DUBLIN, Ireland-At the beginning of the 1990s, analog was the dominant European cellular technology, but during the decade it has been superseded by GSM and soon will be phased out in many countries. However, there appears to be little prospect of third-generation (3G) mobile technology leading to the obliteration of GSM as networks hedge their bets on the future balance between voice and data services.
Even industry analysts are wary of making predictions on 3G services. Global information group Ovum suggests that almost two-thirds of the world’s cellular subscribers will use 3G networks by 2010, but makes no prediction on the split between voice and data traffic.
“It is vital that operators do not rely on 3G to transform demand for data services,” said Dan Gardiner, author of the report “Third Generation Mobile: Market Strategies.”
“Extending existing services and moving to higher-speed packet services (such as General Packet Radio Service) will enhance demand for such services over time,” he said.
Steve Rowe, an analyst with U.K. communications consultancy Mason Communications said the advantage of 3G lies much more in data than voice services and questions the ambitious forecasts for future data traffic.
“Many subscribers are only just coming to grips with mobile voice services and the vast majority are only interested in voice services,” said Rowe. “Setting call charges for third generation will also be problematic-should calls be billed on duration or by packets of data? However, if GPRS proves successful, networks will be encouraged to adopt third generation. It’s a real commercial dilemma for operators.”
According to Jonas Twingler, GSM Association 3G coordinator, voice services have relatively little further potential.
“Most European countries already have penetration levels for mobile voice traffic in excess of 30 percent,” said Twingler. “In the long term, operators will have to find alternative sources of revenue such as wireless data services.
“GSM cannot deliver high-speed data, but GPRS can achieve reasonably high data rates. So from that perspective there is no need to go immediately to 3G-if the only requirement is to get higher data rates onto your network, GPRS will suffice for many years.”
Twingler acknowledges operators and subscribers could be left wondering if they even need 3G when GPRS will deliver up to 384 kilobits per second data speeds, but he said certain factors will require carriers to make the transition.
“One of the main reasons is spectrum-networks will require additional capacity to house increased numbers of data users,” said Twingler. “Another reason is that in five years’ time, customers may take 2 Mbps (Megabits per second) data speeds for granted.
“In addition, 3G can deliver multimedia applications that could never be carried over GSM or even GPRS,” he added. “However, this does not mean networks should or will be forced to decommission their GSM infrastructure, even though there might be capacity incentives for operators in small countries with a saturated network to switch to 3G at an early stage.”
When 3G services were first conceived, they were planned as a straight replacement for GSM. But operators realized there would be as many as 500 million GSM subscribers by the time 3G became a reality, and they recognized the folly of scrapping a system that has grown far beyond its traditional stronghold of Europe.
Twingler said GSM operators and subscribers have nothing to fear from 3G because the handsets will be compatible with both GSM and GPRS. He also warned that ignoring next-generation systems or assuming that GSM will always be sufficient is a “dangerous path” for operators to follow.
“Many countries have four or more operators and it’s safe to assume that at least one operator in each country will adopt 3G as early as possible,” said Twingler. “If mobile data turns out to be as lucrative as some observers expect, these networks will have a massive advantage on their rivals.”
