In areas that already advance their technology, the service quality also become a concern. In the data communication services such as mobile broadband, the incidences occur as customers cannot obtain the promised data rate due to the increasing number of customers using the service at once. In the WCDMA technology, the service quality depends on the number of customers located within the range of a BTS and the distance of customers from the BTS.
The complaints for not able to use broadband access in WCDMA technology happens since the technology has special features of ‘cell-breathing’, which means as number of customers using the 3G access increases, the cell coverage will reduce. This condition calls for mobile carriers respond to upgrade their service into the advanced system. Figure 3 shows the technological roadmap in mobile services where the advanced system will have better number of customers served at once per BTS and the better speed or bandwidth those customers may obtain in data communications.
Figure 3 Technology Roadmap
Source: http://www.dolcera.com/wiki/images/thumb/700px-Roadmap.jpg
This situation is in compliance with the Kotler and Amstrong (218-219) definition on product in which they define product as everything that can be sold to a market for use or consumption of consumers that may fulfill their needs or wants. Since customers may alter their wants or needs, firms may change the features of their products as well.
For example, 3G services of Hutchinson Whampoa is still in the growth stage, which is a stage where a product experience fast growth marked by rapid market acceptance, increasing demands and huge profits. In order to shift 3G services into maturity stage, the stage where a product experiences slow growth since it has reached almost all market that further decreases of profits level in order to maintain the growth, the company must provide mass products that are affordable by their target markets.
- Mobile phone use in Japanese and Australian
- Carriers/Service Providers
Hutchinson Whampoa, a mobile operator in Australia, is a telecommunication company that develops the implementation of 3G in the first time in the world after NTT DoCoMo in Japan. Basically, 3G technology that Hutchinson Whampoa offers is similar to other operators or carriers in other parts of the world where the technology provides more bandwidth than 2G technology does. In telecommunications, more bandwidth means more space for transmitting large amounts of information such as music downloading, mobile games, internet browsing, video call/video conferencing, and video streaming.
The technology can be upgraded into the 3.5G technology that provide speed up to 2.6 Mbps, some operator claims 3.6 Mbps, faster than 3G technology that offer 384 kilobytes per second when a device is stationary or moving at pedestrian speed. Currently, other operator like Vodafone also offer video conference features as the basic service for their 3G product.
- Collectivism and Individualism
One aspect that drives the growth of mobile phone usage is the influence of peers. This refers to collectivism. This situation is similar to the growth of social media like Facebook or Myspace. In Japan and Australia, the different use of mobile services is due to the technology and also the popularity of contents.
Figure 1 Handset features most used by Japanese
Source: Analytica, 2006
In Japan for example, the most popular mobile application is still E-mail, followed by multimedia features and also video calling, this occurs because NTT DoCoMo as the largest operator in the country has launched the 4G services through its FOMA. This situation is different in Australia where 3G technology still dominates. Although theoretically, 3G can also deliver video calling, the lack of smoothness prevent the growth of this large-bandwidth application.
Figure 3 Growth of mobile contents and commerce market in Japan
Source: ARIB, 2010
In other literature, it is find that the growth of mobile applications in Japan also lead to mobile commerce. Purchasing a book, subway ticket are already used by mobile phone, refers to mobile wallet. Figure 3 shows the growth of mobile contents in Japan.
- Technology
Abell model is named after Harvard Professor Derek F. Abell that explains a Three Dimensional Business that can be used to describe a company’s business that substitute the traditional way of looking customer in two-dimensional way (products and markets). According to Abell, his three dimensional model composes of following 3 axes (12Manage. 2008):
- Served Customer Groups that describe the categories of customers. For Hutchison Telecommunications (Australia), this dimension is presented by delivering leading communications and multimedia services to the Australian consumer especially those who already express the needs for hi-tech telecommunication services.
- Served Customer Functions that elaborate customer needs. At Hutchison Telecommunications (Australia), the implementation of this dimension is to deliver multimedia contents that people have never imagined. Currently, the company continue developing attractive contents mobile TV, voice calls and messaging service, streaming and downloading audio and music videos, video call, emails, high-speed internet browsing.
- Technologies Utilized that explain that represents the way to satisfied the needs. In order to cover this dimension, Hutchison Telecommunications (Australia) employ 3G technology that enables the delivery of multimedia services and contents at high-speed (Hutchison Telecommunications (Australia), 2007c).
In Japan, the most-used applications are derived from the fact that the network infrastructure in the country already advanced. This suggests that the users are encouraged to use large-bandwidth apps. According to Broughturner (2007), Japanese especially the youth are common to wave their mobile phone when they enter the subway turnstile. This waving is only applied when people make a purchase, access control to rooms etc. this convenience technology is common in Japan. This so-called mobile wallet applications already subscribed by more than 30 million as of 2007 in which it is projected to reach 50 million by 2010 (in a population of 127 million).
Figure 2 Number of Mobile Wallet in Japan
Source: Broughturner (2007)
However, in recent years, the rivalry between carriers (telecommunication companies) gets more intense since the industry has reached economy of scale that brings down the price of customer premise equipments (CPEs). This situation favors customers that can freely choose service providers that match their needs. Basically, the customers’ needs for telecommunication services compose of three things: attractive services such as mobile internet, reliable products, and low costs.
The three things can be fulfilled by the invention of 3G technology, which provide higher bandwidth than previous generation of mobile phone and the mass production of the 3G handsets and networks that bring the cost down.
In addition, the rivalry between operators in Australian Mobile Telecommunications industry especially regarding 3G services is quite fierce since the incumbent operator, Telstra, also provide 3G services to customer with somewhat similar features such as video conferencing, Internet access, and Interactive application sharing.
Video Conferences become Hutchinson Telecommunication (Australia) main target in addition to information services and communications:
Figure 2 Hutchinson Telecommunication (Australia) Main Targets
- Video Conference is features that all customers may use in order to communicate more effectively with their family, friends, and relatives
- The global economy continues to be strong, and we believe our repeat customer and prospective clients will continue to flourish in this growth cycle.
The greater bandwidth that 3G technology provides opportunity for network and application providers to develop features that run over the broadband network. One of application that grows today is mobile commerce or mobile e-commerce.
The key to success in e-commerce turns out to be creating consumers database together with the persistence to conduct business in hard times. The condition should drive mobile operators to lessen the customers’ burden in following ways:
- Lessen the ownership of 3G handsets by conducting bundling programs with handset manufacturers like Nokia and Sony Ericsson that enable customers to have the handset and the service at much lower costs
- The ownership simplification is also conducted by partnership with financing companies that provide monthly installment when customer purchase the 3G handsets
- Developing rich contents applications to let customers experience several applications run over the broadband network
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