Rudi Lamprecht Issue: Global-ICT 2002
Article no.: 10
Topic: Setting Standards
Author: Rudi Lamprecht
Title: President of the Board; Member of the Managing Board
Organisation: Information and Communication Mobile Group (Siemens IC Mobile)
PDF size: 40KB

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Article abstract

The transition to GSM in Latin America is a major mobile revolution. GSM is a proven, technology that gives users a multitude of mobile services. The costly R&D has been done and broad experience can be drawn upon, throughout the world, to implement new systems. Comprehensive standards will simplify mobile services and the transition to3G telephony.


Full Article

Latin America is on the brink of a major mobile revolution. With GSM, operators have the chance to select a standard that will allow users access to a multitude of mobile possibilities. Latin America can profit from GSM mobile telephony, a proven standard, reducing expenditures for costly R&D. Setting standards will also greatly simplify mobile services and the future transition to third generation telephony. At its most basic level, mobile telephony allows wireless voice communication. Ideally, the subscriber is always reachable, wherever he or she may be. Mobile phones are increasingly being used for more than just voice transmission. One of the biggest successes aside from voice transmission is SMS, an abbreviation for Short Message Service, through which text messages can be sent and received with mobile phones. Today the mobile phone can even be used to call up Internet content. In the foreseeable future, the mobile phone will be capable of that and much, much more. Transactions which require a stationary device like PCs will be extended to mobile telephones. New applications and services for a variety of everyday transactions, ranging from mobile commerce (e.g. banking, brokerage, trading, ticketing, auctions), mobile services (e.g. emergency, control, fleet management), mobile office (e.g. scheduling, e-mail) to mobile entertainment (e.g. music, videos, games, gambling) will be possible and part of everyday life. When these and other services are fully available, voice transmission may become secondary for many and the tool used to gain access to the world of mobile possibilities will rightfully earn the title of mobile device. These mobile devices will accompany the user throughout the day will help him or her to gain true independence. Users won’t be locked into strict sequence of events. They will be able to work when and where they want, order theatre tickets across time zones and access email wherever they are. With the freedom to do what they want, how they want and when they want, users will experience a qualitative betterment of their lives. The key for even the simplest of services working together, especially the visionary uses mentioned above, is compatibility. Voice transmission for example requires that the mobile phone be able to receive the transmission signals wherever the subscriber is momentarily located. If that standard is not met, limitations are set on the availability of the mobile subscriber, meaning that the use of the mobile phone is limited to a certain geographic area. Brazil is a perfect example: at the moment there are 2 dominant mobile standards in place, TDMA and CDMA. Roaming is virtually impossible within a single country, not to mention International Roaming. In this case mobility cannot really be ascribed to the mobile phone. The Latin American market as a whole is becoming increasingly important in the mobile world. According to Deutsche Bank Equity Research, more than 150 million subscribers are expected in Latin America by 2005, reflecting a mobile penetration rate of about 27 per cent. It is anticipated that there will be more mobile telephony connections than fixed network connections, as is already the case in Mexico and Paraguay. At the end of 2000 Mexico’s 12.3 million fixed line connections were surpassed by its 14.6 million mobile telephone accesses. Sixty percent of all telephone users in Paraguay use mobile phones. An additional challenge is posed by the need to offer affordable services and to produce mobile phones affordable by the majority of Latin America’s inhabitants. Global System for Mobile Communications (GSM) offers relief from the mobile woes plaguing the rapidly growing Latin American market. In more than 70 countries around the world, more than 646 million subscribers are already phoning with GSM, accounting for 67.7 per cent of the world’s wireless market according to the GSM Association. Next to the USA, Latin America currently represents the fastest growing GSM market. Advantages of the GSM standard include international roaming between the world’s GSM networks, flexible billing models and safety through SIM cards. Originally designed by Europeans for use in Europe, GSM soon gained international attention and was adopted by non-European countries. GSM doesn’t belong to one single company. It is an open, non-proprietary, system. The advantages for Latin America are clear. GSM is a proven standard which has been actively in use in Europe since 1992. This mature standard has proven itself time and again to become the most popular standard worldwide. There is no need for costly R & D and devices can be produced economically. GSM is already starting to establish itself in Latin America. To date, 19 network providers in Argentina, Antigua and Barbuda, Bolivia, Brazil, Chile, Cuba, the Dominican Republic, El Salvador, Mexico, Paraguay, Peru, Surinam and Venezuela have decided upon GSM. It is estimated that by 2006 more than a third of the market in Latin America will be using GSM. The next challenge for this dynamic market is finding a common platform so that subscribers can take advantage of mobile services. By deciding now, providers will be able to offer new mobile services on their GSM networks as soon as they are put into operation. Customers will be able to enjoy the advantages right from the beginning. Latin American providers can learn from their European counterparts and avoid setbacks in m-commerce by agreeing on a system early on. Establishing a standard for m-commerce requires a new way of thinking for the manufacturers and providers of mobile networks. There is little room for competitive thinking if a standard is to be successfully agreed upon. Cooperation will prove far more successful than confrontation. Such cooperation is seen in the consortium which has been established by Hewlett Packard, Lucent, Oracle, Siemens and Sun to standardize mobile payment and encourage the worldwide growth of m-commerce. This consortium, called PayCircle, aims to provide mobile device users, worldwide, a standard means for making mobile payments, regardless of the payment systems in use by local merchants or service providers. Incompatible payment systems have until now been a hindrance to the spread of m-commerce. PayCircle intends to define open and uniform interfaces based on existing standards. Subscribers can access their network operator’s or payment service providers’ mobile offerings without having to install any new software. Security can be maintained by using the built-in security mechanisms in mobile communication such as those provided by SIM cards. The PayCircle platform enables application developers to bring their products to market much faster than before. Like GSM, PayCircle is based upon a non-propriety concept. It is a non-profit organization open to anyone active in the mobile payment market such as application developers, payment service providers, merchants, content providers, manufacturers of payment systems, suppliers for mobile infrastructure and mobile devices, network operators, banks, credit card companies and others. In this respect, it is open to any number of companies operating in Latin America interested in getting an early start in m-commerce. A common platform also allows services to be offered at affordable terms because the providers don’t have to develop technology from the ground up. Acceptance for mobile solutions in the banking sector has already been found in Latin America . A number of Brazilian providers in Sao Paulo and Rio are offering wireless online banking services on the basis of Wireless Application Protocol (WAP). This project, in cooperation with Banco Bradesco, and has proven quite successful. A common platform would lend itself to ensuring that these services can eventually be offered on a wider basis to include all of Latin America. The question arises: If every manufacturer and provider is using the same standard, then how can they distinguish themselves from one another? The answer lies in offering innovative devices and attractive services. Users must be able to individualize their mobile devices to fit their needs and lifestyles. Services, on the other hand, must be well thought out and help users take full advantage of mobile technical innovations and let users make the most of a 24 hour day. Mobile phones will increasingly be seen as means for entertainment, adding a new dimension to mobile devices. The Mobile Games Interoperability Forum (MGIF), founded in July 2001 by Ericsson, Motorola, Nokia and Siemens, was established to define mobile games interoperability specifications. This includes application programming interfaces (APIs) which will allow game developers to produce and deploy mobile games that can be distributed across multiple game servers and wireless networks, and played over many different mobile devices. Ultimately, the aim of the initiative is to specify a global standard and to develop certification procedures to encourage a wide adoption of the standard. If this is successful, gaming has a chance to attract mass market attention and add value to mobile telephony. The success enjoyed by SMS is greatly due to standards like these. Regardless of the mobile phone brand or the provider being used, SMSs can be sent and received between GSM subscribers. So far, we have the current situation in Latin America and the need to adopt common standards. One cannot forget, though, that it is virtually impossible to install a GSM system overnight; measures must be taken to assure a smooth transition. Latin American network operators that are now installing GSM networks can benefit from the experience already gained in this area, not only in those Latin American countries which embraced GSM early on, but also from providers in the United States which are in the process of transferring to GSM. Large investments have been made by some in the Latin American market since 2000, particularly in Brazil, to get Latin America on the GSM path. This will require the transfer from TDMA (Time Division Multiple Access) and CDMA (Code Division Multiple Access) systems to GSM. GSM phones that also function with either TDMA or CDMA systems will help assure a smooth transition to GSM. Once GSM is in place and providers are operating on common platforms, the migration to third generation (3G) telephony can be greatly simplified. Europe’s first 3G networks have already been installed on the Isle of Man and in Monaco, almost exactly ten years since the start of the GSM standard in Europe. These networks are not just tests. These are fully functioning networks that provide such important features as customer care systems and billing systems. These 3G networks offer new multimedia applications, including rapid, mobile access to Internet content, entertainment offerings, games, e-mail services, online banking and video telephony. Conclusion By the time Latin America is ready for a 3G telephony, fully functioning system will be available. Additionally, Latin America will be able to profit from experiences made with the first 3G networks in Europe. Once in place, the possibilities are endless. Information to improve and change the lives of many – for educational, medical or business purposes, for example – will be available in the most remote regions. If this is to occur on a large scale, though, the industry will need to rapidly set comprehensive standards. Innovation and partnerships will also be essential to bring functioning and useful mobile telephony to Latin America both today and in the future.