3G - just hype, or technical revolution?
'Hey Zohar! How are you doing?" asked Tomer Ben-Aharon, head of the technical team at Cellcom, via video phone.
Zohar's disheveled, balding head bobbed on the two-inch screen of the Sony-Ericsson Z1010 held by Ben-Aharon, as I looked over his shoulder.
He was demonstrating Cellcom's new third-generation (3G) technology, launched with much fanfare at Tel Aviv's Nokia Stadium last Thursday. Zohar was our laboratory rabbit.
"Where are you, Zohar?" he asked.
"I'll show you where I am."
Zohar switched from the digital camera pointing at his face to the one positioned on the back of the handset, showing the clutter on his desk.
"Here are your children and your wife. What terrific pictures!" said Ben-Aharon, feigning excitement.
"3G" is a nebulous term. Generally speaking it refers to cellphone operators' new level of technological capabilities after advancing from analog phones first generation and simple digital phones second generation.
Despite the ambiguity about exactly which applications constitute 3G, there is a consensus that video calls are 3G.
So far, Cellcom is the only operator to offer video calls to the general public. And this is limited to the Tel Aviv area.
By the end of the month, the Hod Hasharon area will be included.
The Z1010, which weighs 144 grams and, when closed, is about 10 centimeters long, 5.5 centimeters wide and 3 centimeters thick, is selling for NIS 5,400 in 36 monthly payments.
Cellcom also offers content, which, unlike the video calls, is available all over Israel on its Nokia 6230 handset, as well as the Z1010.
Via its huge server, Cellcom offers clips and previews of local TV programs.
In addition, its customers can tune in to the Music Channel and the Fashion Channel.
Channel 2's televised news briefs, updated several times a day and produced especially for cellphone viewers, are also available.
Partner, a subsidiary of Orange, launched a trial version of its own 3G network last Tuesday to 1,000 select customers, free of charge. The price of the Motorola A835, Partner's chosen handset, has not been determined yet.
Pelephone plans to launch its 3G network, based on EvDO (evolution data only) technology in August, said Gil Sharon, deputy CEO.
EvDO enables very fast downloading (2.4 megabytes a second compared to 384 kilobytes a second on Cellcom's and Partner's Universal Mobile Telecom System). But its upstream loading is much slower, just 144 kilobytes a second. This asymmetry makes video calls impossible.
But Sharon is not worried.
"First of all, when we upgrade our network in another year, we will be able to provide video call. But I doubt video call will ever become very popular. Most people prefer not being seen when they talk. And it is very difficult to photograph and talk at the same time.
"Besides, it is very expensive. Video calls take eight or nine times the capacity of a voice-only call. So, a five-minute call will end up costing around NIS 20 instead of NIS 2.5."
Sharon said Pelephone is focusing on content. He expects 20 percent of his 2 million customers to be hooked up to 3G within two to three years.
"In South Korea, which also uses an EvDO network, after one-and-a-half years, 12% of about 40 million cellphone owners use 3G."
A technically inclined friend whose opinion is more objective than Sharon's, agrees with his prognosis about the video call. But he feels the same way about the other 3G technologies.
"There are some terrific toys and gadgets available thanks to 3G," he said. "But there are no killer applications." A killer application allows you to do something that you could not do before.
I got the same feeling as I sat watching Ben-Aharon show me what Cellcom's 3G has to offer. The only application that looked appealing to me was wireless access to hi-speed Internet by using my handset as a modem. But wireless modems that provide the same application are available.
Nevertheless, over the next two years the three companies will have to spend NIS 400m.NIS 600m. to roll out their respective 3G networks.
Pelephone has already invested about half of this, so it will have fewer expenses than its competitors.
There are also depreciation costs. Investments in 3G will be depreciated over the next seven years.
Analysts are skeptical about returns on investment. Many say the cellphone operators are investing in 3G so they do not risk being left behind. The rationale is that even if consumers may not end up using 3G, operators have to show they are working to give them the option.
Sharon admitted that besides South Korea and Japan, there are no other markets that have rolled out 3G. "Israelis have always pioneers when it comes to hi-tech," he said.
Ben-Aharon said that Cellcom made no market studies of its 3G products. "We just tried them out on Cellcom employees who have no technical background."
Cellcom employees are far from an objective market sample to use to test Cellcom's technologies. But it seems that does not bother Cellcom. It has already made up its mind. So have Partner and Pelephone.
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