Frank Esser Issue: Europe 2005
Article no.: 7
Topic: 3G–a strategic priority for mobile operators
Author: Frank Esser
Title: Chairman
Organisation: SFR Cegetel Group
PDF size: 252KB

About author

Frank Esser is Chairman of SFR Cegetel. SFR Cegetel is France’s leading alternative operator in both mobile (SFR) and fixed (Cegetel) telephony. Mr Esser is a board member of the GSM Association and a member of the GSMA Public Policy Committee. Before joining SFR Cegetel as its CEO, Mr Esser served as Co-CEO of Mannesmann, in charge of the governance of its participations as well as of business development. Mr Esser has degrees in Economics, Business and IT, from Freiburg and Cologne (Germany) and wrote his doctoral thesis in economics.

 

Article abstract

Third Generation (3G) mobile technology is up to 30 times faster than GSM. It makes possible a vast range of advanced services, such as TV-quality streamed video over the mobile network, visio-telephony and TV. 3G is a strategic priority for mobile operators; they have paid billions of Euros for licences and in building 3G networks that provide continuity of service with GSM/GPRS. 3G’s success will depend upon the availability of affordable dual-band (3G/2.5G) phones, high quality, reliability and innovative services.

 

Full Article

The move to 3G is an essential technological step forward. Third Generation (3G) mobile technology offers the extra capacity needed in order to cope with the foreseeable growth in customer demand. The additional radio resources both resolve the problem of possible saturation of the voice network in the major towns and cities and make it possible to offer new services as part of the rapidly-growing multimedia sector. 3G is based on an advanced pan-European technology (UMTS) already adopted by more than 70 operators in Europe. It offers higher capacity and greater bandwidth than existing networks. Its main benefit, from the user’s point of view, is speed. Speed brings much faster access to services as far as the general public is concerned, enhanced performance for businesses and more user-friendly services for everyone, all achieved by faster transmission of data and shorter response times. UMTS is five to ten times faster than GPRS, which itself is three times faster than GSM. This technology offers high signal-handling capacity, which makes it possible to transport several minutes of TV-quality streamed video over the mobile network. These new video services will further boost the growth of new uses for mobile phones that is already starting to make itself felt. 3G is bringing a new dimension to existing services. It is a natural evolution of existing services, but it also represents a revolution in terms of the arrival of totally new services for mobile phones as visio-telephony, video and TV. The pragmatic approach is to build on the current use of existing services and to focus on developing these services to meet the real needs of the users, particularly as far as personal communications are concerned. Above all, 3G is ideal for business customers who need tools to improve productivity and performance. While away from the office, they need to have remote access to all their IT applications, including, in particular, their business email. Non-office based employees are already able to use ‘mobile office’ solutions, such as BlackBerry, PC cards or Smartphones. 3G provides these customers with the necessary speed and bandwidth required for the bandwidth-hungry applications used in business. It enables them to use a laptop computer with a mobile connection to access their email and open attachments, without needing a wired, or WiFi, connection to their IT network. It also enables them to access their company’s intranet quickly and securely. The far higher bandwidth capacity available, compared with GSM technology, means that it is likely that mobile phones will become much more widely used in business and may also become, why not, the main office phone, with a range of pricing options to suit various types of usage. 3G also meets the needs of the general public, who are able to benefit from the arrival on the market of new generation phones with large colour screens, integrated video features, hyper sound, visio-telephony and easy-to-use menus. 3G makes it much quicker and easier to search for content or to use multimedia services and it is quicker to send multimedia messages–with much better photo resolution–or short videos. It takes between five and ten times less time to download images than with GPRS. In short, it is easier to access multimedia services, which have more user-friendly features and which in general are much easier and more exciting to use. In addition to its uses in the business sector and in private life, 3G is a fantastic way of strengthening social ties and improving personal communications. Taking into account the penetration rate for mobile telephony in France–70 per cent of the population have mobile phones–3G offers an innovative way of encouraging the development of new services. The new services should bolster job creation and thus strengthen the local economic fabric. In this way, the economy of France as a whole should benefit from 3G. The growth of video and imaging services has given rise to a second generation of content and applications developers who have targeted mobile telephony as the best means for the mass distribution of their content. The music industry, among others, is very hopeful that 3G applications will boost their sales, since mobiles are in the pockets of all teenagers nowadays. The capacity of 3G to broadcast music securely and with high-quality sound, means that we are likely to see a growth in the number of music videos played on mobile phones. 3G, for much the same reasons, is also likely to be a source of growth for games developers. It is now up to consumers to take advantage of the new opportunities offered by these advances in technology. An ambitious 20-year project For several years, 3G has been a major strategic priority for many operators. Operators have collectively paid billions of Euros in initial payments for UMTS (Third Generation) licences and in many cases, they will also pay a percentage of their revenues for years to come. Although, generally speaking, 3G services have not yet generated revenues, operators have invested heavily–in addition to license costs–in the last three or four years to build their UMTS networks and to extend and improve the GSM networks. Several major European operators have been collaborating not only with each other, but, in the technical development work carried out in conjunction with the manufacturers of both network infrastructures and the phones themselves. All have benefited greatly from the expertise and experience acquired by the group as a whole. This collaboration has helped ensure a supply of dual-band 3G/2.5G phones, which is vital for the successful introduction of 3G. The roaming agreements put in place will enable customers to benefit from the major advantage of guaranteed continuity of their 3G services in at least 12 other countries. There are five essential preconditions to the launch of 3G in France: √ The first is continuity of service between UMTS and GSM/GPRS. Right from the start, the continuity of 3G communications services must be guaranteed by making use of dual-band phones (3G/2.5G) and also by providing for handover between the UMTS and GSM/GPRS networks. This sort of continuity of coverage, which requires a high level of fine-tuning of the networks, is vital in order to ensure that operators can provide a high-quality service to their customers. Early experiences with commercial 3G networks in other countries have, in fact, been marred by the lack of continuity of service. NTT Docomo was held back in the first months after its commercial launch by restricted 3G coverage in Tokyo and by the inability of its 3G phones to also use its existing 2.5G network. Hutchison ‘3’ was penalised in the same way by its lack of dual-band phones when it launched commercially in the UK and in Italy. Bearing this in mind, continuity between GSM, UMTS and WiFi must be provided, in order to provide customers with a guarantee of seamless service. Access to the new services must be available in a manner that is totally transparent to the customer, just as a wirelessly networked laptop selects the network that offers the best bandwidth capacity and quality. √ The second key to success is to have a wide range of affordable dual-band (3G/2.5G) phones. Early collaboration with a variety of manufacturers, as well as with other operators to guarantee the needed scale, is a huge plus in this respect. √ The quality and reliability of the services is the third prerequisite for the success of 3G in France. This is why, unlike with certain operators in other countries, the focus must be upon on quality and availability of service rather than upon the quick launch of 3G. Thanks to the collaboration among different operators and manufacturers, very high-quality service can now be provided consistently. √ A fourth key factor is that customers must be given access to truly innovative services such as video calling, video streaming and the like. Existing or future partnerships with content providers are needed to guarantee the ability to update and innovate services on a regular basis. √ The fifth precondition for success is to make the public aware of the benefits. By running major consumer education campaigns at sales outlets, special events and in the media, information and advice can be effectively passed on to potential users. This is needed in order to make sure that the public knows how to take full advantage of the new features and specific services made available by 3G. The main objective is to give customers relevant and straightforward advice and information that will enable them to pick up a new phone and try it out on the spot.