Acknowledgement
World Mobile market even after full maturity of 2.0G/2.5G technology is still striving to migrate to Third Generation. Second Generation which was supposed to be obsolete by this time, today still acquires 85% of the market share. 3G after 8 years (since 2001) of start acquires only 15% market share. 3GPP before significant deployment of WCDMA based 3G declares the OFDMA based new standard LTE. 3GPP in line technologies UMTS, HSDPA, HSPA, HSPA+ has not bothered for logical gap to offer for deployment. When critics are still asking about the success of 3G, declaration of LTE puts the situation yet complex. This is off course the investment challenge for the mobile operators. Though vendors are very much optimistic about benefit of entering earlier in 3G chains and promising about smooth migration to upward technology by software up gradation only, countries like Bangladesh are to think twice to enter in such non returning vessel. Every vendor has astringent experience about software up gradation of the proprietary system.
It is Mobile WiMAX that compels 3GPP to develop LTE. Vendors deliberately declare LTE roadmap ahead of time to defend against Mobile WiMAX. At this instant LTE is the choice more to the leading CDMA operators in USA to deploy quickly because of the bottleneck of CDMA to higher data rate. WCDMA operators are little pessimistic about quick LTE.
Despite my own attachment with a mobile operator, the insight in the article is from my personal viewpoint.
History of Mobile Generations
Initial mobile
Though first mobile communication was launched in 1946 in USA, the development of mobile technology was stagnant till late 70’s due to technological constraint. The tremendous development of semi conductor technology during this period and subsequent innovation of microprocessors in 1975 helped mobile to breakthrough commercially. Till further development of cellular technology, capacity problem was the key constraint of commercial mobile. In 1978 total number of mobile (only in USA) was no above 10,000. Mobile technology upto this is termed as 0 Generation Mobile.
Cellular Mobile
A quantum leap in mobile communication occurred in 1979 after introduction of cellular mobile & came outside US, first in Japan. This cellular mobile is termed as 1st Generation mobile. The total number of 1G mobile in 1992 reached to 10 million. Though the core network of 1G was digital, the analogue radio network limited the capacity of 1st Generation mobile.
2G Mobile
Digitalization of the radio network was another quantum leap in mobile history & is termed as 2nd Generation Mobile, started in 1992. GSM, the European 2G mobile is the most successful standard which beat the legacy US mobile standard & captured the whole world soon, even in the territory of US. The developed standards for 2G mobile are-
GSM : Europe, Asia, Australia, South , America etc.
DAMPS : America, Australia etc.
PDS : Japan
IS-95 : America, Korea, Japan, China etc
In 2001 the total number of 2G mobile was 660 million where only GSM is 410 million.
Third Generation Mobile 3G
3G vision
Third Generation mobile is the first ITU intervention in mobile technology through a platform named IMT2000. From the past bitter experience of multi standards as well as tremendous success of GSM as a regional standard entrusted the mobile community
toward a common standard for the welfare of the future world. This common standard is termed as 3G. The IMT2000 as the name implies target 3G deployment by 2000 and use frequency of 2000 MHz range.
One objective of 3G mobile is broadband internet access through mobile PC. Internet is the “Global Town Square” where people can meet, chat & blog. The data rate of 3G was aimed up to 2 Mbps. Video phone, mobile commerce, Telemedicine, distant education is the committed service of 3G. Worldwide compatibility & mobility, Home PLMN (HPLMN) service outside geographical border are also the goal of 3G.
With above objectives, 3G technologies under the umbrella of IMT2000 targeted to replace 2G legacy network sooner as possible. As an initial hype of 3G the developed countries started auction 3G spectrum. Initially UK sold 3G spectrum by auction at USD 35.5 billion & Germany at USD 46 billion. Economic down train of Telecom Industry in 2001 stopped 3G auction. Despite this 4 Asian Tiger deployed 3G very shortly. The first 3G mobile standard (FOMA) was launched in 2001 in Japan.
3G Technology Roadmap
The key technology of 3G is CDMA/WCDMA. WCDMA based 3G mobile standard has different version like UMTS, HSDPA, HSPA,HSPA+ and CDMA based 3G standard is CDMA2000 with versions CDMA2000 1X, 1xEV-DO Rel.0 & 1xEV-DO Rev. A. OFDMA based LTE termed as 3G & beyond (also termed as 4G) aims to provide extra high data rate of more than 100 Mbps. LTE is designed with reduced latency (10 milliseconds) to allow VoIP through the data network & consequently deploy all IP network up to the user terminal.
3G market share
Year :: Total Mobile :: Total Growth :: Total 3G :: 3G %
2006 :: 2613 :: 28% :: 166 :: 6%
2007 :: 3250 :: 25% :: 311 :: 9%
2008 :: 3907 :: 20% :: 506 :: 13%
2009 expect :: 4441 :: 11% :: 750 :: 17%
In December 2008, the total number of 2G/2.5G/3G mobile is 3907 million where 3G mobile is 506 million which is 13% only of total mobile. In December 2009 total mobile is expected 4441 where 17% 3G is assumed. This is an indication about dominancy of 2.5G over 3G still after long time of deployment.
3G Challenges
As the interim standard (GPRS/EDGE) could at least cater people’s demand of voice & data and there is little difference between 2g & 3G services, the core marketing concept of product differentiation could not cross threshold margin to succeed 3G over 2/2.5G. Along with these factors the economic downturn in the Telecom industry ultimately slowed down the 3G implementations except in few advanced countries like Japan, Korea, UK, Australia, Austria, Singapore etc. Many operators of the world and especially in the third world countries including Asia Pacific were asleep on the subject of 3G till recent past.
After implementing 3G UMTS in few countries different protocols like HSDPA, HSUPA, HSPA was developed with several megabytes data rates (up to 14.4 Mbps). This development was remarkable in the history of mobile broadband. During initial adoption of 3G, such quick technological up gradation leads the mobile operators ‘Wait & See’ to save CAPEX.
Besides these challenges, WiMAX is another factor that leads 3G to further back footage. IEEE.802.16e standard Mobile WiMAX with a commitment of 75 Mbps data rate (with mobility) create vibrant in 3G roadmap. Intel the leader of computer chip vendor, being the producer of WiMAX chipsets tried to enter Qualcom’s legacy mobile market aggressively.
Japanese has pioneered the mobile commerce ahead of US & Europe by the advent of 3G. If we examine what the Japanese are buying, we will realize that they are not far ahead of the rest of the world. They are buying predominantly Screen server & Ring tones. Small screen & low resolution of mobile is also the challenge of mobile commerce.
Video phone is not as popular as it is expected because of people’s habituation to keep handset on the ear not in front of eye.
3G Jargon
3G Challenges
As the interim standard (GPRS/EDGE) could at least cater people’s demand of voice & data and there is little difference between 2g & 3G services, the core marketing concept of product differentiation could not cross threshold margin to succeed 3G over 2/2.5G. Along with these factors the economic downturn in the Telecom industry ultimately slowed down the 3G implementations except in few advanced countries like Japan, Korea, UK, Australia, Austria, Singapore etc. Many operators of the world and especially in the third world countries including Asia Pacific were asleep on the subject of 3G till recent past.
After implementing 3G UMTS in few countries different protocols like HSDPA, HSUPA, HSPA was developed with several megabytes data rates (up to 14.4 Mbps). This development was remarkable in the history of mobile broadband. During initial adoption of 3G, such quick technological up gradation leads the mobile operators ‘Wait & See’ to save CAPEX.
Besides these challenges, WiMAX is another factor that leads 3G to further back footage. IEEE.802.16e standard Mobile WiMAX with a commitment of 75 Mbps data rate (with mobility) create vibrant in 3G roadmap. Intel the leader of computer chip vendor, being the producer of WiMAX chipsets tried to enter Qualcom’s legacy mobile market aggressively.
Japanese has pioneered the mobile commerce ahead of US & Europe by the advent of 3G. If we examine what the Japanese are buying, we will realize that they are not far ahead of the rest of the world. They are buying predominantly Screen server & Ring tones. Small screen & low resolution of mobile is also the challenge of mobile commerce.
Video phone is not as popular as it is expected because of people’s habituation to keep handset on the ear not in front of eye.
3G Jargon
3GPP :Third Generation Partnership Project
CDMA : Code Division Multiple Access
WCDMA : Wideband CDMA
OFDMA : Orthogonal FDMA
UMTS : Universal Mobile Telephone Standard
HSPA : High Speed Packet Access
HSDPA : High Speed Downlink Packet access
LTE : Long Term Evolution
WiMAX : Worldwide Interoperability of Microwave Access
GSM : Global System of Mobile communication
DAMPS : Digital Advanced mobile Phone System
PDS : Personal Digital Cellular
IS-95 : Interim Standard 95
GSA: Global Mobile Suppliers Association
MIMO : Multiple Input Multiple Output
LTE as 3G
Innovation
3GPP as the platform of legacy 3G vendors understood the technological limitation of CDMA/WCDMA over OFDMA soon. So, they declared ahead of time their new standard LTE (also UMB by 3GPP2 initially) with OFDMA technology to show a reassuring roadmap to the existing mobile operators.
LTE is scalable to allow operation in a wide range of spectrum bandwidths, from 1.4 – 20 MHz, using
both FDD and TDD modes, thus providing flexibility to suit any operator’s existing or future frequency allocation. LTE and HSPA are complementary to ensure seamless inter-operability. On December 11, 2008 3GPP confirmed approval of the functional freeze of LTE as part of Release 8.
LTE is declared as the natural migration choice for GSM/HSPA operators. LTE is also the next generation mobile broadband system of choice more to leading CDMA operators, who are expected to be in the forefront of service introduction.
At this moment 26 network operators have committed to deploy 3GPP LTE systems and 10 LTE networks are expected to launch commercial services in 2010.
Probably LTE is also a major affair really caused 3G to go slow.
What is 4G?
Whenever there is a great breakthrough over the present technology constraint, the next generation is acknowledged. Mobile WiMAX as a commitment of extra high data rate (75 MBPS) declares it as 4G mobile broadband technology. The 3G legacy vendors though don’t agree on WiMAX as 4G. They have themselves declared OFDMA based LTE as 3G & beyond with a commitment of 200/100 Mbps data rate. Nevertheless, many people call LTE as 4G. Declared features of 4G are as follows-
> MIMO & MU-MIMO technology
> Software Defined Radio, SDR (Use of different air interface, download new modulation/coding)
> Dynamic spectrum allocation (Spectrum on demand)
> Packet network with all IP system
> Voice & data any time anywhere
> Multimedia messaging, Mobile TV, HDTV
In normal practice vendors feel proud to declare a new generation of their product. Here LTE with OFDMA, being a great breakthrough over the WCDMA is not declared as 4G. The reason that makes sense is that, as they are still marketing 3G, declaration of 4G will contradict marketing 3G. Therefore they are calling it as 3G & beyond.
3G World Deployment Scenario
> GSA regularly surveys the evolution of mobile to 3G and beyond, and confirms:
> 275 commercial WCDMA operators in 116 countries at this moment.
> WCDMA is the leading 3G system globally with 72% commercial networks share
> Over 94.1% of commercial WCDMA operators have launched HSPA service
> 287 million WCDMA subscribers (Q4 08)
> 102.3 million WCDMA subscriptions added in 2008; 55.4% growth
> 286 HSDPA operator commitments in 121 countries
> 259 HSDPA operators commercially launched in 111 countries
> Over 71% of commercial HSDPA operators support 3.6 Mbps peak or higher
> Over 37% of commercial HSDPA operators support 7.2 Mbps peak or higher
> Two HSPA+ networks (21 Mbps peak downlink) now in commercial service
> 84 operators committed to HSUPA; 71 HSUPA operators launched in 42 countries
> 1,409 HSDPA devices launched by 169 suppliers; 242 HSUPA devices launched
> 271 HSPA devices incorporate GPS/navigation capabilities
> Over 1.83 billion GSM & WCDMA-HSDPA subscribers in HSPA-enabled networks
Bangladesh Market Scenario
Present Market
The mobile market scenario of Bangladesh is different in many aspects with outside world. The key points are as follows-
> High growth but low ARPU (probably the lowest in the world).
> Licensing 6 mobile and 12 PSTN operators question about regulator’s vision.
> Huge unnecessary investment has been made in absence of policy of resource sharing.
> Absence of policy against SMP (Significant Market Power).
> WiMAX licensing questions 3G licensing at present stage.
> PSTN operators are in the question of survival.
The key potential of the market is the high population density. Probably this factor has dared the operators to be aloof of resource sharing.
About 3G licenses
Asia Pacific countries like India, Pakistan, Thiland etc are in the cutting age to license 3G by 2009. Vietnam already issued license in last month. Bangladesh as part of the region is planning to award 3G license soon. Vendors are competitive to present their 3G product describing colorful services to the operators. They are also in touch with the regulator including the govt. policy makers to take immediate step toward 3G.
3G business risk
> Initial license fee & annual fee will burden the small operator.
> Challenge to meet up coverage & service target.
> Sufficient spectrum allocation (minimum 2 carrier) is necessary.
> Technology neutrality is essential for 3G license.
> WiMAX may lower the broadband tariff.
> Affordability of costly terminal & low PC penetration.
> Spectrum may be exhausted for flat data rate.
> Integration capability with 2G infrastructure.
> Interference with other band.
> Major renovation to introduce multi-standard.
Vendors’ logic about 3G Licensing
Vendors are egger to see licensing 3G/HSPA in Bangladesh. The downlink packet access of HSPA as declared is 14.4 Mbps and 3.1 Mbps in uplink. They assure the cost of 3G equipment very close to 2G/2.5G. They propose composite network architecture of the radio network with GSM/GPRS & UMTS/HSPA.
During 3G presentation they are also demonstrating the approaching LTE and committing about smooth migration by software up gradation only.
Migration challenge for us
Migration to new technology in Bangladesh is big challenge at this moment. Where most operators are striving to survive after the present investment, new investment with new technology will burden them like anything.
Technology know-how is a challenge for the operator to bargain with the vendor for cost effectiveness. There frequently happens uneven contract between vendor & operator due to technological knowledge gap. In most cases vendors are in advantage.
Purchasing proprietary equipment is another challenge to the operator. For proper optimization of the composite 2G/3G network, operator’s better choice is the proprietary vendor that becomes the ultimate inconvenience to the operator.
Though only the software up gradation is the commitment of 3G product series from UMTS to LTE, it will not be possible if new frequency band is allocated for LTE.
Software up gradation sometimes becomes unmanageable on bargain. When the operator will enter in 3G chain, software up gradation to higher protocol will burden the operator.
Should we license 3G?
Before awarding 3G license the regulator as well as the govt. has to go back and calculate the economy of the growth in mobile market. The exponential growth of mobile market during last 3/4 years has given a mobile handset to the rickshaw puller, labor and the school students as well. We have to calculate, if the rickshaw puller and labor would call from a PCO center. What growth in the GDP have we seen against such expenditure on foreign currency for mobile network elements and mobile handsets? If the growth was half, what would have lost?
Further, the regulator should think, would the operator who will be awarded the 3G license may get back the investment surely & survive in the market. If the 3G is awarded, all mobile operators will try hard to get the license. But Regulator should consider the innocence of the operator about the future & this will be the real success of the nation, not by earning revenue from the operator.
If it is decided to award 3G license really now, will the operator to pay additional licensing cost? How many Operators are to award 3G license? If only few operators are awarded, other may loose market share. If all are licensed, may we manage the frequency band as per requirement of the technology? If WCDMA license is awarded will it restrict OFDMA?
On the other hand, if we wait for the 2/3 years (with GPRS/EDGE) till the PC penetration reach to a optimum level (to use broadband effectively) and use WiMAX for broadband internet at this moment, what would we lose? Considering all the threats should we wait for LTE and save a huge additional investment on 3G?
Answer
I personally have no answer of my question. Of course I have my personal thoughts, but it does not matter. It is a matter of thought of the nation as whole. On every body’s participation, the ultimate decision must go in favor of us as committed by Almighty.
LTE is scalable to allow operation in a wide range of spectrum bandwidths, from 1.4 – 20 MHz, using
both FDD and TDD modes, thus providing flexibility to suit any operator’s existing or future frequency allocation. LTE and HSPA are complementary to ensure seamless inter-operability. On December 11, 2008 3GPP confirmed approval of the functional freeze of LTE as part of Release 8.
LTE is declared as the natural migration choice for GSM/HSPA operators. LTE is also the next generation mobile broadband system of choice more to leading CDMA operators, who are expected to be in the forefront of service introduction.
At this moment 26 network operators have committed to deploy 3GPP LTE systems and 10 LTE networks are expected to launch commercial services in 2010.
Probably LTE is also a major affair really caused 3G to go slow.
What is 4G?
Whenever there is a great breakthrough over the present technology constraint, the next generation is acknowledged. Mobile WiMAX as a commitment of extra high data rate (75 MBPS) declares it as 4G mobile broadband technology. The 3G legacy vendors though don’t agree on WiMAX as 4G. They have themselves declared OFDMA based LTE as 3G & beyond with a commitment of 200/100 Mbps data rate. Nevertheless, many people call LTE as 4G. Declared features of 4G are as follows-
> MIMO & MU-MIMO technology
> Software Defined Radio, SDR (Use of different air interface, download new modulation/coding)
> Dynamic spectrum allocation (Spectrum on demand)
> Packet network with all IP system
> Voice & data any time anywhere
> Multimedia messaging, Mobile TV, HDTV
In normal practice vendors feel proud to declare a new generation of their product. Here LTE with OFDMA, being a great breakthrough over the WCDMA is not declared as 4G. The reason that makes sense is that, as they are still marketing 3G, declaration of 4G will contradict marketing 3G. Therefore they are calling it as 3G & beyond.
3G World Deployment Scenario
> GSA regularly surveys the evolution of mobile to 3G and beyond, and confirms:
> 275 commercial WCDMA operators in 116 countries at this moment.
> WCDMA is the leading 3G system globally with 72% commercial networks share
> Over 94.1% of commercial WCDMA operators have launched HSPA service
> 287 million WCDMA subscribers (Q4 08)
> 102.3 million WCDMA subscriptions added in 2008; 55.4% growth
> 286 HSDPA operator commitments in 121 countries
> 259 HSDPA operators commercially launched in 111 countries
> Over 71% of commercial HSDPA operators support 3.6 Mbps peak or higher
> Over 37% of commercial HSDPA operators support 7.2 Mbps peak or higher
> Two HSPA+ networks (21 Mbps peak downlink) now in commercial service
> 84 operators committed to HSUPA; 71 HSUPA operators launched in 42 countries
> 1,409 HSDPA devices launched by 169 suppliers; 242 HSUPA devices launched
> 271 HSPA devices incorporate GPS/navigation capabilities
> Over 1.83 billion GSM & WCDMA-HSDPA subscribers in HSPA-enabled networks
Bangladesh Market Scenario
Present Market
The mobile market scenario of Bangladesh is different in many aspects with outside world. The key points are as follows-
> High growth but low ARPU (probably the lowest in the world).
> Licensing 6 mobile and 12 PSTN operators question about regulator’s vision.
> Huge unnecessary investment has been made in absence of policy of resource sharing.
> Absence of policy against SMP (Significant Market Power).
> WiMAX licensing questions 3G licensing at present stage.
> PSTN operators are in the question of survival.
The key potential of the market is the high population density. Probably this factor has dared the operators to be aloof of resource sharing.
About 3G licenses
Asia Pacific countries like India, Pakistan, Thiland etc are in the cutting age to license 3G by 2009. Vietnam already issued license in last month. Bangladesh as part of the region is planning to award 3G license soon. Vendors are competitive to present their 3G product describing colorful services to the operators. They are also in touch with the regulator including the govt. policy makers to take immediate step toward 3G.
3G business risk
> Initial license fee & annual fee will burden the small operator.
> Challenge to meet up coverage & service target.
> Sufficient spectrum allocation (minimum 2 carrier) is necessary.
> Technology neutrality is essential for 3G license.
> WiMAX may lower the broadband tariff.
> Affordability of costly terminal & low PC penetration.
> Spectrum may be exhausted for flat data rate.
> Integration capability with 2G infrastructure.
> Interference with other band.
> Major renovation to introduce multi-standard.
Vendors’ logic about 3G Licensing
Vendors are egger to see licensing 3G/HSPA in Bangladesh. The downlink packet access of HSPA as declared is 14.4 Mbps and 3.1 Mbps in uplink. They assure the cost of 3G equipment very close to 2G/2.5G. They propose composite network architecture of the radio network with GSM/GPRS & UMTS/HSPA.
During 3G presentation they are also demonstrating the approaching LTE and committing about smooth migration by software up gradation only.
Migration challenge for us
Migration to new technology in Bangladesh is big challenge at this moment. Where most operators are striving to survive after the present investment, new investment with new technology will burden them like anything.
Technology know-how is a challenge for the operator to bargain with the vendor for cost effectiveness. There frequently happens uneven contract between vendor & operator due to technological knowledge gap. In most cases vendors are in advantage.
Purchasing proprietary equipment is another challenge to the operator. For proper optimization of the composite 2G/3G network, operator’s better choice is the proprietary vendor that becomes the ultimate inconvenience to the operator.
Though only the software up gradation is the commitment of 3G product series from UMTS to LTE, it will not be possible if new frequency band is allocated for LTE.
Software up gradation sometimes becomes unmanageable on bargain. When the operator will enter in 3G chain, software up gradation to higher protocol will burden the operator.
Should we license 3G?
Before awarding 3G license the regulator as well as the govt. has to go back and calculate the economy of the growth in mobile market. The exponential growth of mobile market during last 3/4 years has given a mobile handset to the rickshaw puller, labor and the school students as well. We have to calculate, if the rickshaw puller and labor would call from a PCO center. What growth in the GDP have we seen against such expenditure on foreign currency for mobile network elements and mobile handsets? If the growth was half, what would have lost?
Further, the regulator should think, would the operator who will be awarded the 3G license may get back the investment surely & survive in the market. If the 3G is awarded, all mobile operators will try hard to get the license. But Regulator should consider the innocence of the operator about the future & this will be the real success of the nation, not by earning revenue from the operator.
If it is decided to award 3G license really now, will the operator to pay additional licensing cost? How many Operators are to award 3G license? If only few operators are awarded, other may loose market share. If all are licensed, may we manage the frequency band as per requirement of the technology? If WCDMA license is awarded will it restrict OFDMA?
On the other hand, if we wait for the 2/3 years (with GPRS/EDGE) till the PC penetration reach to a optimum level (to use broadband effectively) and use WiMAX for broadband internet at this moment, what would we lose? Considering all the threats should we wait for LTE and save a huge additional investment on 3G?
Answer
I personally have no answer of my question. Of course I have my personal thoughts, but it does not matter. It is a matter of thought of the nation as whole. On every body’s participation, the ultimate decision must go in favor of us as committed by Almighty.
Writer: Mr. Habibur Rahman, GM, Marketing, Teletalk Bangladesh Ltd
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