Historical Background





The Future

Final Thoughts


Final Thoughts

Since the introduction of Cellular Mobile Communications in late 80s early 90s, the number of users and the amount of traffic have multiplied beyond all belief. To keep pace with the increase, both the Telcoms Manufacturers and the operators have had to invest enormous amounts of effort and money in developing and installing new systems and technologies.

Initially, speech was the only service provided but with the advent of the Laptop PC and the massive increase in the use of email, data transmission started to become a significant proportion of the traffic. The need for the mobile Internet is now the main driver for the introduction of new services and consequently the development of new technologies.

So what does this all mean to the User, the Operator and the Manufacturer. In the following paragraphs, I will look into just some of the important aspects of each of these categories.

The User
Users have become use to relatively fast connections to the Internet and Intranet using fixed lines from the office or their homes. Business people on the move want to be able to connect to their company email system from remote locations such as airport lounges and usually do not have a lot of time in which to do it thus speed is of the essence. GSM offered a solution but only at an effective data throughput of about 1.5 kbit/s. Using such programmes as Microsoft Outlook, this meant that you could spend up to half an hour downloading your emails and this quite often was insufficient and did not allow any time to actually send any emails, just collect incoming mails.

EDGE was the next evolution to be developed and that is projected to give the user a download throughput of up to 160 kbit/s. However, once take off the transmission system overhead and the error correction function, the effective rate reduced significantly but ended up at about the same as you could expect from a 56 kbit/s modem on a fixed network. For most business people this would show an enormous improvement but was still not considered fast enough. GSM/EDGE had reached it’s limit as far as speed for data transmission was concerned and thus the development of WCDMA or 3G WCDMA or 3G as it is commonly known, is projected to offer the user data speed up to 2 mbit/s but those speeds are still sometime away.

Will this be enough for the user, I doubt it. However, it will be cost that determines how fast the user will be able to go and what service packages are offered for with operators changing the charging principles from time to data throughput it could become extremely expensive for the ordinary, non business user who will be the numerical majority.

The Operator
Users will want faster and faster data speed and more specialist services. The Manufacturer wanting to sell new technology and having to recover all their development costs in as short a time as possible to satisfy their shareholders. Finally the Government charging exorbitant amounts of money for new licences and the use different parts of the radio spectrum.

The recent sales of 3G licences in the UK gave the Governments something in excess of 6B which the operators have to pay in advance. On top of that, they will have to install a totally new infrastructure which means not only new Hardware & Software but also the acquisition of new cell site locations, for WDCMA will require more not less sites in order to offer good coverage at high speed. For many years to come, the existing GSM service and infrastructure will provide the main revenue for operators and this why they need to go for UMTS. This will allow the operator to determine what service the user needs, speech, text messaging, low, medium or high speed data transmission and then allocate the user to the appropriate technology for the service they require (GSM/EDGE/WDCMA).

The Manufacturer
The cost of developing new technologies is enormous, both in cash and time. Once developed they have to be tested so not only does the manufacturer have to develop the infrastructure but also the MS. The MS market is extremely competitive so the potential for profits from this market are not going to be as great as one would expect so the to cross subsidisation of profits will be less.

Another problem faced by most of the major Manufacturers is that when they try to sell their systems to operators, they find that they have to finance the deal as well. This is because the operators are cash limited due to the large amounts of money spent on acquiring the new licences and spectrum. Some operators have negotiated deals where the manufacturers will only start to get paid once the new service starts to make a profit and that could be many years. The high cost of licences and frequency spectrum is being sited as one of the major causes in the current downturn in the Hi Tech shares.

The Winner
So who is the real winner. I would say the Governments for they are in a win, win situation. They made money on the licences, they make money of the operators profits and they make money by fining operators who do not provide the contracted quality of service required by the Regulator. (Personal Comment)


Print Article