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Prospects for the development of the third generation (3G) of the wireless telecommunications industry are becoming clearer as telecom operators and equipment suppliers worldwide continue rolling out business strategies and reaping benefits.
Big returns from 3G are beginning to catch on, with participants at last week's Fifth IMT-2000 Mobile Telecommunications International Forum in Beijing showing greater confidence in the progress of 3G worldwide.
Business opportunities in 3G are impending, though 3G "will take some time to get here" because there are still some issues that need to be addressed, they said.
Issues concerning 3G standards, its market, and its applications as well as network migrations are what concerns the industry the most.
Nevertheless, telecom operators and equipment providers attending the conference said they are ready to paint a 3G picture of their own in the future.
The soaring demand for high-capacity networks is the major driving force for the progress from the current second generation (2G) of mobile telecommunications characterized by GSM and CDMA.
Statistics indicate that there are 1.3 billion mobile subscribers worldwide. And the figure is likely to reach 2 billion by 2008.
But the 3G development aims to do more than just upgrade current telecommunications technologies.
Fast and high rates of data transmission and a huge network capacity are also great selling points for 3G.
According to the International Telecommunication Union (ITU), there are three recognized 3G standards including the European WCDMA (wideband code division multiple access), the US CDMA2000 and locally developed TD-SCDMA (time division synchronous code division multiple access).
The number of 3G subscribers has so far topped more than 100 million, including 4 million WCDMA users.
With growing maturity of WCDMA-related products and technology, its commercial-use networks are undergoing dramatic development, says David Ho, president of Nokia (China).
Figures indicate that by the end of April, there were 26 commercial-use WCDMA networks and seven pre-commercial use WCDMA networks worldwide.
The WCDMA networks have already contributed to push up ARPU (average revenue per user) for telecom operators, Ho said.
By May 4, 65 telecom operators were running CDMA2000 3G networks.
Paul Jacobs, executive vice- president of Qualcomm Inc, told China Daily that "the whole vision of launching 3G including WCDMA and CDMA2000 is becoming a reality now."
US-based Qualcomm is the major strength in pushing forward development of CDMA digital wireless technology.
China's TD-SCDMA standard, "has seen increasing interest from more and more telecom operators and equipment providers," said Zhou Huan, president of the TD-SCDMA Forum.
He says this development is accelerating as the TD-SCDMA Industry Alliance makes increasing progress.
The forum has recruited 14 members with many chip and terminal makers applying for admission.
Analysts believe that the surging number of 3G subscribers has laid a solid foundation for the quick development of 3G worldwide.
Figures indicate that there are more than 500 telecom operators worldwide using the technology, with the top 20 commanding 65 percent of the total market share.
The top 10 accounts for about 51 percent of the total market share.
Eight of the top 10 telecom operators Vodafone, T-Mobile, Orange, NTTDoCoMo, TIM, Telefonice, VerizonWireless and CingularWireless have started 3G strategies. The list excludes China Mobile and China Unicom. For the WCDMA network only, analysts projected that commercial use will exceed 40 by the end of this year from 17 at present.
On the other hand, for telecom operators, analysts say 3G-related costs and applications are perhaps even more important than technology.
Operators have to deal with the smooth integration of its current networks and businesses to cut costs.
According to Jean-Pierre Bienaime, president of UMTS, one-off, low price and abundant applications are the key elements that persuade subscribers to use 3G services.
The shortage of 3G terminals which are produced by only a few mobile phone makers has long been blamed as one of the key elements hindering network progress.
And terminals are failing to meet requirements for applications which require large data capacity and multi-media business.
The 3G network has become the best carrier for many wireless services such as voice, short message, multi-media data, video telephone and online games.
It is predicted that mobile data business will account for 20 percent of all mobile business in 2007 from 10 percent in 2002.
Problems also exist with the compatibility of terminals between different handset markers.
"But that is going to be solved with the spreading commercial use of 3G," Ho said.
The outcry for the 3G licences in China is getting louder as 3G deployment speeds up around the world.
However, Chinese regulators remain sober despite the continued push from telecom operators and equipment providers.
"The release of China's third generation of wireless telecommunications mobile licences will be based on the market," said Lou Qinjian, vice-minister of the Ministry of Information Industry, the country's telecom watchdog, at last week's 3G international conference.
He gave no indication of a timetable for the issuing of 3G licences to Chinese telecom operators.
"Telecom operators are allowed to choose 3G standards in line with their development strategies," he said.
He said the country would learn from experiences of European and Asian countries when issuing licences.
According to Wen Ku, director of the ministry's science and technology department, the ministry is working on 3G-related issues and part of the specification has already been completed.
In the areas of intellectual property rights, research organizations, operators and equipment makers are researching and negotiating IPR issues.
It is reported that China will issue 3G policies with reference to testing on 3G networks, which started in October last year, by September this year.
Participants in the testing include six major domestic telecom operators and equipment providers from home and abroad.
As the most populous market in the world, analysts believe China's 3G policies are likely to have a great influence on the world 3G market.
Analysts point out that China is waiting for 3G technologies to become more developed before issuing licenses.
However, no 3G technology is completely developed and only when it is used in real networks could its level be determined, according to a senior expert with the China Academy of Telecommunications Research of the ministry, who declined to be named.
Observers widely expect the government will make decisions on 3G licensing when it is certain home-grown TD-SCDMA is a viable option.
However, analysts are urging China to roll out its 3G licensing soon. China cannot afford more delays in the licensing of third-generation (3G) wireless communications telephony, they say.
Delays could harm the development of the country's telecoms industry, as they may be against the interests of the whole value chain.
A clear timetable will help all players, foreign and domestic, prepare resources planning, manufacturing and research and development (R&D), they said.
According to current market expectations, China Mobile, the world's biggest carrier by subscribers, would build a 3G system on the WCDMA standard, which is based on the GSM technology popular in Europe.
China Unicom would build a system based on the CDMA 2000 standard developed by Qualcomm Inc of the United States.
For the homegrown TD-SCDMA system, all six domestic telecom operators are doing network trial tests based on the system.
Analysts also expect the major fixed-line operators China Telecom and China Netcom will receive licences, as will the two existing mobile operators, China Mobile and China Unicom.
Tao Xiongqiang, president of TD-SCDMA predicted that if the 3G licences can be released next year, China's 3G mobile telecommunications revenue would likely reach 300 billion yuan (US$36 billion) in 2010. Revenue from 3G between 2005 to 2010 will accumulate to 1 trillion yuan (US$120 billion).
(China Daily June 8, 2004)
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