Third generation (3G) technology will be relevant to and will significantly benefit the Philippines even though local mobile operators and telecommunications companies remain reluctant to ride on the 3G mobile networks wave.

"It?s just a matter of timing since network operators will eventually need to increase their capacity to offer converged services," said Anders Kager, chairman of the new Global mobile Suppliers Association (GSA) for Asia Pacific and the regional director for marketing of Asia Pacific at Nokia Networks.

"3G is not something around the corner, but something that?s already here. It?s growing faster than GSM (global system for mobile communications) when it was first launched in 1993," he added.

3G is a radio communications technology that creates a "big pipe" for providing mobile access to Internet-based services. It allows faster channeling of large chunks of data and streaming videos.

MORE REALISTIC VIEW

Prior to initial expectations that 3G will fuel "fantastic" applications to emerge, Kager said the industry now shares a more sober view of the technology. "3G is simply viewed as a technology that will help increase the capacity of mobile networks, while driving down costs of data-driven services," he pointed out.

Even though the Philippine government is pushing the technology, Smart Communications Inc. and Globe Telecoms Inc. are fiercely contesting its deployment, saying the local market has no "serious" need for 3G. Kager, however, believes local operators are not moving into 3G partly because they want to maximize their investments in GSM, or 2G networks.

The availability as well as the high price of 3G handsets in the Philippine market is also an issue, he said. Despite these limitations, Kager argued that 3G could rake in revenues for local operators. Considered as the largest mobile market in Southeast Asia, with more than 32.7 million subscribers, the Philippines is a breeding ground for mobile data services, he said, predicting that soon, operators will move to 3G to offer more data services in order to compensate for losses incurred from declining voice revenues.

"3G won?t take off until there is a definite need for higher data," Kager said. "When you have that, you will be able to turn around initial 3G investments in one to two years given a healthy GDP (gross domestic product)."

He pointed out that in the third quarter of 2004 alone, revenues from data services of the top 30 mobile operators in the world, including Smart, hit US$10 billion.

GSA noted that the 3G adoption wave in Asia Pacific would be felt anytime between 2005 and 2010 as the region?s demand for wireless services grows.

While countries like Hong Kong, Australia, China and Japan are expected to be the first ones to embrace 3G technology, countries like the Philippines, India and Thailand, whose markets are expected to reach saturation point in terms of subscriber growth, will be able to view it as a new revenue stream.

Citing current GSA figures, Kager said there are now 67 commercial 3G networks running on WDMA (wideband code division multiple access).