GPRS Is Expected to Fail to Meet Mobile Data Revenue Expectations

With the promise that general packet radio service (GPRS) will significantly boost average revenue per user, GSM (Global System for Mobile Communications) operators are in the process of rolling out GPRS across their networks in Asia, Europe and North America. 

Gartner, Inc. expects that GPRS will fail to meet the revenue expectations of mobile operators, and that it will prove to be a great technological disappointment until capacity, device and application challenges are overcome. 

According to Gartner, GPRS will not meet original expectations due primarily to an application gap that prevents GPRS from being suited for mainstream usage. GPRS is currently suited to business-to-consumer (B2C) applications on mobile phones and niche business-to-employee (B2E) applications on PDAs and laptops. 

"GPRS will have niche success stories as a technology for B2E applications," said Bill Clark, research director for Gartner's networking group. "Businesses will find that GPRS will be most appropriate for applications requiring short, bursty transactions, where time-critical information is a key factor." 

Gartner advises that operators further build out their networks to provide adequate service and coverage for consumer-focused applications. Gartner forecasts that an additional $6 billion to $9 billion in infrastructure investments will be necessary by 2005 to adequately support network loading. These investments are in addition to the $113 billion that operators have already planned for GPRS voice and data rollouts worldwide. 

Operators' GPRS revenue goals worldwide are set to exceed $2.5 billion for 2002, and to total more than $32 billion annually by 2005. Gartner expects the more-aggressive rollouts to miss expectations by up to 50 percent in Europe -- and by up to 40 percent in other regions -- during the 2002-to-2005 time period. 

"In the end, GPRS and other 2.5G data services will succeed only after considerable experimentation with new applications," said Clark. "We expect GPRS to break even in the 2009-to-2011 time frame, long after future wireless services such as 3G are due to be deployed." 

About Gartner, Inc. 
Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has 4,300 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. The company achieved fiscal 2001 revenues of $952 million. 

For more information, visit www.gartner.com