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3G White paper

As with all new technology standards, there is uncertainty and the fear of displacement. Third Generation (3G) mobile is topical and contentious for several reasons:

• Because the nature and form of mobile communications is so radically changed, many people do not understand how to make money in the nonvoice world, and do not understand their role in it

• 3G licenses have started being awarded around the world, necessitating that existing mobile communications companies in the 2G world think about and justify their continued existence

• 3G is based on a different technology platform- Code Division Multiple Access (CDMA)- that is unlike the Time Division Multiple Access (TDMA) technology that is widely used in the 2G world. GSM (Global System for Mobile Communications) was based on TDMA technology

• The US, Japanese and European mobile players all have different technology competences and are now unified in this single standard- the separate wireless evolution paths and European wireless leadership are thereby challenged

 
   

 

• Japanese network operators will be the first to implement 3G networks in the year 2001, and Japanese terminal manufacturers, who have not had much market share outside their home market, will be first with 3G terminals

• Many industry analysts and other pundits have questioned the return on an investment in 3G technology- questioning whether network operators will be able to earn an adequate return on the capital deployed in acquiring and rolling out a 3G network.

• Many media and Internet companies have shown a strong interest in using 3G technology as a new channel to distribute their content, opening the opportunity for new entrants and new partnerships and value chains.

 
         
           
             
    Summary of Mobile Lifestreams’ View on 3G

As detailed in its full “Data on 3G” report, Mobile Lifestreams believes relating to 3G:

• 3G can be thought of as 2.5G services such as GPRS plus entertainment (games, video, mobile multimedia) plus new terminals. 3G brings with it significantly more bandwidth. Whereas GPRS terminals will have the same range of form factors as today’s 2G phones do, many 3G terminals will be video centric.

• There is a clear business case for investing in 3G for existing network operators that are facing congested 2G networks. Voice traffic over 3G networks will be the cash cow that supports and ensures the 3G business case can pay for itself. The main positive (rather than defensive) reason for mobile network operators to secure 3G network licenses is to solve capacity issues in terms of enabling far greater call capacity than today’s digital mobile networks allow.

• Nonvoice (data) traffic will also be huge, with new mobile multimedia applications such as mobile postcards, movies and music driving new applications and services along with corporate applications. Applications and services available through the Internet, intranet and extranet will drive the interest in and traffic on 3G networks.

• Providing that network operators adopt an open model to all Internet traffic, the business case for 3G fuelled by both greater data and voice traffic is clear and Mobile Lifestreams is confident that the business case for winning and rolling out a 3G network is compelling. If the network operator insists upon a closed model in which data traffic is funneled primarily through its own in-house portal or limits access to its customers for eCommerce and other Internet services, the business case is endangered.

• Third Generation technology is essential- think about the huge change that will happen in the next five years from today’s rudimentary and crude text based if elegant services such as Short Message Service to moving video clips.

• It is often assumed that early adopters will be corporate customers for 3G, but Mobile Lifestreams expects that since consumer electronics devices as their name suggests appeal to consumer markets and will have 3G built in. Mobile multimedia- games, entertainment and the like are much more consumer oriented that the buttoned down sober suited business people. Mobile Lifestreams expects 3G to be a consumer revolution and not a corporate one.

• Many people will not have a fixed phone at home. Preventing this until now has been the slow speed of mobile data in 2G and even so called 2.5G technology that has made Internet access the principle application for home phones.

• There will be a lot of suppliers of mobile terminals as Japanese, mobile handheld computer manufacturers (Palm, Microsoft), information appliance and IT suppliers enter the global mobile terminal market. Mobile enabled devices will proliferate as all portable consumer electronics devices get mobile communications (and short range wireless communications) technology built-in. The successful handset vendors will be those that can deliver new products rapidly and reliably.

Given the fragmented market for wireless phones, alliances and mergers between Korean, Japanese, European and American mobile phone and consumer electronics manufacturers will continue and accelerate since few if any companies have all the enabling technologies in-house from video to camera to mobile to interfaces. Smaller players in all of these sectors will continue to consolidate, as companies such as Sagem and Benefon (with data skills and location centric smart phones respectively) are acquired to gain better distribution for their technologies.

• 3G terminals will be very significantly more complex than today’s GSM phones, because of the need to support video, more storage, multiple modes and new software and interfaces, better battery life and so on. Given that the biggest single inhibitor of take up of new services such as Wireless Application Protocol (WAP) and High Speed Circuit Switched Data (HSCSD) has already proven to be a lack of handsets, and given that every stage in the data evolution path for GSM from today to 3G requires a new handset, once again we see that terminals are mission critical and their timely volume availability will be critical factor in determining when 3G is a success.

• Partnerships will increasingly develop between (US based) Internet, IT and IP companies, traditional mobile communications vendors (from Europe and the USA) and (Japanese) consumer electronics manufacturers. Different regions have different strengths and are likely to leverage them through strategic alliances.

• From a network operator technology point of view, the introduction of packet data services such as GPRS to circuit switched networks is more challenging than the move from GPRS to 3G- this is because GPRS is the first time addition of packet capability to a circuit switched network, whereas 3G is the addition of more packet.

• From an end user point of view, the move from GPRS to 3G is much more revolutionary than the move from Second Generation data services to GPRS. GPRS allows the mobile network to catch up with the data bandwidths available over fixed telecommunications networks, whereas 3G provides unprecedented bandwidth for mobile users, so much bandwidth that new applications will need to be invented to use it.

The standards for 3G

Third Generation (3G) is the mobile phone system that will be begin to be available commercially in the year 2001/2. The idea behind 3G is to unify the disparate standards that today’s second generation wireless networks use. Instead of different network types being adopted in The Americas, Europe and Japan, the plan is for a single network standard to be agreed and implemented.


3G STANDARDIZATION PROCESS

In 1998, the International Telecommunications Union (ITU) (see www.itu.int) called for Radio Transmission Technology (RTT) proposals for IMT-2000 (originally called Future Public Land Mobile Telecommunications Systems (FPLMTS)), the formal name for the Third Generation standard. Many different proposals were submitted: the DECT and TDMA/ Universal Wireless Communications organizations submitted plans for the RTT to be TDMA-based, whilst all other proposals for non-satellite based solutions were based on wideband CDMA- the main submissions were called Wideband CDMA (WCDMA) and cdma2000. The ETSI/ GSM players including infrastructure vendors such as Nokia and Ericsson backed WCDMA. The North American CDMA community, led by the CDMA Development Group (CDG) including infrastructure vendors such as Qualcomm and Lucent Technologies, backed cdma2000.


3GPP

In December 1998, the Third Generation Partnership Project (3GPP) was created following an agreement between six standards setting bodies around the world including ETSI, ARIB and TIC of Japan, ANSI of the USA and the TTA of Korea. This unprecedented cooperation into standards setting made 3GPP responsible for preparing, approving and maintaining the Technical Specifications and Reports for a Third Generation mobile system based on evolved GSM core networks and the Frequency Division Duplex (FDD) and Time Division Duplex (TDD) radio access technology. For example, ETSI SMG2 activities on UMTS have been fully transferred to 3GPP. The Chinese and the CDMA Development Group were unfortunately not original members of the 3GPP.

In the first half of 1999, much progress was made in agreeing a global IMT-2000 standard that met the political and commercial requirements of the various technology protagonists- GSM, CDMA and TDMA. In late March 1999, Ericsson purchased Qualcomm’s CDMA infrastructure division and Ericsson and Qualcomm licensed each other’s key Intellectual Property Rights and agreed to the ITU’s “family of networks” compromise to the various standards proposals.


3 AIR INTERFACE MODES

The proposed IMT-2000 standard for Third Generation mobile networks globally is a CDMA-based standard that encompasses THREE OPTIONAL modes of operation, each of which should be able to work over both GSM MAP and IS-41 network architectures. The three modes are:

TABLE 2: SOURCE MOBILE LIFESTREAMS

Having three different modes, one for Europe and Asia, one for Japan and one for the US is not all that different from the existing 2G situation. The main change is that Japan has joined the European GSM community and based WCDMA.

As can be seen from the table above, there are several different names for each of the air interface modes, and furthermore, new names are regularly introduced! For the sake of this book, we refer to WCDMA, cdma2000 and FDD wherever possible, and refer to UWC 136 and UMTS separately.

In fact, strictly speaking, the final ITU recommendations for IMT-2000 stipulated five terrestrial radio interface standards when DECT (IMT FT) and EDGE (IMT SC or IWC 136) are included. EDGE and DECT will NOT be the topic of this introduction to 3G.

There are three radio interface modes with two (existing) major core network standards- GSM MAP and TIA IS-41 (from Telecommunications Industry Association, a US standards setting body). The core network is the physical network infrastructure to which the radio access network is connected in a mobile network. A radio access network is the portion of a mobile network that handles subscriber access, including radio base stations and other nodes.