Why 3G won't get you wet

Users expecting a tidal wave of third generation services have yet to see even a ripple from the mobile operators or services...

Users expecting a tidal wave of third generation services have yet to see even a ripple from the mobile operators or services companies. Philip Hunter reports

Third generation (3G) mobile phone networks are no nearer than they were a year ago during the heady days of the auction for the UK licences. The delay has been caused by the global slowdown in the mobile phone industry and unexpected technical difficulties.
For users, this is good news because the life of their existing investments may be prolonged; and operators and service providers are putting greater effort in to adding value to the current generation.
Users need to be on their guard, as mobile operators are under intense pressure to find ways of extracting more revenue from their customers, whether from current or future 3G services, to start recouping the huge outlay on licences.
Evidence of this came in April when Mario Monti, European Union competition commissioner, warned that the commission might act over the high cost of roaming, the term used to describe using a handset from one country to access a network in another.
The commission is determined to act now because it fears competition could become even more sparse in the 3G era, following plans by operators to share their networks to cut costs. Ironically, the commission itself had suggested network sharing as a way of helping to reduce costs and cope with the debt incurred by 3G auctions. But now, says Monti, it has become clear that it is necessary to balance the need to cut costs with maintaining a healthy number of operators.
But operators will be sharing sites for 3G transmission masts, since more will be needed for the higher data transmission rates. "UMTS [the transmission technology for 3G] will need another mast structure," says IBM's head of pervasive computing David McKenzie. "That will not be so easy to deploy given the public's environmental concerns."
A further impediment to the 3G roll-out came with the announcement last month
by DoCoMo, the global flag-bearer for mobile information services, that it was experiencing unforeseen technical difficulties with its 3G network implementation. DoCoMo beat the rest of the world by a year with the introduction of "always on" packet-based data services in 1999 and had been expected to enjoy a similar lead with 3G.
Launch was set for 26 April, but instead DoCoMo revealed problems in obtaining a smooth hand-over as users move between cells and switch from one radio base station to another, so the Japanese 3G launch has been put back by at least four months.
This problem reappeared in BT's Isle of Man 3G trial this month, which had been delayed. But a more worrying issue is the lack of agreement on common technical standards between Europe and Japan. This is likely to compromise the ability of manufacturers to produce reliable handsets that cope with the cell hand-over at an acceptably low price. A common global market is essential to achieve the economies of scale needed to reduce costs.
There is a growing feeling that while 3G services will be important one day, the urgency to deliver services is only coming from the operators out of their desire to generate extra revenues. Concerns over the cost and time to market of 3G services have accentuated interest in 2.5G, involving a migration to always-on packet-based services, which in Europe are based on general packet radio services (GPRS). This will allow messages and information to be sent to users while they are engaged on other tasks and will also make other new services feasible, such as continuous online route advice.
The difference between 2.5G and 3G is in bandwidth. While 3G will support video transmission and multi-channel services, GPRS, with its effective maximum bit rate of about 50kilobits per second (kbps), has the same constraints as current fixed-line modems. However, as McKenzie points out, the fixed Internet really took off when modem speeds passed the 25kbps mark.
But there is a counter argument that far from postponing the need for 3G services, 2.5G will hasten it. It is not so much that 2.5G will whet the appetite for higher bandwidth multimedia services, as that the capacity of 2G GSM networks is severely limited so if and when 2.5G always-on services become popular, the network will quickly be exhausted.
Kim Dennis, vice-president for sales at Softis, which supplies performance management software to mobile operators, GPRS will offer only limited relief and, if 3G is delayed, says users will be looking for applications that are sparing in their use of the precious bandwidth.
One main impact of migration to GPRS, and ultimately to 3G, for IT managers will be the changes in billing, rather than in technology, explains Michael Ohajuru, sales and marketing director at mobile solutions provider Materna. "The telephone bill is readily understood as it is based on time," says Ohajuru.
The exception on the mobile front comes with short message services (SMS), but these are also easily digestible, having a fixed unit charge. "But with GPRS and 3G, billing can be based on content type, volume, network storage, time of delivery and roaming," says Ohajuru. "These are all billing opportunities for the operators and IT managers will need to understand these options if they are to stand a chance of controlling their costs in the 3G and GPRS spaces."
However, Ohajuru reassures IT managers that their current investments in Wap will stand them in good stead for 3G, even if at present it may appear to have been wasted given the lacklustre applications and poor take-up of Wap services by end-users. "Wap is central to both GPRS and 3G, so any investment made can be recovered," he says.
The same applies to SMS, which will continue to be widely used as a message delivery mechanism.
Then there is the matter of identifying new applications that can deliver benefits to enterprises and their mobile users. In the immediate future, it will be the always-on capability rather than increased bandwidth that has the greatest potential, coupled with the ability to locate handsets accurately.
The 3G networks will eventually bring additional benefits, not just by allowing more information to be downloaded, but also through multi-channel services. The latter will allow users to access mapping services while still being able to receive messages and make voice calls at the same time.

  • DoCoMo launches first always-on 2.5G services in Japan

  • DoCoMo's services have five million customers a year

  • UK Government raises £22.5bn for 3G licences, but successful bidders face massive debt burdens

  • Finland does not charge for 3G licences

  • Wap services based on 2G arrive in Europe

  • Always-on services in Europe based on GPRS arrive

  • Licence payments may be deferred to help operators cope with debt
  • DoCoMo announces delay to world's first 3G service

  • DoCoMo reports growth in Japan with 22 million customers

  • 3G services start globally, assuming no more technical problems and investment in infrastructure decreases further.

A silver lining to the 3G cloud
  • The lifecycle of existing mobile investments is prolonged

  • Operators and service providers are adding more value to the current generation.

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