GPRS will not break even until 2009-2011

The capacity, device and application challenges that GPRS (general packet radio service) faces will result in lower revenues than mobile operators are expecting, predicts Gartner Group.

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By  Zoe Moleshead Published  June 10, 2002

The capacity, device and application challenges that GPRS (general packet radio service) faces will result in lower revenues than mobile operators are expecting, predicts Gartner Group.

The research group believes that a lack of applications is hindering the uptake of GPRS. GPRS is currently suited to business-to-consumer (B2C) applications on mobile phones and niche business-to-employee (B2E) applications on PDAs and laptops, says Gartner.

"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 operators to develop their networks to provide adequate coverage for consuner-based applications, and anticipates that an additional US$ 9 billion needs to be spent to ensure adequate network support by 2005.

Although, operators are set to reap revenues of $2.5 billion from GPRS in 2002 and hit $32 billion by 2005, Gartner believes that within the 2002-2005 timeframe, GPRS revenues in Europe will fall short of expectations by 50% and in other regions expectations will be 40% below par.

"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."

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