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“The Current Mobile Business Model Will Not be Viable in the 3G Era,”

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VoicenData Bureau
New Update

As president, GSM/UMTS, John Hughes is the man for strategizing and implementing a major part of Lucent’s plans for successful migration to 3G. He discusses about the status of 3G, the emerging business model for 3G, and the issues before the 3G fraternity with Voice & Data. 

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What

is the status of 3G? I am not asking about the capability and

applications. My question is regarding the most fundamental

objective of ITU’s IMT 2000–a single world-wide standard?

Will that ever happen?




I am sorry to say this, but not much progress has been made.
There is some international politics involved there. UMTS is

getting to be the standard in Europe and other places where GSM

dominates. America is taking to cdma2000. It seems to me that we

have to live with multiple standards for some more time.

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What is the problem? After

Ericsson-Qualcomm deal, everyone was hoping that it would happen

fast. Ericsson has now changed its position and saying WCDMA

would be backward compatible with IS-95….




That is true. But the problem is that is not enough. The
migration from GSM to UMTS will be smooth. But it may not be so

for CDMA operators. They are not willing to change.

Any other roadblock?



Yes, in the actual implementation of 3G. In many countries the
frequency spectrum that 3G will use is not available. Satellite

and other government agencies are using these. It will take time

to get those spectrums.

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Any guess about when we will see

the early implementation…



You have some

Scandinavian countries trying the UMTS. UK has started the

auction process. Japan is also doing some work. So that part of

the world, which is shifting from GSM to UMTS, will happen this

year.

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What about those, which are not

moving towards UMTS…like say the US?




I don’t want to make any definite comment. But my guess is
late 2001.

In mobile technologies the US is

already delayed. Analysts predict that with WAP, at least 40

percent of the people will access Internet from their mobile

phones in the next four years. Don’t you think the US is

losing to Europe, not just in telecom and mobile but also in

Internet business?




No, I don’t see it as a US versus Europe game. Mobile, by its
very nature, is local. You need to have a lot of local content

in the mobile Internet business.

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That is precisely my point. You

will not have WAP content unless you have WAP. It is difficult

to imagine good WAP services without the 3G technologies…



There are two things I

need to mention. One, the model of Internet business is very

different from telecom or mobile business. You cannot simply run

an Internet business like a mobile business. So just access

technology penetration will not mean successful Internet

business.

Two, as I said mobile is local.

If in India, you want to get mobile content, you will have local

content specific to India. You may use American or European

wireless technologies. It does not



really matter. Yes, I do agree with you that Internet will not
remain only US-specific. It will spread to all parts of the

world.

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You made a statement. Internet

business is very different from telecom or mobile business. Does

it mean anything for the mobile operators?




Oh, absolutely. The current mobile business model–charging for
voice telephony–will not be viable in 3G. It will be more like

Internet. Provide content, multimedia, and advertisement. I will

like to specify three factors that will influence third

generation business. One, the maturity of the industry. Two, the

deployed second generation technology. And finally, the

multinational customers base. For example, India has a vibrant

IT industry. All are looking to India. India can leverage on

that.

One last question. We have been

witnessing a lot of technology companies like IBM, Microsoft,

Lucent, Ericsson, and Oracle getting into setting up wireless

portals. What is the logic? For example, Lucent has announced

Zingo. There is nothing out there at zingo.com. That is true

with many others, who still don’t have anything, except

announcements.




I, of course, cannot comment on others. But Lucent is not into
that business. Zingo is supposed to be a test bed, where we want

to show what is possible. We are not going to compete with the

content providers. We just want to provide the technology

solutions that will make it possible for them to compete.

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