06-04-2013, 03:48 PM
3G MOBILE LICENSING POLICY:
[attachment=52888]
Introduction
Tremendous changes are taking place in the arena of mobile technologies, and the worldwide push toward 3rd
generation services is currently at the forefront of these transformations. Many questions surround the
concept of 3G – not only in terms of what it means and what services it will offer, but also in terms of how to
get there, which standard will be dominant, how long it will take to deploy, and whether it will be as
lucrative as expected given the current rush of exorbitant spectrum fees. This case study is designed to
examine some of these questions about 3G from the analytical perspective of predecessor 2nd generation
technologies, and specifically of GSM in Europe. The successful development and deployment of GSM
over the past two decades is most significant, if one is to accept the hypothesis that ‘experience counts’ in the
mobile arena. 3rd generation mobile technologies must, after all, in some way be the result of an evolution
from pre-existing 2G systems, whether this is because they are developed from overlays on 2nd generation
systems, or because operators deploying them must leverage pre-established 2G infrastructure or customer
bases. The two are in many ways inextricably linked, and therefore examining one necessarily implies
looking at the successes/shortcomings of the other.
Prior to the market liberalization of the 1990s, European telecom markets were firmly controlled by national
governments and their respective PTT monopolists. Over the past decade, European telecommunications
policy has been characterized by principles of market liberalization, harmonization of conditions of the
regulatory framework, and the promotion of the European telecommunications industry. “GSM momentum”
has been born of this environment, and is by far the biggest 2G system, with pan-European coverage and
systems also installed in Asia, Australia, North America and more recently in South America.
The Generations of Mobile Networks
The idea of cell-based mobile radio systems appeared at Bell Laboratories in the United States in the early
1970s. However, mobile cellular systems were not introduced for commercial use until a decade later.
During the early 1980’s, analog cellular telephone systems experienced very rapid growth in Europe,
particularly in Scandinavia and the United Kingdom. Today, cellular systems still represent one of the
fastest growing telecommunications systems. During development, numerous problems arose as each
country developed its own system, producing equipment limited to operate only within the boundaries of
respective countries, thus limiting the markets in which services could be sold.
First-generation cellular networks, the primary focus of the communications industry in the early 1980’s,
were characterized by a few compatible systems that were designed to provide purely local cellular solutions.
It became increasingly apparent that there would be an escalating demand for a technology that could
facilitate flexible and reliable mobile communications. By the early 1990’s, the lack of capacity of these
existing networks emerged as a core challenge to keeping up with market demand. The first mobile wireless
phones utilized analog transmission technologies, the dominant analog standard being known as “AMPS”,
(Advanced Mobile Phone System). Analog standards operated on bands of spectrum with a lower frequency
and greater wavelength than subsequent standards, providing a significant signal range per cell along with a
high propensity for interference.4 Nonetheless, it is worth noting the continuing persistence of analog
(AMPS) technologies in North America and Latin America through the 1990’s.
Initial deployments of second-generation wireless networks occurred in Europe in the 1980’s. These
networks were based on digital, rather than analog technologies, and were circuit-switched. Circuit-switched
cellular data is still the most widely used mobile wireless data service. Digital technology offered an
appealing combination of performance and spectral efficiency (in terms of management of scarce frequency
bands), as well as the development of features like speech security and data communications over high
quality transmissions. It is also compatible with Integrated Services Digital Network (ISDN) technology,
which was being developed for land-based telecommunication systems throughout the world, and which
would be necessary for GSM to be successful. Moreover in the digital world, it would be possible to employ
very large-scale integrated silicon technology to make handsets more affordable.
A Look Back at GSM
GSM Technology
One of the most important conclusions from the early tests of the new GSM technology was that the new
standard should employ Time Division Multiple Access (TDMA) technology. This ensured the support of
major corporate players like Nokia, Ericsson and Siemens, and the flexibility of having access to a broad
range of suppliers and the potential to get product faster into the marketplace. After a series of tests, the
GSM digital standard was proven to work in 1988.
With global coverage goals in mind, being compatible with GSM from day one is a prerequisite for any new
system that would add functionality to GSM. As with other 2G systems, GSM handles voice efficiently, but
the support for data and Internet applications is limited. A data connection is established in just the same
way as for a regular voice call; the user dials in and a circuit-switched connection continues during the entire
session. If the user disconnects and wants to re-connect, the dial-in sequence has to be repeated. This issue,
coupled with the limitation that users are billed for the time that they are connected, creates a need for packet
data for GSM.
The digital nature of GSM allows the transmission of data (both synchronous and asynchronous) to or from
ISDN terminals, although the most basic service support by GSM is telephony.17 Speech, which is inherently
analog, has to be digitized. The method employed by ISDN, and by current telephone systems for
multiplexing voice lines over high-speed trunks and optical fiber lines, is Pulse Coded Modulation (PCM).
From the start, planners of GSM wanted to ensure ISDN compatibility in services offered, although the
attainment of the standard ISDN bit rate of 64 Kbit/s was difficult to achieve, thereby belying some of the
limitations of a radio link. The 64 Kbit/s signal, although simple to implement, contains significant
redundancy.
The History of GSM
The Western European mobile wireless market has not been forged by market forces alone. Indeed as
mentioned previously, the harmonization of standards and interoperability were due in large part to
governmental efforts. These public sector influences carry over to the next generation of mobile cellular
networks, as well as through the ITU’s IMT-2000 initiative – which is embodied in UMTS movement in
Europe.20
The GSM story began in the early 1980’s, when European countries struggled with no fewer than nine
competing analog standards, including Nordic Mobile Telephony (NMT), Total Access Communications
Systems (TACS), and so on. In order to put the rise of GSM in context, it is important to note that the
climate of economic liberalization and opening up of new markets in Asia, Latin American and Eastern
Europe helped boost analog system subscriber numbers throughout the 1990’s. The roll-out of a multinational
global communications standard faced several formidable barriers. Operators were concentrating on
new methods for expanding old analog networks, using methods like NAMPS (Narrowband Advanced
Mobile Phone Service) by Motorola; unsurprisingly, there was resistance to the prospects of a digital launch.
Pan-European roaming was nothing more than a distant dream at that point, and capacity was a particularly
difficult issue. Europeans recognized the need for a completely new system – a system that could
accommodate an ever-increasing subscriber base, advanced features and standardized solutions across the
continent. Because of the shortcomings and incompatibility issues associated with analog systems, a
completely new digital solution was instituted.
Conference Des Administrations Europeans des Posts et Telecommunications (CEPT)
As soon as it became apparent that long-term economic goals in Europe had to be addressed, the CEPT was
formed in 1982 by the “Conference Des Administrations Europeans Des Posts et Telecommunications” to
address sector needs. The majority of CEPT’s membership was comprised of state monopolies, that were
accustomed to considering their own national interests as primary objective. Nonetheless, at that time,
awareness of the fact that the new industry’s economic future relied on high levels of pan-European cooperation
was tremendously important. Before CEPT formally launched the GSM project in 1982,
cooperation on analog standards for mobile communications in Europe had been attempted between France
and the UK, and France and Germany respectively. However, simultaneous efforts by national governments
to protect their own industries frequently interfered with the realization of gains from cooperation. In the
end, neither of the two projects was successful, and unilateral solutions in each of the larger European states
left the European market fragmented, and networks incompatible with one another.
[attachment=52888]
Introduction
Tremendous changes are taking place in the arena of mobile technologies, and the worldwide push toward 3rd
generation services is currently at the forefront of these transformations. Many questions surround the
concept of 3G – not only in terms of what it means and what services it will offer, but also in terms of how to
get there, which standard will be dominant, how long it will take to deploy, and whether it will be as
lucrative as expected given the current rush of exorbitant spectrum fees. This case study is designed to
examine some of these questions about 3G from the analytical perspective of predecessor 2nd generation
technologies, and specifically of GSM in Europe. The successful development and deployment of GSM
over the past two decades is most significant, if one is to accept the hypothesis that ‘experience counts’ in the
mobile arena. 3rd generation mobile technologies must, after all, in some way be the result of an evolution
from pre-existing 2G systems, whether this is because they are developed from overlays on 2nd generation
systems, or because operators deploying them must leverage pre-established 2G infrastructure or customer
bases. The two are in many ways inextricably linked, and therefore examining one necessarily implies
looking at the successes/shortcomings of the other.
Prior to the market liberalization of the 1990s, European telecom markets were firmly controlled by national
governments and their respective PTT monopolists. Over the past decade, European telecommunications
policy has been characterized by principles of market liberalization, harmonization of conditions of the
regulatory framework, and the promotion of the European telecommunications industry. “GSM momentum”
has been born of this environment, and is by far the biggest 2G system, with pan-European coverage and
systems also installed in Asia, Australia, North America and more recently in South America.
The Generations of Mobile Networks
The idea of cell-based mobile radio systems appeared at Bell Laboratories in the United States in the early
1970s. However, mobile cellular systems were not introduced for commercial use until a decade later.
During the early 1980’s, analog cellular telephone systems experienced very rapid growth in Europe,
particularly in Scandinavia and the United Kingdom. Today, cellular systems still represent one of the
fastest growing telecommunications systems. During development, numerous problems arose as each
country developed its own system, producing equipment limited to operate only within the boundaries of
respective countries, thus limiting the markets in which services could be sold.
First-generation cellular networks, the primary focus of the communications industry in the early 1980’s,
were characterized by a few compatible systems that were designed to provide purely local cellular solutions.
It became increasingly apparent that there would be an escalating demand for a technology that could
facilitate flexible and reliable mobile communications. By the early 1990’s, the lack of capacity of these
existing networks emerged as a core challenge to keeping up with market demand. The first mobile wireless
phones utilized analog transmission technologies, the dominant analog standard being known as “AMPS”,
(Advanced Mobile Phone System). Analog standards operated on bands of spectrum with a lower frequency
and greater wavelength than subsequent standards, providing a significant signal range per cell along with a
high propensity for interference.4 Nonetheless, it is worth noting the continuing persistence of analog
(AMPS) technologies in North America and Latin America through the 1990’s.
Initial deployments of second-generation wireless networks occurred in Europe in the 1980’s. These
networks were based on digital, rather than analog technologies, and were circuit-switched. Circuit-switched
cellular data is still the most widely used mobile wireless data service. Digital technology offered an
appealing combination of performance and spectral efficiency (in terms of management of scarce frequency
bands), as well as the development of features like speech security and data communications over high
quality transmissions. It is also compatible with Integrated Services Digital Network (ISDN) technology,
which was being developed for land-based telecommunication systems throughout the world, and which
would be necessary for GSM to be successful. Moreover in the digital world, it would be possible to employ
very large-scale integrated silicon technology to make handsets more affordable.
A Look Back at GSM
GSM Technology
One of the most important conclusions from the early tests of the new GSM technology was that the new
standard should employ Time Division Multiple Access (TDMA) technology. This ensured the support of
major corporate players like Nokia, Ericsson and Siemens, and the flexibility of having access to a broad
range of suppliers and the potential to get product faster into the marketplace. After a series of tests, the
GSM digital standard was proven to work in 1988.
With global coverage goals in mind, being compatible with GSM from day one is a prerequisite for any new
system that would add functionality to GSM. As with other 2G systems, GSM handles voice efficiently, but
the support for data and Internet applications is limited. A data connection is established in just the same
way as for a regular voice call; the user dials in and a circuit-switched connection continues during the entire
session. If the user disconnects and wants to re-connect, the dial-in sequence has to be repeated. This issue,
coupled with the limitation that users are billed for the time that they are connected, creates a need for packet
data for GSM.
The digital nature of GSM allows the transmission of data (both synchronous and asynchronous) to or from
ISDN terminals, although the most basic service support by GSM is telephony.17 Speech, which is inherently
analog, has to be digitized. The method employed by ISDN, and by current telephone systems for
multiplexing voice lines over high-speed trunks and optical fiber lines, is Pulse Coded Modulation (PCM).
From the start, planners of GSM wanted to ensure ISDN compatibility in services offered, although the
attainment of the standard ISDN bit rate of 64 Kbit/s was difficult to achieve, thereby belying some of the
limitations of a radio link. The 64 Kbit/s signal, although simple to implement, contains significant
redundancy.
The History of GSM
The Western European mobile wireless market has not been forged by market forces alone. Indeed as
mentioned previously, the harmonization of standards and interoperability were due in large part to
governmental efforts. These public sector influences carry over to the next generation of mobile cellular
networks, as well as through the ITU’s IMT-2000 initiative – which is embodied in UMTS movement in
Europe.20
The GSM story began in the early 1980’s, when European countries struggled with no fewer than nine
competing analog standards, including Nordic Mobile Telephony (NMT), Total Access Communications
Systems (TACS), and so on. In order to put the rise of GSM in context, it is important to note that the
climate of economic liberalization and opening up of new markets in Asia, Latin American and Eastern
Europe helped boost analog system subscriber numbers throughout the 1990’s. The roll-out of a multinational
global communications standard faced several formidable barriers. Operators were concentrating on
new methods for expanding old analog networks, using methods like NAMPS (Narrowband Advanced
Mobile Phone Service) by Motorola; unsurprisingly, there was resistance to the prospects of a digital launch.
Pan-European roaming was nothing more than a distant dream at that point, and capacity was a particularly
difficult issue. Europeans recognized the need for a completely new system – a system that could
accommodate an ever-increasing subscriber base, advanced features and standardized solutions across the
continent. Because of the shortcomings and incompatibility issues associated with analog systems, a
completely new digital solution was instituted.
Conference Des Administrations Europeans des Posts et Telecommunications (CEPT)
As soon as it became apparent that long-term economic goals in Europe had to be addressed, the CEPT was
formed in 1982 by the “Conference Des Administrations Europeans Des Posts et Telecommunications” to
address sector needs. The majority of CEPT’s membership was comprised of state monopolies, that were
accustomed to considering their own national interests as primary objective. Nonetheless, at that time,
awareness of the fact that the new industry’s economic future relied on high levels of pan-European cooperation
was tremendously important. Before CEPT formally launched the GSM project in 1982,
cooperation on analog standards for mobile communications in Europe had been attempted between France
and the UK, and France and Germany respectively. However, simultaneous efforts by national governments
to protect their own industries frequently interfered with the realization of gains from cooperation. In the
end, neither of the two projects was successful, and unilateral solutions in each of the larger European states
left the European market fragmented, and networks incompatible with one another.