BMI-TechKnowledge`s "Future of Mobile Solutions and Applications in SA" report states that GPRS is expected to cannibalise SMS service revenues and will compromise around 20% of mobile data market revenues by 2007.
Brian Neilson, BMI-T research director, says while applications based on SMS and WAP are widely adopted and provide the bulk of revenue opportunities, businesses using the technology and the cellular operators will need to make hard decisions about promoting GPRS.
"GPRS services, launched in 2002, are not yet being rapidly adopted, but BMI-T believes it will take off in 2004. Part of this growth will be facilitated by users connecting their notebook PCs to the Internet using GPRS instead of circuit-switched cellular dialup," says Nielson.
"GPRS will also begin to cannibalise SMS service revenues as long-text messaging is substantially cheaper when sent via GPRS," he says.
A key requirement for cellular operators will be to provide a sophisticated billing platform that will facilitate charging for third-party content as opposed to only charging for bitstreams, Neilson says.
A further need, which equipment providers such as Nokia are actively working on, is for digital rights management on content, to prevent copyright abuse of the type that is currently occurring in the wired Internet space with music file sharing.
In order for the cellular operators to stimulate demand and recoup the R500 million each they have spent on launching GPRS, Neilson says it will be necessary to promote the service by lowering the pricing of content exchanges (eg pictures) between individual subscribers.
"Sectors such as banking, retail and private security, among others, are rapidly adopting mobile solutions based on cellular networks, while wireless LAN technology is proving to be of strong interest for companies seeking wireless remote access to corporate applications and wireless Internet access in general."
However, Neilson says wireless LAN is still looking for a substantial revenue model. "Looking to the future, SA is still a broadband desert, even in the wired world, which provides opportunities for services, including mobile data services based on fixed wireless technologies.
"However, broadband on cellular networks is still a long way away in this country, and customers will need to look to fixed wireless solutions from the likes of Sentech in the interim, and a variety of semi-mobile offerings."
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