3G WIRELESS: Where Is It Headed?

What

is 3G wireless/IMT 2000? Ask this to ten people who are

concerned with the developments–be it the vendors or operators–the

chance is that nine of them will talk about high-speed data

transmission capability. May be two or three about applications.

And what about the single

global standard that ITU was talking about till a year back? So

much so that the secretary general himself tried his best to

convince both the parties–the WCDMA camp led by Ericsson, and

the cdma2000 camp led by Qualcomm to reach a deal. Though he

could not achieve much, the developments a few days later did

inspire hope.

Yes,

it is the Ericsson-Qualcomm deal. Not only did the two bitter

enemies came together, they vowed to resolve all IPR issues and

jointly work for a global wireless standard. It was more than a

year. The ray of hope has now faded. But there is no despair

either.

Vendors–the prime movers

in this revolution–have decided to put the single global

standard issue at the bottom–if at all–of the 3G agenda and

are talking of capability and applications.

Unfortunately, the ITU has

also stopped championing for this cause. It seems capability and

not convenience is what drives today’s technology world. The

IT-ization of the telecom is complete.

What Is the

Challenge?

Today,

one has to look at 3G keeping in view the ground realities. The

issues that were most important a year back are not even

relevant today, with the broader unwritten agreement among all

stakeholders–except the user, who does not have a voice–that

the world can live with multiple standards. It is imperative to

specify two explicit assumptions, before we go into a discussion

of the challenges in 3G.

One, with America still

not sure about its 3G market road map, UMTS and 3G are broadly

synonymous in a major part of the world.

Two, Internet has

dramatically changed the whole communication business. And it

will have a strong impact on how the 3G business takes off.

There are three broader

challenges, which are global in their character, though regions

like India will have their own challenges. These are: #1

Availability of spectrum globally

There are two battles

being fought here. One is Europe (plus Japan) versus America and

the other is satellite operators versus terrestrial operators.

It is the first, which is in limelight because while the

Europeans are certainly more influential in mobile and

organisations like ITU, the Americans, with their overall

economic dominance hate to take things lying down.

Interestingly, the European lobby has taken a more radical

approach, while the US is still conservative over spectrum

allocation.

The Europeans want

contiguous spectrum allocated in a uniform band globally by all

countries, while the US does not want to release some of the

bands that the government is using. Countries like India by

default become supporters of the US. The reason: both in the US

and developing countries in Asia, 3G will take some time,

whereas many European countries are already going for UMTS.

Prime examples include Sonera in Finland, and the UK licence

bid. They need the spectrum now unlike the US.

Similarly, some 3G band

that the terrestrial mobile operators want are now in the

satellite industry domain and the latter does not want to

release. However, with major projects like Iridium and ICO not

taking off, the voice of the satellite industry has weakened,

even as the terrestrial mobile operators have grown

impressively.

#2 Confusion

about new business and revenue models

Many acknowledge the fact

that Internet’s impact on communications is too much and too

fundamental. No one is even hoping that the revenue model that

works now–charging for voice communication–will work

anymore.

With 3G (read high-speed

data) capability access to the Web, e-mail, local information

service, mobile banking, mobile commerce, etc. will be offered

by the operators. Plain vanilla voice service will be taken for

granted. A cellular service provider essentially will become an

Internet access/content provider. It cannot look at the

traditional cellular business model neither can it borrow the

traditional Internet business model. It has to find some

innovative killer app to succeed. The WAP protocol–which has

seen one of the biggest supporting crowd around for any

technology in recent times–also makes things more challenging

by offering a common, open protocol lowering the entry barrier

for smaller players, and thus lowering the overall cost of the

solution.

While this is a very

simplistic presentation of the challenge, some of the specific

issues make the operator go round in circles to find out the

best services, partners, marketing models, and even the

customers. However, while it will be increasingly difficult to

make money, it will also create new capabilities. Smarter

companies will be driven more by ideas and market awareness

rather than by limitations of regulations.

But for the time being,

there are more questions than answers regarding this.  #3

Availability of handsets

This, on first look, seems

to be a non-issue. But experience shows that the availability of

handsets has delayed services by as long a period as six months.

That is too much time in today’s business.