Title: “Marketing on 3G mobile communication services.

The case
of Greek mobile user.”

Papageorgiou Charalampos and Chalikia Vasiliki

E-mail: Charalampos.papageorgiou@vodafone.com, x_vaso@hol.gr

Abstract:

In recent years there was a global growth in the number of the mobile handsets, as
they represent a new way of communication between people. We have a continuously
improving wireless infrastructure and the internet through mobile handsets starts to
grow-up. The demand of mobile services has risen and the mobile devices have
become a part of most consumer lifestyles as an easy to use communication tool.
Mobile communication industry is moving toward 3G services. The development of
3G services are main case for mobile manufacturers as well as for 3G network
operators. The marketing activities should be cautiously considered for the mobile
communications companies in order to take advantage of the new market
opportunities that 3G services offer. Next generation services will create a powerful
new source of competitive differentiation.
It has to be remarked that mobile owners used to upgrade their mobile handsets.
This paper provides and analyzes a survey on 220 Greek mobile handsets owners and
their aspects and attitudes through their buying behavior. Its about the mobile handset
ownership and purchase frequency. It’s a research to identify how familiar the Greek
users are with their mobile terminals, how interested they are with the mobile internet
and if Greek consumer motivate from the 3G services to make a new mobile purchase
decision.

Keywords: 3G services, mobile communications, 3G marketing, mobile market,

mobile user behavior

1. Introduction
1.1. Background
The first mobile phone was used as a car phone in the USA in 1973 by Motorola’s
Martin Cooper. Nobody expected then, that the mobile phones would rise so much
today. Cellular phones are 30 years old and the phone subscriptions are increasing
all the time. Nowadays, more and more people, of all ages, have their own mobile-
phones. The first internationally roaming cellular network standard was NMT
(Nordic Mobile Telecoms), introduced in 1981 through Scandinavia and the first
digital cellular network GSM (Global System for Mobile Communications) was
opened commercially in Finland in 1991 (Ahonen et al., 2004).
Mobiles have gone through several stages of technology. First came the so called
first generation (1G) phones, with the basic service of making voice calls. Afterwards
the second generation (2G) phones appeared providing voice and data and bringing
the internet to users mobile phones. It was not until 1994 that the success of the SMS
(Short Message Service) surprised the telecom industry. For some segments, youths
in particular, SMS had become the killer application. Young ones wanted a mobile
phone not so much for calling someone but for the ability to send secretive messages
to their close friends and connect with their buddies, their personal communities
(Ahonen et al., 2004).In that period the Wireless Application Protocol came through
also, that brought the internet with the monochrome screens and low speed
connections. The first WAP telephones and services have been introduced on the
Swedish market. However, according to keiichi Enoki, leader of the i-mode project
team: WAP failed (in Europe), because operators concentrated too much on the
technology rather than the content. It is like worrying about the quality of television
sets before you have any programmes (Nakamoto and Roberts, 2001). In 1999 in
Japan, NTT DoCoMo’s wireless data service I-mode is a great success.
The development continued when GPRS was launched on the Swedish market,
allowing for more reasonable prices and higher bit rates (Ericsson, 2000). GPRS is
considered as 2,5G technology and it allows higher data rates than 2G without the
need to establish a dedicated end to end connection with the network. Instead it
utilizes the concept of packet based session which resembles the Internet based
communication. In the end user side, GPRS terminals were brought with many
advanced features to encourage Mobile Data usage such as such as color screens,
polyphonic sounds, cameras etc. The development of GPRS (General Packet Radio
Switching), is the first and the most significant step towards the so called next
generation of Mobile Communications, i.e. 3G services. As a convergence of mobile
telecommunications and data networking GPRS brings IP-based services to the
mobile mass market (Nokia, 2001).
Finally the continuously improving wireless infrastructure provided third generation
(3G) phones with UMTS (Universal Mobile Telecommunications System). 3G
mobile terminals can receive and make both voice and data. Furthermore 3G
networks promise faster speeds in the Internet connection, the video calls, video
clips, the local content etc. Japan is the first country in the world where two kinds of
(3G) technologies are being introduced. Many operators are wondering which way
to go. Now they can make a judgment based on how it turns out (Guth, 2002).
Except of UTMS, there are many other 3G networks with different technical
specifications that have been adopted from other countries such as FOMA from
Japan and CDMA 2000 from USA. The key players in telecommunications industry
are equipment manufacturers (device manufacturers), software manufacturers,
telephone operation companies and the most important network operators. All the
above companies from the telecommunication industry must consider for their
marketing activities in order to take advantage of the new market opportunities, what
3G services offer.
1.2. Greek mobile communications
The Greek mobile communication services sector is the fastest growing sector in the
Greek Telecommunications market and it is one of the most dynamic sectors of the
economy. Currently, there are four GSM (www.gsma.org) mobile network operators
while three of them have obtained a 3G license with the obligation to launch
commercial UMTS (www.3gpp.org) network in year 2004: CosmOTE
(www.cosmote.gr), Q-Telecom (www.qtelecom.gr), Telestet (www.telestet.gr),
Vodafone (www.vodafone.gr).
Actually, the acquisition cost for UTMS license was very high. Also, companies are
invited to step-up their equipment, in order to satisfy the needs for offering 3G
services. So the return of investment in 3G services for the companies will come
when the consumers adopt those new services.
Today most young users, use GPRS for downloading just ring-tones and games and
not other better services that GPRS offers to them such as MMS or information
services. Many years will pass until users will start using all the new services that
will be offered with 3G. Most of the companies, not just in Greece, expect high
growth of 3G beyond 2010.
The first public presentation for 3G mobile communication services in Greece was
provided by Telestet (TIM) in September 2002. The first 3G services that were
tested in Greek market at the ends of 2003 were the high speed in Internet with 384
kbps, high speed MMS and voice calls in a UTMS network. Before the publication of
this study all three Greek companies were offering 3G services in Athens area,
including advanced services such as Mobile Video Telephony and high-speed data
access.

2. Literature Review
2.1. 3G technology overview
The market demand for 3G is a fundamental part of the overall picture; the best way
to assess that demand is by looking at developments in the 2G space, and at the
growth of data services and mobile Internet access technologies in particular
(Goodrick and Srivastava, 2002). 3G is the most recently developed mobile
technology, providing advantages over the previous technologies in terms of
bandwidth, packet routeing, guaranteed quality of service and location-based services
(Cellular-news, 2000).
The precursor of 3G services is the mobile internet but not just it. DoCoMo
positioned i-Mode as a “unique mobile experience”. Many 3G services will not be
internet-based but they will be truly unique mobility services. The mobile internet is
a priority for the 3G services providers. Positioning the 3G services as the “mobile
internet” sends the wrong message to the market and paints an incomplete picture of
3G service potential (UTMS Forum, 2000).
Mobile phones may seem to be simple devices made mostly of plastics but they are
really composed of several different parts. While consumers were using very small
and light weight mobile handsets, now with 3G services the new colour screens,
cameras, etc. the gauges of the mobiles will change again.
Video phones will become more and more popular with UTMS offering a range of
services. In the not too distant future all UTMS phones can be expected to include a
digital camera for either still or moving pictures (Ahenon et al., 2004).
The 3G terminals therefore plays a critical role in the adoption and attitudes to
modern mobile services. Also the first thing that a user sees when opening the
mobile is the portal. The portal is how the user experiences the mobile service
offered and the portal is the service provider’s way of establishing its brand. (Ahonen
et al., 2004).
According to UTMS forum (2001) there are five types of portals: Mobile
intranet/extranet portals, customized infotainment portals, multimedia messaging
services portals, mobile internet portals and location-based services portals. There
are many differences and points in comparison with web portals. Mobile surfing or
“murfing” is very expensive and the user hurry when starting to surf and try to find
the information as soon as possible.

2.2. 3G marketing
The reason that the mobile services are rising is that the mobile handset is more
acceptable for the consumers. Until 1992 it was very difficult to obtain a mobile
phone because of the high prices. Mobiles used to be luxury products. Today the
mobile is a first need product for everyone. Now in Greek market there are more
than 9.000.000 mobile subscribers, so the industry needs to convince existing users to
upgrade their mobiles rather than find new users for buyers.
Marketing 3G is going to be about services which are new and, in many cases, yet to
be designed (Robins 2003). According to Ahenon et al., (2004) the mobile operators
achieved remarkable market success with minimal modern marketing efforts. The
table below shows the evolution of marketing concept in Mobile communications
industry as this developed from 2G to 3G technology:

From To
Technology focus Customer focus
Acquiring new customers Reducing churn
Selling handsets Selling services
Treating all equally Targeted marketing
Minutes of use Lifetime value
Do it yourself Do it with partners
Revenue Profit
Simultaneously paradigm shifts from 2G to 2,5G/3G (Ahenon et al., 2004)

GSM Association is predicting continued strong growth for data services, as long as
we get three key elements right: customer doesn’t have to understand the technology
– it just works, anywhere, on any device and with any application; customer
expectations must be properly managed; and ultimately, the positioning of new
services in the marketplace has to make sense to the user (www.gsmworld.com). To
ensure the success of any mobile communication service, companies must focus on
the experience of the end-user (Nokia, 2001).
When looking at the advanced mobile services arena of 3G and the vast numbers of
customers, segmentation is the only way to deliver targeted marketing activities. The
poorly designed segmentation limits the chances for the company to succeed, while
powerful segmentation will deliver competitive benefits through the organization.
To have a successful segmentation model you must define all existing and potential
customers. In telecoms there are three main segmentation models; by size, by
technology and by billing. The main question for a marketer must be how many
segments should be used. The best is that model, where all customers fit in one
segment and no customer is outside the model. Called market segmentation, this
trend will see a growing number of handsets and services which can be personalized
to an individual’s needs (Nokia, 2002).
There are essentially two types of mobile phone payment packages: pre-pay (or pay-
as-you-go) and contract. To the end-user, 3G services involve hundreds of 3G
services. There is a two-step process in selling 3G services; First the consumer has
to become a 3G client (he has to acquire a 3G terminal and enter a subscription
relationship with a provider) and second is selling add-on services to the customers
who already has a subscription (Ahenon et al., 2004).
In case that a company wants to build a long term supplier-customer relationship it
needs to emphasize on relationship marketing, and salespeople need to focus on
managing customers as much as managing products sales. For example Vodafone’s
goal is best customer satisfaction and in order to achieve that it has created an
independent distribution channel with its own stores were it tries to train customers to
new services. It also has a good customer service department operating on 24x7
basis.
The key point in the best positioning, in the 3G services except the market
segmentation and the target market is the differentiated advantage. Effective
differentiation can be achieved either by having one very prominent, or a strong
enough combination of appealing vectors of differentiation. For high technology
products several basic examples can be presented such as unique features,
measurable benefits (longer battery time), ease of use (portals), improved
productivity, higher performance, unique fundamental capabilities or design.
Nokia’s goal is to build a power brand and keep it on top in her competitive
environment.

3. Methodology
The main topic of the research is what behavior might be expected for the Greek
consumer to occur when 3G services will be introduced in Greek marketplace. The
survey research develops a structure of framework to answer how the Greek mobile
communication users will react to the new 3G mobile communication services.
A questionnaire is used for the data gathering, with questions only relevant to mobile
users. According to the last census on May 2001 by the Greek National Statistics
Services there are 1.519.226 people in the age between 15-39 (15-24 and 25-39) in
the area of Attica’s prefecture. The random sample selection was to 220 respondents
among to 15-39 years old corresponding to 0,015% of the total sample. The
respondents were 42,5 % males and 57,5% females.
The questionnaire consists of four sections. This four-part questionnaire assessed:
Demographic characteristics, General questions about mobile usage, Questions about
mobile handset characteristics, Attitudes toward mobile internet and mobile services.
The set of questions is designed in order to gather data about the research objectives.
For examining a series of attitudes of Greek mobile users the most of the questions
are developed with semantic differential scales. The statistic program SPSS 11.00
for windows was used for the statistics analysis of the gathered data.
The sample was from mobile users that belong to all Greek network operators.
Specifically the 220 respondents were 33.94% from Cosmote, 50.23% from
Vodafone, 14.93 from Telestet and 0.90 from Q-telecom, while the 61,36% paying
with contract and 38.64% was pre-pay mobile users.

4. Research findings
4.1. Mobile usage
The 78,28% of the mobile owners use their mobiles very often to often and almost
2,26% use their mobile phones rarely to not at all. According to how important is for
the users each one of their mobile applications, their answers are as the following
table 1 (the range is for 1 “very important” to 5 “not important at all”).
Mobile applications Mean Std.
Deviation
Sending and receiving SMS 1.71 0.99
Sending and receiving MMS 3.50 1.40
Sending and receiving e-mail 4.34 1.11
On-line connection/ WAP 4.24 1.13
Using of java 4.29 1.09
VGA camera 3.62 1.48
Video recording 3.93 1.40
Organizer 2.69 1.39
Bluetooth 3.50 1.57
Polyphonic melodies 3.11 1.43
Games 3.28 1.36
Table 1: Importance of each mobile application from the user
For the above results it is interesting that is not adventitious that the telecom industry
calls SMS as a killer application. Studying the results of the research we confirm that
this also applied for the Greek market. The most important application is the SMS
with mean 1.71 and standard deviation 0.99, which means that SMS used from the
majority of Greek mobile users.
Its very concerning that about 92% has change at least 2 mobile handsets, while 29%
has change 3 mobile handsets. It is observed that the Greek mobile user changes its
mobile handset with no important reason. Its obvious, from the table 2 bellow, that
the most important reason to change the mobile handset is to occur a new one with
better image/new model (49.8%) and only the 20% change their terminals for better
services. This saws that the mobile is a kind of mode and the consumer buy new
models more in order to be trendy and not depending on the mobile services.
Reasons for change mobile

other reason 10,7

change network operator 2,4

change contract to card (or card to contract) 2,4

terminal offer 10,2

cheaper services 4,4

better services 20,0

better image/new model 49,8

0,0 10,0 20,0 30,0 40,0 50,0 60,0

Figure 1: Reasons for change the mobile terminal

4.2. Importance factors for purchase decision making

The factors that motivate in order to move in a new purchase decision are many.
The importance of these factors to the mobile users are presented to the table 2
bellow from the most important factor to the less important (ranging 1 to 9).
Importance of factors that influence Mean Std.
mobile users purchase decision making Deviation
Mobile applications 2.98 1.74
Price 3.00 1.76
Technical characteristics 3.21 1.76
Image 3.38 1.92
Services 3.50 1.77
Brand name 4.45 1.97
Others (friends, family..) position 7.08 1.98
Advertisements 7.47 1.74
Salesman of the mobile-store 7.58 1.80
Table 2: Importance of factors that influence mobile users purchase decision making

Its observable which is the purchase source before the buy decision making. Most of
mobile users, when they want to obtain a new mobile handset, take information from
other people for their social environment such as friends and family. Both males and
females, as they are presented to the figure 2, have as purchase source their friends
and family rather than any other source (30.78%). Main the mobile magazines
follows with 24.43 percentage.
Also, TV advertisements (15.84%), websites (9.05%), other advertising tools
(3.62%), network operators and device manufacturers (4.52%) keep low percentage.
Even though each of the above has a small percentage, if we consider them in total as
the marketing communication strategy, we can say that it is very important source of
purchase too.
 Purschase source

family/friends
network operators
device manufacturers
websites male
mobile magazines female
other adverts (radio, posters)
TV adverts

0 10 20 30 40 50 60 70 80

Figure 2: Purchase sourse

What the mobile users want more from their

network operators
Very important is what
the users want more
from their network m ore
cheaper on-
operators where the cheaper bills inform ation
line conection
12% faster on-line
74,20 percent care for 37% 2%
conection
better price policy. As 4%
the table 3 in the right
side shows the m ore
services
expectations of the
11%
users from the mobile bigger cheaper
network operators are: coverage packages
4% 30%

4.3. Mobile internet and 3G services

The 56.82 percent of the mobile users have on-line connection with their terminals
but the 40.44 percent of them never use the on-line connection while the 51.69% of
them use on-line connection less than weekly. It has to be mentioned that about 50%
mobile internet users are on-line for games and ring tones and less than 20% use the
other mobile internet information such as news, weather, local entertainment, free
time etc.

It is obvious that the most respondents answered that they are not to sure if they are
interesting or not to the new 3G services. Also the behaviour doesn’t always depend
on intentions to buy or use a product from the mobile users. To the mobile users we
can see that they have mobiles with many technological capabilities and they don’t
use them at all. The only application that they are interesting in is the SMS.
Also for the new 3G services the mobile users are more interesting for video-callings
and local based services and more less for the other services (table 3)

Motivation for a new purchase depend on 3G services Mean Std.

Deviation
Video calling 2.60 1.46
Better on-line connections 3.18 1.47
Video clips 3.35 1.46
Faster MMS 3.25 1.33
Using more than one service at the some time 3.49 1.37
Video conference 3.29 1.41
Local based services 2.90 1.37
Table 3: Motivation for a new purchase depend on 3G services
(ranging for 1=definitely to 5=definitely not)
Finally more than 97% are interesting in the idea to change their mobile handsets
with new ones so the Greek mobile users are ready to change their mobile handsets
even if they are not familiar with the new 3G services.

7. Conclusions
There are many barriers to 3G adoption concerning 3G services themselves. The
mobile users are concerned for many things such as cost, speed, security, personal
data. The question must be not if the consumer will use the 3G services but when
they will use them. According to companies, high growth of 3G is expected to
happen beyond 2010.
For any new technology such as 3G mobile communications services there has to be
a good launch in the market and the adoption of the technology from the users will
follow. The mobile phone industry has invested a lot of money in the technology for
3G services. Therefore the companies must give more attention to all 3G services
and not make boundaries around their interesting through some services. Companies
must encourage existing consumers to purchase new generation handsets and make
regular use of the numerous add-on services. If it does not, the outcome will be a
high degree of convergence among network providers, manufacturers and retailers.
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Useful websites
www.Vodafone.com
www.Telestet.gr
www.Cosmote.gr
www.Nokia.com
www.Ericsson.com
www.Alcatel.com
www.Siemens.com
www.Panasonic.com
www.3Gnewsroom.com
www.unwired.gr
www.3gpp.org
www.gsma.org
www.motorola.com/networkoperators
http://www.nttdocomo.com/corp.htm
www.endersanalysis.com
www.the3Gportal.com
www.wapforum.org

Magazines

Mobile news/ www.kinitanea.gr

Mobile communications international
Computer software, Motor press Hellas