Corporate Results of over 2500 companies Saturday, November 27, 1999
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Think Tank
This week we focus on a complete analysis of the
mobile communications industry
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Talking about the new generation 

 
Third generation technologies put the zing in the mobile business.

Coming generations would be confounded by the thought that people needed wires to connect telephone lines. They would not be able to digest the fact that phones needed to remain fixed and people needed to change their settings according to the telephone location. They would also not understand not having video conferencing facilities.

But then this is the way of the world of connections and communications. We are now on the threshold of the third generation of mobile technologies, commonly known as the 3G technologies. The first generation was ushered when convenient handsets communicated through analogue technology. Services offered then were mere calls and that too restricted to areas and locations.

But the technology of crunching voice signals into digits added a new dimension. Suddenly services like call waiting, forwarding and call line identification became possible. Digital services could efficiently use airwaves to send more voice signals. Enhanced developments in equipment, especially handsets, made this technology extremely popular.

But now all this could be rendered archaic as the convergence factor has stemmed in here too. There are technologies and standards that are being developed that would enable lightening speed Internet access on cell phones.

This means that users could download e-mail, carry out banking deals and shop through their cell phones. More than that, there could be high speed data transfers taking place through the ubiquitous cell phone.

The catalyst in ushering in 3G technologies over the world has been the International Telecommunications Union (ITU), an arm of the United Nations. It has pioneered the drive to standardise technologies and establish a commonality that would enable 3G technologies to be commercially viable.

Conflicting standards and the inability to connect with other standards would kill the prospect of 3G communications.

World over, three standards or loosely put communication protocols are operational. While a large part of the US and Japan either use the CDMA or TDMA technologies, Asia, Europe and some parts of the US use the global standard for mobile (GSM) technologies.

The ITU has undertaken an exercise "IMT 2000", which seeks to set technological standards and specifications and create links between various technologies. The "IMT 2000" would be using higher frequencies that would see quantum leap in the capacities available to transmit signals. It would then be possible to download data while whizzing in the car at a speed of 144Kbps and video conference with trade partners while walking on the street. As also surf the Net at 2 Mbps speed at a fixed location.

Importantly, the "IMT 2000" will see that existing 2G technologies are overlayered with hardware, enabling them to graduate to 3G technologies. Experts are of the opinion that there would be two CDMA based 3G technologies -- CDMA One and W-CDMA that would rule the roost. Along with this would be the Enhanced Data Rate over GSM Evolution or EDGE technology that would be developed out of a GSM platform.

And sooner it would make no difference which standard is used, for users could easily roam from one standard to the other, albeit with some initial snags. This would make a more universal market for voice as well as data transmission.

Incidentally, the countries to jump in the arena would be the ones with a developed cellular market. Finland has already auctioned 3G licenses and other players like Japan, Hong Kong and the UK are soon expected to arrive at the auction block. Full-fledged 3G operations are expected to commence by the end of the next year as countries overlay their existing standards with "IMT 2000" specifications.

A surprise early entrant to the 3G markets would be China while the US, besotted with archaic technology and conflicting mobile standards, is likely to be a late comer. Ironically, the country that attracts 90 per cent of Web visits and houses few of the most sophisticated software companies like Sun Microsystems and Microsoft would make a late entry. This just goes to prove that regulations do matter.

Anyway, the 3G technologies would come as a shot in the arm for many cellular firms battling against falling tariffs. Tall estimates are being made at the moment. According to Ovum London, UK market analyser, publisher: "3G mobile networks would carry the traffic of 63 per cent of world’s mobile users, expected to be a billion by 2010."

These systems would account for 66 per cent of the total cellular revenues, around $548 billion by that time. These services would encompass e-mail, e-commerce, video-conferencing and more. The sky is actually the limit.

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