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

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. 

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.

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.

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.

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.

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.

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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