3g implications for india
TRANSCRIPT
Abstract:
Third generation mobile communication networks (3G) have been heralded as a
paradigm shift that will irreversibly change the structure of the telecommunications industry.
This research paper aims to provide the implications for upcoming 3G technology in
emerging markets. 3G communication has already reached a matured level in many parts
across the globe. Henceforth, the study of the success factors and the hitches faced is
advisable before the launch of this service in a developing market. In this paper, three mobile
markets have been selected to perform the case study of 3G. First is Japanese market which is
considered to be the most successful example of 3G implementation. Thereafter, Korean
market which represents the dilemma between W-CDMA and CDMA-2000 technologies.
Then in the last, the European market which is useful to analyse impact of regulator
interventions and sky-touching spectrum price.
This study found that the viability of 3G in emerging markets will depend on various factors
which will include the technical, social, demographical, and managerial aspects. Based on the
study, this paper proposes implications for rolling out the 3G services in emerging markets.
These implications cover the issues of technological considerations, regulatory bodies,
licensing procedure, market scenario, technology absorption etc. The result of this study can
be helpful for the successful migration to 3G mobile technology, and the implications
mentioned can serve as a means to catch up on the lost time and minimize unnecessary
mistakes along the way.
Keywords:
3G, 2G, FDMA, TDMA, CDMA, W-CDMA, CDMA-2000, TD-SCDMA, mobile market,
mobile internet, QoS, VoIP, ARPU, Value-chain, Paired spectrum, HSDPA
Introduction:
The two biggest success stories in telecommunications over the last decade have been
the Internet and the mobile phone ‘(Lehr, & Mcknight, 2003)’. 3G technology represents the
workbench using which a user can experience seamless connectivity on the go. 3G is
abbreviated “Third Generation”, and is planned and devised for the real multimedia cellular
phones.
However ITU (International Telecommunication Union), which is the organisation
responsible for 3G regulation, has not specified any stringent conditions for data rates. By the
statement: “It is expected that IMT-2000 will provide higher transmission rates: a minimum
data rate of 2 Mbps for stationary or walking users, and 384 kbps in a moving vehicle”
‘(ITU)’, the ITU does not actually clearly specify minimum or average rates or what modes of
the interfaces qualify as 3G. This brings some level of flexibility for operators, service
providers and manufacturers.
The radio interfaces of IMT-2000 are specified in the recommendations by IMT-2000. The
standards accommodate five possible radio interfaces. These are:
W-CDMA, CDMA-2000, TD-SCDMA, UWC-136 and DECT.
Although there are five terrestrial standards, most of the attention in industry has been
towards the CDMA standards (i.e. W-CDMA, CDMA-2000, and TD-SCDMA).
Importance of 3G:
3G provides a medium of convergence between mobile and broadband internet. It
provides very high speed internet access coupled with mobility which will fulfil the high data
requirements in urban and metropolitan circles. Also it provides the best alternative so far to
bridge the digital divide in broadband penetration between the urban and rural areas in a
developing country.
3G network is intended to provide “Always on” connectivity to users. A real “digital era”,
“The age of high speed internet connection.”, “Video phone calls” and “Substitute for
notebook PCs” are common perceptions of the 3G services. The major impetus for 3G is to
provide for faster data speed for data-intensive applications such as video.
Problem Statement:
Analysing case studies of 3G in selected countries and deriving implications for Emerging
markets by means of an implicative research.
Deployment of 3G network architecture requires a huge capital investment from the
side of the service provider. Hence, it becomes a mandate that a study of those nations where
3G has been implemented, should be done so that an appropriate implication for rolling out
3G services can be given.
Research Methodology:
The topic of this research intends to be studied with the means of Multiple-Case
Study approach. Three case studies pertaining to 3G development and implementation have
been done. In each case, each case is organised as per the following framework: Motivation,
Background, Policy Architecture, Industry Assumptions, Decision Making, Post
Decision Scenario and at last, the Implications for Emerging markets from that case.
Motivation describes the reason for selection of that particular country or continent.
Background illustrates the process of mobile evolution to 3G in each case. Policy architecture
tells about the policies and regulatory conditions in each case. Industry assumptions refer to
the expectations that the telecom industry had from 3G. Decision scenario details the
important decisions taken by the government and the companies which affected the 3G
implementation process in some or the other way. Post decision scenario describes the result
of the decisions taken. And finally, on the basis of study and analysis of the case, the
implications found suitable for emerging markets are written.
Table 1:
Country selected 2G standards used
(Before 3G)
3G standards Regulator’s
behavior
JAPAN PDS & PHS
(Closed market in
2G)*
W-CDMA and
CDMA2000
No imposition of
standards by
regulator.
SOUTH KOREA CDMA-ONE
(Single standard)
W-CDMA and
CDMA2000
Operators wanted W-
CDMA whereas
EUROPE GSM/GPRS/EDGE
till 2001**
(open market)
W-CDMA
(till 2004)***
Regulator imposing a
single standard
throughout.
Table 1 : Comparison of cases
Table 1 shows a brief comparison of the three cases dealt in this paper. This will give a broad
idea about the differences in the countries.
* Closed system here refers to the fact that for 2G, Japan used PDC and PHS technologies
which were not used in most of the other countries.
** CDMA service was started in 2001 by Zapp Mobile (Telemobil) in Romania.
*** CDMA 2000 1X EV-DO service operating in 450 MHz band was launched by Eurotel in
Czech Republic in 2004.
Case studies:
I. Case study of Japan
Motivation
In case of Japan, mobile internet market was well established before launching 3G. It
is the pioneer in the successful implementation of 3G technology. Both W-CDMA and
CDMA-2000 standards were used. Hence, Japan represents the case of a “Closed system
deploying dual 3G standards”. Apart from this, it is very interesting to study the business
model of NTT-DoCoMo to see how they have placed themselves at multiple positions in the
value-chain.
Background
The modern era of digital mobile communication in Japan began with the launching of
the 800MHz frequency band in the year 1993. The main technology of operation was PDC
(Personal Digital Cellular) and later in the year 1995 PHS (Personal Handy Phone Systems)
was also launched. Mobile communication market in Japan became a closed market because
of the implementation of these two standards as these two standards were different from those
used in majority of other countries. Though mobile usage increased tremendously after 1995-
96 but the diffusion of internet was sluggish as only 14.4% of the population used the internet
in 1999 ‘(Srivastava, 2001)’.
The scenario changed after the introduction of the mobile internet based service called i-mode
by NTT DoCoMo on February 1999 followed by KDDI and J-phone with their own separate
services, EZ-web and J-sky respectively. This service became highly successful and in 2001
approximately 78% of the mobile users were using the mobile internet ‘(NTT DoCoMo)’.
Fig.1 compares the growth in number of NTT-DoCoMo subscribers of cellular phone, i-
mode, and FOMA services.
Fig. – 1 Evolution of cellular services in Japan
This tremendous increase in the usage of mobile internet services called for higher data rates
and the need for international roaming, which were previously not possible because of the
prevailing closed system as mentioned. This created a need and background for 3G
implementation in Japan.
Policy architecture
To study various aspects of 3G, ARIB (Association of Radio industries and Business)
had established Japanese IMT-2000 study committee in 1993, which, after a lot of study
concluded that W-CDMA was the best suited technology for implementation of 3G
‘(Srivastava, 2001)’. MPT and TTC (Telecommunication Technology Council) were the
bodies responsible for drafting the policies related to 3G.
Beauty contest method of licensing was chosen. No foreign operator entered the licensing
process ‘(Srivastava, 2001)’. The possible reasons for this can be the closed system in Japan
and the unfavourable timeline for deployment set by the regulator.
Industry assumptions
The biggest problem of the telecom operators were the continuous fall in the values of
ARPU (Average Revenue Per User). Also the competition between operators had increased
and the main differentiating parameter between services was the internet services provided by
the operators. Ergo, each operator wanted to provide better multimedia services than its
competitor. Operators saw 3G as a solution to their services requirements and also as a means
to further increase their subscriber bases. As 3G promised more data rates, better services
could now be offered. The aim of the companies was to encourage more and more internet
usage to create a strong revenue generating model.
Decision making
Taking NTT DoCoMo into consideration, they decided to implement 3G using W-
CDMA technology. The popularity of any technology lies in the attractive services that are
offered in it. One of the killer applications given by DoCoMo is content provided by
subscribers themselves and then forwarded to friends and families. Profit sharing model used
by the company in providing I-mode services proved to be a great success and they decided to
adopt the same model for 3G. Most of the profit earned was given to different actors of the
value chain, a model which is quite different from what is followed by other companies
around the world. For e.g.: DoCoMo does the billing for the official content providers but
takes only 9% of the revenue so collected ‘(Lindmark, Bohlin, & Andersson, 2004)’.
Post decision scenario
Choosing W-CDMA standard to provide 3G, NTT DoCoMo faced intense
competition from its competitors. One of its competitors (using CDMA 2000) deployed a
simple infrastructure conversion system which was cost effective and helped the operator to
rapidly expand its network coverage. Consequently, this operator who lagged behind
DoCoMo in 2G overtook the operator in the area of 3G by a great margin ‘(Henten, Olesen,
Saugstrup, & Tan, 2004)’. Profit sharing model as expected proved to be a great success.
More and more content providers were attracted despite the company imposing some
restrictions on them. This resulted into generation of rich contents.
Implication for emerging markets
One lesson that can be learned from the case of Japan is that for mobile internet to be
successful in emerging markets there must be a balanced and efficient mix of industry
coordination, service experimentation, and dynamic competition. In Japan, NTT DoCoMo
played an industry policy role ‘(Lindmark, Bohlin, & Andersson, 2004)’. It was able to
control directly or indirectly all the members of the Mobile internet value chain (system) and
thus was very effective in launching fully coordinated user centric services in the beginning
which provided the momentum for the mobile internet industry.
The terminal market in Japan is the most competitive handset market in the world. This large
competition provided customers with the handsets which made the 3G experience bliss for
them. Therefore in emerging markets too, the terminal industry has to be ready for 3G.
The most important lesson that can be learned from Japan is the profit sharing model used by
the operators. For eg.NTT DoCoMo takes only 9% of the revenue of the content providers as
handling charge. This means that the monopolistic temptation of short-run profit
maximization must be tempered by a more long-run service growth orientation based
approach.
At the time of 3G licensing in Japan, all PDC operators became subsidiaries of one of the
three operator groups KDDI, DoCoMo and J-Phone. The same scenario can also occur in
emerging markets. One important question raised from the case of Japan is regarding the type
of technology used to implement 3G in emerging markets. Will technology opted by operator
decide their performance in the market? Are CDMA operators at an advantage compared to
GSM operators?
II. Case study of Korea
Motivation
3G in Korea was launched very much parallel to that in Japan, but the conditions there
were contrasting. Korea emerges as a good case to study because it describes the effect of
regulator interventions on the implementation of 3G. The regulators got biased towards one
technology which proved to be fatal for the success of the technology.
Background
Mobile phone services in Korea started with AMPS (Advanced Mobile Phone System)
technology in 1984. The sector was highly monopolized until 1994 when it became privatized
‘(Lee, Kwak, Kim, & Kim, 2009)’. The first CDMA service was successfully launched by
SKT in 1996. In 1997, PCS companies also entered the telecom market. After this, the
CDMA-one synchronous mode service was employed for the first time in the world by Korea
in 1998 which proved to be very successful ‘(Hee, 2008)’.
At the end of Feb 2007, the mobile penetration had reached 88.7 percent as compared to less
than 4 percent in 1994. The major players in the market were SKT, KTF and LGT with the
market shares of 50.4%, 32.1% and 17.4% respectively in 2006 ‘(Lee, Kwak, Kim, & Kim,
2009)’.
Policy architecture
The telecom regulatory body in Korea, the MIC (Ministry of Information and
Communication) has always maintained a tight control on the industry and has influenced the
industry a lot through its decisions. After the success of CDMA in 2G, the MIC wanted to
continue the success of synchronous mode i.e. CDMA in 3G. Korea wanted to implement 3G
using CDMA2000 1X because as the world leader in CDMA technology, it was expected of
it. Choosing CDMA technology will also have allowed operators to contribute to domestic
economy as domestic handset manufacturers were pioneers in CDMA technology. All the
operators wanted to employ W-CDMA as it was a global trend and had better market
potential. The MIC decided to issue two licences for W-CDMA and one for CDMA2000 1X.
Only one licence was made available for CDMA2000 1X so as generate maximum bid as
there were three incumbent CDMA operators ‘(Hee, 2008)’. In December 2000 MIC granted
W-CDMA license to the two consortia: SK IMT (Now SKT) and KT Icom (Now KTF).
Shortly in August 2001 the CDMA 2000 1x EV-DV8 license was also given and this time to
LG Telecomm ‘(Hee, 2008)’.
Industry assumptions
There were many assumptions and expectations from 3G as in the case of any new
technology. The first assumption was from the government side that there is a huge need for
the IMT-2000 services which as it turned out was not true therefore resulting in poor take up
by the customers. Also the government expected the investment in IMT-2000 to give further
impetus to the country's economic growth and national prestige as an IT leader ‘(Hee, 2008)’.
Also, IMT-2000 was seen as a means of revitalizing the depressed economy due to the
financial crisis the Korea faced in 1997.The Industry assumed the implementation of 3G
would provide higher speeds so better multimedia services. Also it would have given some
operators the opportunity to improve their global footing.
Decision making
There were many decisions taken by the government and the industry which
determined the way in which the 3G developed in Korea. One was the MIT's decisions about
the technology standard to be chosen for IMT-2000. The government was under pressure
from the operators and the market which demanded W-CDMA as it was the de facto standard
worldwide and had better market potential. But still the government wanted to continue the
CDMA evolution even though the all the operators were more inclined towards the W-CDMA
standard and hence forced LGT to take the synchronous mode license ‘(Hee, 2008)’.
The timing of the introduction of IMT-2000 in the market was one of the important decisions
to be taken by the government as the timing is one of the main factors which decides the
success or failure of a technology or new service.
The operators decided to invest more in the existing network based on 2.5 technologies than
the IMT-2000. This was based on the market analysis done by the companies. Second
decision was to rely on a foreign company, Qualcomm for the core technologies and for
further research. This was the factor on which the future development of the CDMA
technology was based. The decision to move to 3.5G without spending much time at the 3G
stage was one of the bold decisions taken by the Korean government ‘(Hee, 2008)’.
Post decision scenario
The decisions taken by the Government and the industry affected the industry very
much. The unclear policy of the government on the IMT-2000 standards disturbed the
industry a lot. Due to the dual technology market, the handset manufacturers were burdened
to cover the dual-band, dual-mode operations. Also forcing synchronous mode on LGT
proved fatal for the company which finally resulted into abandoning of the license in July
2006 after failure to launch the service in the stipulated time frame. This resulted into wastage
of a scare resource, spectrum.
There was no such heavy demand in the market for 3G services. Also the people were getting
the similar services with the existing CDMA2000 1X (2G) networks. This in turn led to lack
of interest of even the W-CDMA license winners to roll out the services. SKT and KTF used
the IMT-2000 spectrum minimally and introduced the broadband services Wi-bro and Net-bro
respectively only to comply with the contractual provisions with MIC.
3G services had limited availability because of uncertainty about profitability, which caused
delays in network investment. Meanwhile, rapid developments in mobile phone technologies
enabled the Korean mobile telecom market to evolve directly into 3.5 generation (3.5G)
without spending much time at 3G stage. Now, in the new Scenario, HSDPA (High Speed
Downlink Packet Access), CDMA2000 1X EV-DV and Wi-Bro (Mobile Wi-max) are
competing as the 3.5G standards in the market ‘(Hee, 2008)’.
Implications for emerging markets
The most important implication from the case of Korea is that the demand for IMT-
2000 should be market driven and not policy driven. The industry should not be pressurized to
implement the technology unless there is a real need for that technology. In Korea,
CDMA2000-1X was providing most of the services that can be provided using 3G and thus
there was very less incentive for the operators and the subscribers to accept the technology.
Also, the market should be free to decide on the technology to be used for 3G implementation
and the regulator or the government should not press the burden of a particular technology on
the industry. One more thing is that the technology evolution and its path decision is a long-
term assessment within the socio-technological system and the decision should be driven by
individual carriers so that they can decide upon the technology in which they can serve the
society in a better way.
Investment timing is very important for the efficient and proper use of a technology. The take
up of 3G (before HSDPA) in Korea was very less (only 0.5 million subscribers added in three
years). The telecom industry in any country should have a fast response towards the
technological advancements.
III. Case study of Europe
Motivation
Europe had been ahead of rest of the world in terms of 3G licensing which started in
the year 1999 in Finland. The cost paid for the spectrum was quite high in most of the
European nations which proved to be a great setback for the operators. Also regulator’s
imposed coverage requirements, network sharing and spectrum sharing policy needs to be
looked upon. In contrast to Japan, here mobile internet was not so popular which hindered the
success of 3G during the initial years of its launch.
Background
The Digital mobile communication era in Europe started with the formation of a
working group called GSM (Groupe Special Mobile) formed after the European Conference
of Postal and Telecommunications Administrations (CEPT) in 1982. This group had the task
of establishing the specifications of a digital mobile technology which will have a pan-
European nature and allow roaming throughout the whole continent. In 1987, a memorandum
of understanding was signed by 13 countries to develop a common cellular telephone system
across Europe. The frequency bands 900 MHz and 1800 MHz were selected for the GSM
technology operation. Finally, the first GSM network was launched in 1991 by Radiolinja in
Finland ‘(Fuentelsaz, Maicas, Polo, 2008)’. As the regulators in European Union chose to
impose a common standard, GSM spread throughout the continent in a very short period of
time and achieved the penetration rates never achieved before ‘(GSM World)’. In 2002, 95%
of the nations worldwide had GSM networks ‘(Fuentelsaz, Maicas, Polo, 2008)’.
Initially the mobile communication meant only voice communication but the importance of
non-voice services started increasing from the year 1995 when the SMS (Short Messaging
Service) was launched on the GSM network. The demand for data services increased further
and this resulted into trials for WAP (Wireless Application Protocol) in 1999. A WAP
browser provides all of the basic services of a computer-based web browser but simplified to
operate within the restrictions of a mobile phone, such as its smaller view screen ‘(WAP)’. To
support WAP, GPRS (General Packet Radio Service) which is packet-oriented mobile data
service was launched in 2000 ‘(Fuentelsaz, Maicas, Polo, 2008)’. To retain the competitive
edge that the European telecom industry enjoyed, the UMTS (Universal Mobile
Telecommunication Services) licenses were given to the operators starting from the year
1999, when the first 3G licensing process was held in Finland ‘(Whalley, Curwen, 2006)’.
Policy Architecture
The European Commission’s Competition Directorate-General and Information
Society Directorate-General have powers of regulation over the mobile telecommunications
sector. Like in the case of 2G, the Europe chose to impose a common standard in 3G and W-
CDMA was chosen as the common standard ‘(GSM World)’.The 3G licensing in most of the
Europe held in the period 1999 to 2001. The licenses were given using different mechanisms:
an auction, a tender, beauty contest + auction, beauty contest + fee, direct allocations etc. In
some countries the number of 3G licenses offered was kept greater than that of 2G so as to
encourage new entrants and thus increase competition in the market. The UK and German
auctions generated very large amounts of money, $43.2 billion and $46.1 billion respectively
‘(Whalley, Curwen, 2006)’. But this method of licensing was used only in small number of
countries. Most countries used the Beauty contest type of licensing method.
Throughout Europe, regulators imposed strict conditions on the winning companies. The
companies had to complete stringent coverage requirements like in Austria where the
licensing held in Nov 2000, the operators were expected to cover 25 percent of the population
by 2003 and 50% by 2005.
The huge amount of money paid by the companies in the licensing process resulted into huge
debt for the companies. The companies were not able to roll out the services and hence
resulted into large delay in the launch of the 3G services. Many companies like Telesonera,
Eelefonica etc. which were in investment mode before licensing process came into
disinvestment mode ‘(Whalley, Curwen, 2006)’. They had to restructure themselves to sustain
themselves and maintain their competitive edge ‘(Sharma, 2009)’.
Industry and Government assumptions
The European operators saw 3G as a tool to maintain their competitive edge in the
global market. Also, by introducing W-CDMA in the same manner as used for GSM, the
regulators expected fast take up of W-CDMA, which didn't happen actually ‘(GSM World)’.
Some companies also took 3G licensing process as an opportunity to expand its horizons
‘(Whalley, Curwen, 2006)’. Regulators offered more number of UMTS licenses as compared
to that of 2G with a view to enhance the competition in the market ‘(Whalley, Curwen,
2006)’. Also, 3G implementation was expected to support services which will help stop the
continuous fall of ARPU.
Decision making
Some decisions were taken by the government and the industry which affected the
implementation of the 3G technology in Europe. One such decision was that of the European
regulators to choose W-CDMA as the UMTS standard. Also unlike US where the market is
allowed to choose the technology, the Mobile technology standards in Europe were imposed
by the regulators on the operators. The incumbent operators in most countries used the wait
and watch policy at the time of roll out of 3G services. It was always a new entrant like
Hutchison Whampoa who was the first to launch 3G services.
Post Decision Scenario
The regulators in Europe imposed W-CDMA as a common standard for UMTS so that
complete technology compatibility can be achieved throughout Europe and it can grow at a
fast pace due to wide acceptance. Though in GSM, this imposition resulted into tremendous
growth for GSM, in case of W-CDMA, this strategy didn't work out. The main reason for this
was the difference in the market conditions at the time of launch of these technologies. At the
time of launch of GSM, the customers compared the utility of acquiring a GSM mobile with
that of not acquiring it. Whereas in case of UMTS, the customers were not even fully aware of
the advantages of UMTS over GSM ‘(GSM World)’. The operators due to fund deficits were
not able to provide the services and acquire content providers which could have actually
exhibited the difference between UMTS and GSM.
One of the key factors of the UMTS implementation in Europe derives from the way in which
the technology standard was decided. (Globally regulated vs. open market) ‘(GSM World)’. A
common standard would have meant higher penetration rates, service and feature availability,
new technology development and deployment and better coverage. But in the case of 3G, the
operators were not able to coordinate with other telecom actors like phone manufacturers and
application providers thus resulting into delay in roll out of services, shortage of handsets and
new advanced services for the users. One reason for this can be the huge debt on the operator
companies, the other reason can be the entry of other standards like GPRS and EDGE
(Enhanced data rates for Global evolution) into the market, which provided the services which
were nearly of the same quality as that of 3G.
The incumbent operators were not that interested in fast roll out of 3G services, because they
thought that they were already earning massive revenues from their 2G networks. Also the 3G
technology was immature and that handsets were either unavailable or were difficult to use.
Such behaviour was understandable given the market conditions at that time ‘(Whalley,
Curwen, 2006)’.
Implications for emerging markets:
One of the main highlights of the 3G implementation in Europe was the high auction
amounts paid in countries like UK and Germany which was the result of over estimation of
the utility of 3G by the operators. This in conjunction with the internet bubble burst of 2002
made the telecom companies come under huge depts. To avoid such circumstances, the
companies should not bid above the actual value of the 3G spectrum value. Also the regulator
should design the licensing process in such a way so that the results of the licensing does not
deviate the market.
Also, 3G services can become successful only if the equipment for its implementation is
available. That is, the users should have access to efficient and cheap handsets and new
advanced interesting services.
Internet bubble burst: The stock market downturn of 2002 in which a sharp drop in stock
prices in stock markets across USA, Canada, Asia and Europe was observed.
3G market: The Indian scenario
The Indian market for telecom services is one of the fastest growing in the world. The
penetration of wireless services stood at 38% at the end of July 2009, while the year-on-year
growth in mobile subscribers in the last year was 49% ‘(DoT, 2009)’.
The regulation in Indian telecom industry is provided by TRAI ‘(Telecom regulatory
authority of India)’ and Department of Telecommunication ‘(DOT)’, Ministry of
communication and Information Technology. For 3G licensing, the auction mode of licensing
has been chosen by the government. There are no restrictions imposed by the regulator on the
technology to be adopted for providing services in the 3G Spectrum.
In March 2009, there were only 118 million wireless internet subscribers in India which
reflects a large scope of improvement in mobile internet industry in India ‘(DoT, 2009)’. The
increasing take-up of wireless internet (through mobile handsets) gives an indication of the
potential opportunity. Figure 2 indexes the increase in number of wireless internet
subscribers. The scale adopted is first yearly, and then for every quarter.
Fig 2
Conclusion
Three cases considered provided for different market conditions that can exist relating
to 3G and thus their study gives a complete insight into the 3G implementation process. It was
found that take-up and fate of 3G was dependent on various parameters. These parameters are
discussed as under:
Regulatory conditions: As seen in the case of Korea, the regulator favoured CDMA2000 1X
as the standard for 3G as a result of which LGT was not able to roll out its 3G services.
Presently Indian regulatory bodies have put no such conditions. It needs to remain the same.
Licensing procedure: The licensing procedure determines whether the companies have
sufficient capital after paying the cost of the license. The licensing model should be able to
generate revenue for the government and at the same time, should not prove bring any
hindrance in rolling out of services. Like in case of Europe, the companies came under huge
debt due to the bad licensing model which in turn affected their capability to launch services.
Market conditions: Market conditions before and during deployment will also play an
important role in the take up of a new technology. For e.g. the high mobile internet
penetration in Japan helped 3G to grow faster there. There is a need to create awareness about
mobile internet in India to achieve this objective.
Handset sufficiency: While first half of the 3G market is about network services, handsets
fill the second half of it. 3G will require compatible handsets. The handsets should as well be
backward compatible, i.e. should be capable to revert back to 2G network if in case it is
needed anytime.
Value-Chain: One important factor which will determine the success or failure of 3G is the
coordination that the telecom operators will be able to achieve with other actors of the value
chain like equipment vendors, content providers, service innovators, ISPs etc. This point is
supported by the example of NTT DoCoMo which through its brand image and excellent
revenue sharing model was very successful in coordinating well with the other actors of the
value chain and hence was able to promote the mobile internet in Japan in a very big way.
R&D work: There should be proper research done in emerging markets, to analyze the
market for 3G and to infer what type of services should be best suited, considering the market.
The telecommunication companies should give sufficient attention to this area so as to
optimize their services.
Migration to higher technologies: Once 3G is implemented, the scope for the next level
technology i.e. 3.5G (HSDPA) should be analyzed. Like in South Korea, the 3G market grew
very rapidly when it was transformed to 3.5G technology. So, aspects of technology migration
should be constantly analyzed.
Technology absorption: This new technology should be started in a mode that it can be
absorbed easily in the population. The technology should provide utility for the final
customer. Customer should be made aware very well about the level of comfort and ease this
new technology can bring to the doorstep.
All these factors when properly taken care of, will increase the chances of successful 3G
implementation in these markets.
These points can suggest the measures which can be taken so that it can be ensured that the
upcoming technology has a secured ground and that it can be used to improve the wireless
services in emerging markets.
As to the suggestion for future studies, future studies may happen in the area of the
comparison of W-CDMA and CDMA2000 1X , and laying out a business model for the
telecommunication companies to operate 3G in emerging markets.
Glossary
1. ARPU- Average revenue per user. It is a measure used primarily by consumer
communications and networking companies, it is the total revenue divided by the number of
subscribers.
2. Broadband - A high speed Internet connection with at least 256Kbps speed is termed
as a Broadband connection.
3. CDMA - Code Division Multiple Access. It is a channel access method utilized by various
radio communication technologies. It should not be confused with the mobile phone standards
called CDMA-ONE and CDMA2000 (which are often referred to as simply "CDMA"), which
use CDMA as an underlying channel access method.
4. CDMA2000 1XEV-DO - CDMA2000 1X Evolution-Data Optimized. It is a
telecommunications standard for the wireless transmission of data through radio signals,
typically for broadband Internet access.
5. DECT - Digital Enhanced Cordless Telecommunications. It is an ETSI standard for
digital portable phones (cordless home telephones), commonly used for domestic or corporate
purposes.
6. FDMA - Frequency Division Multiple Access. It is a channel access method used in
multiple-access protocols as a channelization protocol. FDMA gives users an individual
allocation of one or several frequency bands, or channels.
7. HSDPA - High Speed Downlink Packet Access. It is an enhanced 3G (third generation)
mobile telephony communications protocol in the High-Speed Packet Access (HSPA) family,
also coined 3.5G, 3G+ or turbo 3G, which allows networks based on Universal Mobile
Telecommunications System (UMTS) to have higher data transfer speeds and capacity.
8. IMT 2000 - International Mobile Telecommunications-2000 (IMT-2000), better
known as 3G or 3rd Generation, is a family of standards for mobile
telecommunication defined by the International Telecommunication Union, which
includes GSM EDGE, UMTS, and CDMA2000 as well as DECT and Wi-MAX.
9. QOS - Quality of Service
10. TDMA - Time Division Multiple Access. It is a channel access method for shared medium
networks. It allows several users to share the same frequency channel by dividing the signal
into different time slots.
11. TD-SCDMA - Time Division Synchronous Code Division Multiple Access. It is an air
interface found in UMTS mobile telecommunications networks in China as an alternative to
W-CDMA.
12. UMTS- Universal Mobile Telecommunications System. The name UMTS, introduced by
ETSI, is usually used in Europe. Outside of Europe, the system is also known by other names
such as FOMA (Freedom of Multiple Access) or W-CDMA. In marketing, it is often just
referred to as 3G.
13. UWC 136 - Universal Wireless Communications 136. It is a third-generation wireless
standard proposal based on TDMA technology that was developed by the Universal Wireless
Communications Consortium and is one of the 3G candidates submitted to the International
Telecommunication Union by the United States.
14. VOIP - Voice over Internet Protocol. It is a general term for a family of transmission
technologies for delivery of voice communications over IP networks such as the Internet or
other packet-switched networks.
15. W-CDMA - Wideband Code Division Multiple Access. It is an air interface found in
3G mobile telecommunications networks. It is the most widespread standard for 3G
mobile telecommunication technology.
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