’ gone mad and an invasion of the civil liberty of free speech, as key words are sometimes listened for in phone conversations.
Although, on the other hand mobile phones can be a major problem for police services because drivers using mobile phones whilst on the roads, they are more likely lose their concentration on the road and have an accident, possibly resulting in the death of the driver, other road users or pedestrians. This is why a law has just been passed making it illegal to drive whilst talking on a mobile phone with out a hands free kit.
Section 2.4- Government Involvement in the Mobile Phone Industry
2.41. The view of a mobile phone as a fashion accessory has lead to an alarming rise in crime connected with mobile phones, which are now the most commonly stolen item (an estimated 700,000 phones were stolen in the UK in 2001 rising to an estimated 1 million phones in 2002). This is sometimes after violence has been used on the owner to allow the phone to be taken. This is of concern to the government as if crime rises to much they are unlikely to be re-elected into government.
However, in January 2002 BT Cellnet claimed that 60 percent of mobile phones reported as stolen have not in fact been stolen at all, but people fraudulently claim their phones have been stolen in order to get them replaced by newer ones free of charge by phone companies.
2.42. What is the Government doing to reduce mobile phone crime?
A new mobile phone database launched in November 2002 prevents stolen mobile phones from being used on any UK mobile network helping to make them worthless to thieves.
Reporting the number of a stolen phone to the network operator enables it to be cancelled like a stolen credit card. This applies to both pre pay and contract phones. There is also now a law making it illegal to reprogramme a phone's IMEI number (a number that is unique to each phone and helps to trace a stolen phone).
2.43. As well as crime being a related issue, mobile phones also have some health fears, but in many cases, these are conflicting and often not based on complete research, as shown in table 3. This has caused a problem for the government who has a vested interest in mobile phone technology. Not only because it is the one that sells communication providers their licenses and frequencies allowing them to provide a service to mobile phone users, but also, because it is the one that pays for the National Health Service so will have to pick up the bill for treatment if mobile phones are proved to be dangerous.
2.431.
Table 3: Mobile Phones Dangers, against, why Mobile Phones are Safe (Source: http://www.bbc.co.uk/science/hottopics/mobilephones/index.shtml)
2.432. For this reason, the government has invested £7.4 million into on going research into the effects of mobile phone use. In 1999, the government commissioned a group of independent scientists to look into any health threat from mobile phones. In May 2000, the Stewart Report published its findings:
- “There is no evidence of adverse health effects caused by radio wave radiation at current national safety limits. However, gaps in current knowledge mean mobile phones cannot be classed as ‘safe’ yet.
- Radio waves may effects biological cells but this may not necessarily lead to disease or injury.
- Children should be especially careful about mobile phones use. Their skulls are still growing, so it is easier for radio waves from a mobile phone to enter their heads. Their cells are also developing and tend to absorb more radiation compared to adults. This is especially important in brain tissue, as the nervous system is very sensitive during development. Children should only use mobiles for short, essential calls.
- Mobile phone manufacturers must publish the amount of radio wave energy that each handset transmits to the human body, called the SAR value.
- There is no evidence of a risk to the health of people living near to base stations. However, emissions should be monitored, especially near schools.
- All new base stations should be subject to planning permission.
- Drivers should be dissuaded from using either hand-held or hands-free phones whilst on the move”.
(Findings courtesy of BBC Online- http://www.bbc.co.uk/science/hottopics/
mobilephones/index.shtml)
2.44. Network providers have to purchase licenses and frequencies from the government in order to operate their services. This has cost network providers millions of pounds, which has meant that they have been unable to invest as heavily in research and development (R’n’D) so mobile phone technology has developed slowly over the past thirty years.
Section 2.5- Current Market Situation and the Future for Mobile Phones
2.51. Mobile phones have come far since the original large, heavy and featureless mobile phones two decades ago to the small, lighter phones with more features of today. Even though there is of no proof that mobile phones have any threat to public health, the public are still advised to use them cautiously for as limited time as is possible. I think that although crimes involving mobile phones have risen dramatically over recent years, it will now begin to fall as thieves realize that stolen mobiles no longer work!
2.52. As 75% of adults in the UK have a mobile phone, there is little space in the mobile phone market to attract new users, so it is essential for manufacturers to come up with new products in order to get existing users to upgrade their phones.
I think that mobile phones will be seen as more convenient than landline phones and so many people will just have a mobile phone and no landline. This will mean companies such as BT will have to further diversify their products, but also shows that there is likely to be an increase in demand in this area of the market for mobile phone companies to cater for.
2.53. Handsets are going to continue to get smaller, lighter and more discrete, but this in turn could either raise or lower the price of handsets depending on how much demand there is for them.
2.54. Currently, most of the world mainly uses 2G (2nd Generation) phone technology and since the launch of the improved 2.5G in 2001, many people think that demand for 3G phones which have just been launched in the UK.
“Third Generation (3G) mobile phones are about to revolutionize the way we use mobiles. 3G phones will provide multimedia applications from the mobile, including pager facilities, high speed internet access and digital voice reproduction and full motion video combined, thereby offering a significant advance on current technology” (source: Principles of Marketing. Bassington, F & Pettitt S. P382).
The success of 3G phones are reliant of mobile users wanting to upgrade to faster and more flexible phones, however speed is not essential to the majority of mobile users and so 3G phones had lost their edge to 2.5G phones even before they were launched.
If 3G phones are going to succeed, mobile phone companies must make sure that 3G really does make life more flexible and time efficient so it compliments the lifestyles of people today. If 3G technology is successful then I think mobile phone companies will look to move on to even better 4G technology.
Section 3.1- Conclusion
3.11. Mobile phones have radically changed the expectations of society because it has made people easier and quicker to contact. Although with this comes an expectation of crime, both in terms of mobile phone theft and in accidents caused by drivers using mobile phones whilst at the wheel, but more expectations are been put on mobile phones in the fight against crime.
3.12. Mobile phone technology is also changing everyday and so mobile phones are going to continue to improve by becoming smaller, quicker and with better features. This is to be helped by the recent launch of 3G phones (that is if they are a success in the market place and there is enough demand for them).
3.13. Consumers will continue to demand more, but be willing to pay relatively less, whatever the technology, so it is essential for mobile phone companies to continue developing their products (through R’n’D) and selling them cheaper than ever before.
REFERENCES
http://www.bbc.co.uk/science/hottopics/mobilephones/index.shtml. [ONLINE] 26/11/03. Mobile Phone Safety. (Created: 27/03/03).
http://www.guardian.co.uk/online/news/0,12597,837821,00.html. [ONLINE] 27/11/03. 'Hi, I'm in G2'. (Created: 11/11/02).
http://www.mobilemastinfo.com/information/history.htm. [ONLINE] 27/11/03. History of Cellular Mobile Communications. By Mobile Operators Association.
http://www.oftel.gov.uk/publications/research/2003/q12mobr0403.htm. [ONLINE] 27/11/03. Consumers' use of Mobile Telephony Oftel Residential Survey. by Oftel.
Principles of Marketing (Third Edition). Bassington, F & Pettitt S. Published by Pearson Education Limited. (2003). Essex England. P. 282-4.
BIBLIOGRAPHY
http://www.crimereduction.gov.uk/streetcrime10.htm. [ONLINE] 27/11/03. Street Crime Pages for Young People. (Created: 11/11/03).
http://www3.gartner.com/5_about/press_releases/pr2june2003b.jsp [ONLINE] 26/11/03. Gartner Says Worldwide Mobile Phone Industry Experienced an 18 Percent Increase in Unit Sales in First Quarter of 2003. By Gartner.
Is you Mobile Set to Become Obsolete? By Turner, A. The Times (2000) 2nd November. P.2.
http://slate.msn.com/id/2061465. [ONLINE] 26/11/03. Mobile Phone Theft. How Bad is it Really? By Thomas, I. (Created: 31/01/02).
http://www.theregister.co.uk/content/5/23601.html. [ONLINE] 26/11/03. Mobile Phone Thefts Hit Kids. By Richardson, T (Created: 09/03/2002)
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