Singing the praises of a ministry's procrastination
Last month, the Communications Ministry was supposed to decide on the form of the tender for four third-generation (3G) mobile licenses that would propel Poland into the mobile internet age. The ministry said it would hold the tender this year and issue the licenses in 2001, but first had to decide whether to auction the licenses to the highest bidders or hold a beauty contest and award them to the companies with the best financial resources and technical expertise.
Without further notice, the decision has not been rendered. But regardless of the reason for the ministry's procrastination, Poland's mobile operators should cross their fingers and wish for a longer delay.
All three operators Polska Telefonia Cyfrowa, Polkomtel and PTK Centertel have recently started offering a Wireless Application Protocol (WAP) service that allows cellular phone users to view text-based information on their mobile handsets.
WAP has indeed arrived, but as in the rest of Europe it has not yet had time to live up to expectations or prove popular enough to generate profit. Although opinions are mixed as to whether WAP will be embraced by mobile phone users, its introduction will provide a useful and much-needed litmus test for the future of mobile internet services in Poland, including 3G technology in the form of Universal Mobile Telecommunications Systems (UMTS).
A full-blown hybrid of mobile and internet functions, UMTS will deliver video capabilities with high-quality sound over mobile networks. Users will be able to watch live broadcasts, record and send video clips, surf the net and go on e-commerce shopping sprees. But the implementation of 3G technology has yet to take shape in Europe, where it's still in an embryonic stage.
The costs of implementing UMTS also remains to be seen. There's no doubt that upgrading mobile networks, building new base stations for faster transmission signals and switching on the new service will demand huge cash outlays from operators. For users, the fancy handsets outfitted with mobile phone capabilities, screens, keyboards, built-in video cameras and ear pieces will also be pricey.
Amid the fanfare surrounding the implementation of wireless internet service, mobile operators stand to make big money from their existing subscribers if the new technology takes off.
Still, Poland's mobile operators first need to determine whether people will use data on the go. Without studies or statistics to indicate a demand for WAP and UMTS, however, they are gambling on technological hype.
Whichever form the UMTS tender takes in Poland, the country's three mobile operators will bid for the licenses at any cost. Operators that placed bids for the five British UMTS licenses auctioned in April, for example, forked out a total of £22.5 billion. Like their European counterparts, Poland's mobile operators run the inherent risk of being unable to recover the money they invest in the licenses if the UMTS experiment fails here. The windfall of landing the coveted UMTS licenses could financially debilitate them.
Therefore, a further delay in jumping on the 3G bandwagon would be a smart move as both WAP and UMTS may prove to be expensive and unpopular ways to go online. Poland would be wise to wait and see how UMTS plays out in Western Europe. Then after the ministry makes up its mind on how to sell its UMTS licenses, mobile operators will be better prepared to decide if the licenses will be worth the gamble.
