Technology and Business

---

---

Forward Links

Evolution in Retrospect

GSM Revolution

Future Speculation

(Author’s Note: Mobile Phones using cellular technology = Cellphone)

Evolution in Retrospect

Mobile phones using cellular technology i.e. cellphones were commercially introduced in 1980s. In cellular terminology, “mobile station” refers to the device carried by a mobile user and “base station” refers to the trans-receiver that connects these mobile stations to backbone telephone infrastructure. Base station is usually mounted on towers and communicates with mobile stations, present in a limited area around it, using wireless radio frequency. First generation of cellphones (1G) used analog signal transmission technique for communication between mobile and base stations. FDMA (Frequency Division Multiple Access) was the de facto protocol for distributing available frequency band among concurrent users. 1G cellphones were predated by mobile radio telephone technology (usually considered as 0G). Both 0G and 1G supported basic voice communication only.

2G introduced digital signal transmission technique along with TDMA (Time Division Multiple Access) and CDMA (Code Division Multiple Access) protocols. 2G needs much more careful consideration in order to understand the cellphone convergence as the two most prominent standards groups in worldwide cellular arena today – GSMA and CDG – have their roots here.

(Sources: Wikipedia.org, GSMWorld.org, CDG.org)

GSM Revolution

There are four major standards in 2G – GSM, CDMA-One, D-AMPS, and PDC. GSM is, by way far, the most widely used cellular technology today [1]. GSM provided efficient voice communication with limited support to data and internet applications. GSM implemented digital signal transmission technique and so it had many technical advantages over preceding 1G analog standards; higher voice quality, efficient utilization of radio spectrum, enhanced security [2], extended battery life, and data transmission capability are the major ones. Nonetheless, “technical” superiority over then existing standards is not the main reason behind success of GSM; indeed it is mainly attributed to the systematic way of GSM development, and to its cross country vision and low cost dimensions.

In year 1982, CEPT (Conference des administrations European des Posts et Telecommunication) established GSM (Groupe Spéciale Mobile) group for development of cellular communication standard for European countries [3]. The criteria for standard specified by CEPT was very important - spectral efficiency, international roaming, low mobile and base station costs, good subjective voice quality and compatible with ISDN [4]. It is conspicuous that scalability, interoperability and low cost were prominent considerations compared to technical enhancements. In fact, since inception, development of GSM was solely based on the belief that standards with localized focus will not generate large scale economies. Prior to it, each country developed its own standard, in turn, limiting its market to country boundaries.

In year 1987, Initial MoU (Memorandum of Understanding) was signed by12 countries to use TDMA and FDMA as access protocol [5]. It ensured support from corporate players which in turn ensured flexibility to choose supplier and quicker market presence [6]. First GSM network was launched in Finland in year 1991. Convergence of GSM networks was faster than that of older telephone systems or even internet; there were 50 million GSM subscribers, majority in Europe, within seven years from launch [7]. Soon later, it expanded beyond Europe into Australia, Asia and Arab world. Finally international roaming became an exclusive service offered by GSM due to its worldwide presence!

In July 1993, Qualcomm introduced another 2G standard called TIA/EIA IS-95 (Telecommunication Industry Association/Electronics Industries Association Interim Standard 95) aka CDMA-One. It was “technically” superior standard as it provided higher network capacity - 8 to 10 times more than AMPS analog and 4 to 5 times more than GSM [8]. First revision of it, IS-95A was published in May 1995 and first network had been deployed in September 1995 by Hutchison. Within six years since deployment, it reached 100 million subscribers [9]. Ironically, CDMA-One that was superior air interface than GSM/TDMA could not quite catch up with the later in terms of worldwide adoption. CDMA had around 325 million subscribers worldwide by December 2006 while GSM had already crossed 2 billion by then!

(In the chart above, “GSM” implies GSM and 3GSM; “CDMA” implies CDMA, CDMA 1.x and CDMA 1.x EV DO; “Others” include TDMA, PDC, and iDEN. Source: Wireless Intelligence)

In case of 2G, GSMA had the first mover advantage over CDG. On the contrary, CDG took one year lead over GSMA by launching first 3G network in year 2000; and since then CDG is consistently leading the timeline with launching higher data-rate standards before GSMA. It has certainly given advantage of higher 3G subscribers to CDG.

(Source: Wireless Intelligence)

Future Speculation

3GPP (3rd Generation Partnership Project) is a body established in December 1998 to produce and publish 3G standards for GSMA technologies. As you expect, there is also a parallel body for CDG technologies and that is called 3GPP2. There had been discussion between ETSI (European Telecommunications Standards Institute) and ANSI-41 (American National Standards Institute) to have a single consolidated efforts for producing 3G standards but somehow it was “deemed appropriate” to have two distinct bodies [10].

As of today (June 2007), both 3GPP and 3GPP2 have launched their mobile broadband standards - HSDPA (High Speed Downlink Packet Access) is from 3GPP, and ‘CDMA 2000 1x EV-DO Rev. A’ is the one from 3GPP2. These standards provide higher data-rate than their corresponding 3G counterparts (especially higher downlink data-rate). These higher downlink data-rates have facilitated users to enjoy high volume content (especially multimedia) from the internet. Both the partnership groups are now heading towards higher uplink data-rate standards which will enable users to send high volume content across the cellular network. The further roadmap of both the groups is pretty much planned (and published) and so in a sense, there is no much need to make any wild guesses about what’s coming next!

3GPP Roadmap

3GPP2 Roadmap

3GPP2 is definitely leading the timeline technology wise by launching higher data-rate standards first and there is at least a year’s lag before 3GPP catches it up. Also till date cellular subscriber statistics have been pretty much reflecting “who gets it first, gets it more”. On the other hand, overall GSM subscribers (i.e. 2G and 3G together) are dominating worldwide market with an enormous gap to cover for the second ranker. These “numbers” might tempt one to rush to the judgment about dominant technology in cellular future; but in my humble opinion, there is something more that is more important than these numbers and more likely to make this decision.

CDG seems to have a clear technological motivation behind it. The mission statement itself reflects that – “To lead the rapid evolution and deployment of 3G CDMA-based systems, based on open standards and encompassing all core architectures, to meet the needs of markets around the world". Also it has been pretty much successful towards its goal with being first in launching higher data-rate 3G standards. CDG technologies are more popular than GSMA technologies in Americas and some part of Asia especially South Korea. Moreover, it is the dominant 3G technology around the globe today and certainly a widely admired technology for high end customers who are more concerned about higher data-rates. Given that, CDG standards are in a better position on revenue side as data traffic essentially generates more revenue per subscriber than voice-only traffic. But as far as global leadership is concerned, CDG would remain a silver medalist because, according to me, CDG looks short on that global appeal which is woven in the very fabric of GSMA.

GSMA states it very simply – “Mobile is uniquely personal and GSM is uniquely global”. Since inception, GSMA looks more focused on wide coverage and being ubiquitous than riding the technology edge. The initiatives taken by GSMA consistently affirm their pursuit for being everywhere. SMS, a low cost option provided by 2G GSM, became enormously (somewhat unexpectedly high) popular in developing countries. Smartcard technology, that decoupled wireless service provider from handset manufacturer, allowed users to rent handset for temporary usage (instead of compulsorily buying one); it also created low cost entrance for new cost-concerned users in emerging markets. Current initiatives like PIM (Personal Instant Messaging), ‘3G for all’, and EMH (Emerging Market Handset) too have very similar orientation. ‘Mobile Bollywood Initiative’ to accomplish a step towards mobile-as-the-fourth-screen also looks promising in covering major population in the emerging Indian sub-continental market. Wireless prepaid services provided by GSMA standards deployments are causing rapid growth in GSM subscribers the continent of Africa. GSMA is in a best position to leverage their existing worldwide network infrastructure for high volume - low cost initiatives and that is the major aspect helping its deeper penetration into masses around the globe.

GSMA’s drive towards bridging the digital divide does imply lower revenue in immediate term but it is the path that will ensure their position as worldwide leader in the years to come. Unless GSMA technology fails drastically short on technology front, they have a long way to go. “"Imagine a world without wires; a world where verbal and visual communication is simple, convenient and reliable", is their vision; and it will become their prophecy.

[1] In year 2006, GSM surpassed subscriber count of 2 billion (82.4% of all global mobile connections). More than 690 mobile networks were providing GSM services across 213 countries by then. (Source: http://www.gsmworld.com)

[2] Large number of analog mobile phones became victims of cloning in 1990 that caused market loss of millions of dollars.

[3] GSM was acronym for “Groupe Spéciale Mobile” initially; later it is changed to “Global System for Mobile communication”.

[4] Audrey Selian, “3G Mobile Licensing Policy: From GSM to IMT-2000 - A Comparative Analysis”.

[5] FDMA divided frequency band into smaller frequency channels; TDMA further divided each frequency channel into timeslots.

[6] AMPS was the prominent technology before GSM and it was based on TDMA. TDMA had already been supported by major players like Nokia, Ericsson, and Siemens.

[7] To reach 50 million subscribers, fixed networks and internet took 50 years and 15 years respectively.

[8][9] 2G-CDMA-One Advantages (Source: http://www.cdg.org)

[10] http://www.3gpp2.org

[11] Next-Gen Now, TelLabs 2007