With most 3G phones currently priced at around US$300, handsets are still relatively expensive for the Philippine market, but the growing thrust now is to bring down the prices which seem to be going down fast, observed Pe'a. 'One thing that would help bring down the price of handsets is the increasing popularity of 3G,' he said. There are currently around 35 million 3G users around the world, with Japan and Korea leading. The Philippines, for its part, is still in the process of allocating frequencies for 3G.

Smart hasn't fully invested in 3G since the NTC has not granted 3G licenses to operators yet. 'The same 2G infrastructure that we have built across the country can easily be up scaled for 3G use,' he said. Smart may, however, have to invest around $300 million dollars in the future, mainly to be spent on the radio side, or more on enabling the 3G phone to communicate with the rest of the network, said Pe'a.

Retail prices could not be disclosed just yet, said Isberto, primarily because pricing and other key marketing issues are still being studied. When asked if there is indeed a ready market for 3G in the Philippines, Isberto said that it depends on whether the market would want to use video calls or videoconferencing. 'The theory behind this, however, is that when you build it, people will use it,' said Isberto.

What may happen, however, said Isberto, is that the market would have a segment of high-end users that are always willing to spend on high-end services for larger data consumption. 'You will see that kind of segmentation becoming more pronounced,' he said. Isberto stressed that 3G will most likely go through the natural evolution path that most new services go through where they begin with the high-end market until the product becomes accessible for the other segments. 'Until we have a critical mass going in that direction, it will be difficult for the technology to gain the economies of scale,' he said.

Isberto added that the issue with 3G is not really the technology but the user experience; consumers would not be concerned about how to use a certain technology but rather about how to use a particular service. 'People don't buy technology, they buy the service; what they care about is whether they get the quality of service they expect,' he said.