GENEVA—General Packet Radio Service (GPRS) roaming exchanges (GRX) are rapidly emerging as a profitable new service niche in Europe and around the world, as mobile operators get serious about GPRS and struggle to come to grips with the complex roaming and billing issues surrounding mobile data.
Comprising centralized Internet Protocol (IP) routing networks based on the GSM Association’s IR 34 standard, exchanges’ abilities to streamline international interconnections for both voice and data applications should see them become the dominant roaming models for GPRS providers in Europe, the Americas and Asia within the next few months.
Initially launched in early 2001 by large carrier services providers like Cable & Wireless and Telecommunication Services Incorporated (TSI), demand for GRX initially languished in the face of chronic GPRS handset shortages and third-generation (3G) network deployment concerns that saw 2.5-generation (2.5G) firmly relegated to the back burner.
But with GPRS unexpectedly enjoying a new lease on life as the industry’s preferred mobile data platform—at least for the foreseeable future—operators are now scrambling to resolve roaming issues before they impact take-up. “Roaming will only account for around 6 percent of data revenues (an initial long-term estimate), but the ability to support cross-border use will be crucial in attracting early adopters—business users wanting reliable access to e-mail and corporate applications on the move,” said Katrina Bond, principal analyst with U.K. consultancy Analysys and lead author of a recent report on GRPS roaming.
While Western Europe counted a mere 1 million GPRS users at end-2001, Bond said that figure will grow to 6 million by the end of this year, increasing to 110 million by 2006, but only if operators move fast to make up for lost time. “By the end of last year, only a handful of European operators had enabled roaming—One Austria with the Czech Republic’s EuroTel and Germany’s Viag Interkom, Norway’s Telenor with Vimpelcom, and Denmark’s Sonofon with Telenor and Sonera in Finland,” said Bond.
During the past three months, that picture has changed substantially, with a host of operators including Austria’s Mobilkom, BT Cellnet and the MmO2 group, Telia Mobile, Vodafone Group, Bouygues Telecom and SFR of France, T-Mobile of Germany and Norway’s NetCom all cementing GRX agreements.
The urgent need for GRX is directly linked to the complexity of providing roaming and billing for a service that is not only carrying a mix of traffic, but is always on. “Traditional per-second connection models don’t hold, and with 2.5G now being rolled out aggressively worldwide, operators simply don’t have time to create a raft of new carrier-to-carrier roaming agreements along the lines of the GSM model,” said Farid Yunus, a wireless analyst with The Yankee Group in London. “Roaming is already a critical factor in Europe, where cross-border business travel is common, so any solution that facilitates rapid time to market should definitely be embraced.”
The main alternative to GRX—tunneling through the public Internet—is proving an unpopular solution because it lacks security, scalability and reliability. In addition, GRX also has the great advantage of allowing international traffic to be routed back to the user’s home network, simplifying billing while ensuring consumers enjoy access to the same portfolio of services at home and abroad. “Routing traffic back home gives operators the chance to keep their brand in front of their customers and to provide a consistent look and feel that not only enhances ease of use, but could represent a major differentiator in a highly competitive market,” noted Bond.
As demand for exchange services mounts, there has been a veritable stampede to set up shop in the GRX space by just about anyone with sufficient Internet Protocol (IP) backbone capability. Infonet Services and Swiss mobile roaming broker Comfone were the first to announce a GRX service provision agreement in January 2001, followed closely by wholesale backbone providers like Cable & Wireless, TSI, Ebone (now KPNQwest), Equant, Energis and a flurry of incumbents, including Deutsche Telekom, Telecom Italia, France T
