Internet radio may just be killer app for 3G

(Business World (Philippines) Via Thomson Dialog NewsEdge)With the present hoopla on video streaming over third-generation technology or 3G phones, local operators have overlooked one potential killer application that could likely generate commercial success: Internet radio.

3G handsets with Internet radio can stream radio programs from any Internet radio station or "podcast" site across the globe.

Podcast files are multimedia files - audio or music video - distributed over the Internet by individuals or organizations for playback on mobile devices and personal computers.

Worldwide, meanwhile, there are already over 10,000 Internet radio stations. A number of domestic radio stations already broadcast on the Internet, and purely Filipino content is even broadcast over the web from foreign sites.

"What I think will be a hit is 3G internet radio. It would be great if you can access your favorite radio, news, or sports station on your mobile wherever you are and at near CD audio quality," Richard Dagelet, chief executive of eScience Asia Pacific, told BusinessWorld.

Now headquartered in Australia, eScience is a homegrown software and system integrator company. Mr. Dagelet said the volume of radio programs on the Internet is more than enough to satisfy anybody's interests, even audio streams of games for sports enthusiasts.

"If these can be accessed at an affordable price it can be a really good service. To make the 3G Internet radio experience more interesting, you can include some form of interactivity and present technology into the player so others can see what radio station you are tuned-in," he said.

Pricing options for Internet radio include fixed prices for the content, instead of payment per kilobyte of data streamed.

"Maybe placing a cap on the number of hours of radio streaming a user can do each month, and just paying a fixed monthly fee for the service is an optional business model," Mr. Dagelet said.

Locally, Smart Communications, Inc. is the first to pilot 3G, hawking movie and television series snippets and video calling The company has a flat rate of P10 per 30 minutes of video streaming.

Rival Globe Telecom has followed and claimed that it has overtaken Smart with the launch of so-called "3.5G" with HSDPA or High-Speed Downlink Packet Access. Also designed for internet browsing and video calling, its offer is claimed to have the fastest mobile broadband speed in the market - up to 4x faster than residential DSL and as much as 25x faster than dialup. Globe is charging P0.15 per kilobyte for internet browsing and P15 per minute for video streaming.

But Mr. Dagelet said video streaming will not be as successful because the mobile phone screens are still too small for long periods of viewing. "This is aggravated when viewing it in a moving vehicle like a car or bus," he said. Also, images in video calling services are currently blurry.

"Video calling is also not the 'killer' 3G app most expected as we have seen in the initial rollout of 3G in other [more developed] countries," Mr. Dagelet added.

Particularly, he said women in other countries don't even turn-on their phones' video calling features because they don't want to be seen not looking at their best. And historically, video calls are mostly used by parents or grandparents wanting to see their grandchildren.

In general, Mr. Dagelet said 3G will help mobile services that were not technically feasible on previous technologies because these could not provide enough bandwidth and latency, or how fast the handset connects to the host.

Smart President and Chief Executive Napoleon L. Nazareno, however, said prospects are bright for their 3G internet browsing and video calling services. The company has so far shelled out some $60 million in investments, covering 1,000 base stations.

"It is not so much about the profitability but it is more about the acceptability by the consumers that is why we started of with free usage [of video calling]," Mr. Nazareno said in a recent interview.

Smart said usage for its peer-to-peer mobile multimedia messaging service (MMS) has gone up 65% since it lowered its MMS rate significantly last May 1, simultaneous with its Smart 3G commercial rates announcements.

MMS is a technology that allows users to create, send, and receive text messages that also include images, audio, and/or video clips. MMS messages are sent from one mobile phone to another, or to an email address.

Rates for MMS across all Smart subscribers have been set at P1 per message for Smart-to-Smart messages and P2 per MMS for Smart to other operators. Before, the rate for MMS was P5 per send.

"Smart 3G services complement our regular text and call service, allowing subscribers to have more means of communication at their disposal. Now that our subscribers are experiencing richer multimedia interaction, we are making basic multimedia messaging more affordable for everyone through our reduced MMS rates," said Menardo Jimenez Jr., Smart wireless consumer division head.

In a previous interview, Globe head for wireless business Ferdinand dela Cruz said potential entertainment content for 3G mobile phones includes news updates for business users, music tracks for audiophiles and sports clips for athletes and sports enthusiasts.

He said Globe's 3G offers will likely be marketed for "high-end and distinct" subscribers to whom "office mobility is critical, and tech-savvy consumers who put premium on mobile solutions that allow them to access the internet or private networks on-the-go."

"Recognizing general Filipino entertainment preferences, there will probably be significant demand for movie and television series snippets. Globe is relatively high-end, high-spend postpaid subscribers, keen on synching up to the latest and best-of-breed mobile technologies," Mr. dela Cruz said.