Abstract:

Third generation mobile communication networks (3G) have been heralded as a

paradigm shift that will irreversibly change the structure of the telecommunications industry.

This research paper aims to provide the implications for upcoming 3G technology in

emerging markets. 3G communication has already reached a matured level in many parts

across the globe. Henceforth, the study of the success factors and the hitches faced is

advisable before the launch of this service in a developing market. In this paper, three mobile

markets have been selected to perform the case study of 3G. First is Japanese market which is

considered to be the most successful example of 3G implementation. Thereafter, Korean

market which represents the dilemma between W-CDMA and CDMA-2000 technologies.

Then in the last, the European market which is useful to analyse impact of regulator

interventions and sky-touching spectrum price.

This study found that the viability of 3G in emerging markets will depend on various factors

which will include the technical, social, demographical, and managerial aspects. Based on the

study, this paper proposes implications for rolling out the 3G services in emerging markets.

These implications cover the issues of technological considerations, regulatory bodies,

licensing procedure, market scenario, technology absorption etc. The result of this study can

be helpful for the successful migration to 3G mobile technology, and the implications

mentioned can serve as a means to catch up on the lost time and minimize unnecessary

mistakes along the way.

Keywords:

3G, 2G, FDMA, TDMA, CDMA, W-CDMA, CDMA-2000, TD-SCDMA, mobile market,

mobile internet, QoS, VoIP, ARPU, Value-chain, Paired spectrum, HSDPA

Introduction:

The two biggest success stories in telecommunications over the last decade have been

the Internet and the mobile phone ‘(Lehr, & Mcknight, 2003)’. 3G technology represents the

workbench using which a user can experience seamless connectivity on the go. 3G is

abbreviated “Third Generation”, and is planned and devised for the real multimedia cellular

phones.

However ITU (International Telecommunication Union), which is the organisation

responsible for 3G regulation, has not specified any stringent conditions for data rates. By the

statement: “It is expected that IMT-2000 will provide higher transmission rates: a minimum

data rate of 2 Mbps for stationary or walking users, and 384 kbps in a moving vehicle”

‘(ITU)’, the ITU does not actually clearly specify minimum or average rates or what modes of

the interfaces qualify as 3G. This brings some level of flexibility for operators, service

providers and manufacturers.

The radio interfaces of IMT-2000 are specified in the recommendations by IMT-2000. The

standards accommodate five possible radio interfaces. These are:

W-CDMA, CDMA-2000, TD-SCDMA, UWC-136 and DECT.

Although there are five terrestrial standards, most of the attention in industry has been

towards the CDMA standards (i.e. W-CDMA, CDMA-2000, and TD-SCDMA).

Importance of 3G:

3G provides a medium of convergence between mobile and broadband internet. It

provides very high speed internet access coupled with mobility which will fulfil the high data

requirements in urban and metropolitan circles. Also it provides the best alternative so far to

bridge the digital divide in broadband penetration between the urban and rural areas in a

developing country.

3G network is intended to provide “Always on” connectivity to users. A real “digital era”,

“The age of high speed internet connection.”, “Video phone calls” and “Substitute for

notebook PCs” are common perceptions of the 3G services. The major impetus for 3G is to

provide for faster data speed for data-intensive applications such as video.

Problem Statement:

Analysing case studies of 3G in selected countries and deriving implications for Emerging

markets by means of an implicative research.

Deployment of 3G network architecture requires a huge capital investment from the

side of the service provider. Hence, it becomes a mandate that a study of those nations where

3G has been implemented, should be done so that an appropriate implication for rolling out

3G services can be given.

Research Methodology:

The topic of this research intends to be studied with the means of Multiple-Case

Study approach. Three case studies pertaining to 3G development and implementation have

been done. In each case, each case is organised as per the following framework: Motivation,

Background, Policy Architecture, Industry Assumptions, Decision Making, Post

Decision Scenario and at last, the Implications for Emerging markets from that case.

Motivation describes the reason for selection of that particular country or continent.

Background illustrates the process of mobile evolution to 3G in each case. Policy architecture

tells about the policies and regulatory conditions in each case. Industry assumptions refer to

the expectations that the telecom industry had from 3G. Decision scenario details the

important decisions taken by the government and the companies which affected the 3G

implementation process in some or the other way. Post decision scenario describes the result

of the decisions taken. And finally, on the basis of study and analysis of the case, the

implications found suitable for emerging markets are written.

Table 1:

Country selected 2G standards used

(Before 3G)

3G standards Regulator’s

behavior

JAPAN PDS & PHS

(Closed market in

2G)*

W-CDMA and

CDMA2000

No imposition of

standards by

regulator.

SOUTH KOREA CDMA-ONE

(Single standard)

W-CDMA and

CDMA2000

Operators wanted W-

CDMA whereas

EUROPE GSM/GPRS/EDGE

till 2001**

(open market)

W-CDMA

(till 2004)***

Regulator imposing a

single standard

throughout.

Table 1 : Comparison of cases

Table 1 shows a brief comparison of the three cases dealt in this paper. This will give a broad

idea about the differences in the countries.

* Closed system here refers to the fact that for 2G, Japan used PDC and PHS technologies

which were not used in most of the other countries.

** CDMA service was started in 2001 by Zapp Mobile (Telemobil) in Romania.

*** CDMA 2000 1X EV-DO service operating in 450 MHz band was launched by Eurotel in

Czech Republic in 2004.

Case studies:

I. Case study of Japan

Motivation

In case of Japan, mobile internet market was well established before launching 3G. It

is the pioneer in the successful implementation of 3G technology. Both W-CDMA and

CDMA-2000 standards were used. Hence, Japan represents the case of a “Closed system

deploying dual 3G standards”. Apart from this, it is very interesting to study the business

model of NTT-DoCoMo to see how they have placed themselves at multiple positions in the

value-chain.

Background

The modern era of digital mobile communication in Japan began with the launching of

the 800MHz frequency band in the year 1993. The main technology of operation was PDC

(Personal Digital Cellular) and later in the year 1995 PHS (Personal Handy Phone Systems)

was also launched. Mobile communication market in Japan became a closed market because

of the implementation of these two standards as these two standards were different from those

used in majority of other countries. Though mobile usage increased tremendously after 1995-

96 but the diffusion of internet was sluggish as only 14.4% of the population used the internet

in 1999 ‘(Srivastava, 2001)’.

The scenario changed after the introduction of the mobile internet based service called i-mode

by NTT DoCoMo on February 1999 followed by KDDI and J-phone with their own separate

services, EZ-web and J-sky respectively. This service became highly successful and in 2001

approximately 78% of the mobile users were using the mobile internet ‘(NTT DoCoMo)’.

Fig.1 compares the growth in number of NTT-DoCoMo subscribers of cellular phone, i-

mode, and FOMA services.

Fig. – 1 Evolution of cellular services in Japan

This tremendous increase in the usage of mobile internet services called for higher data rates

and the need for international roaming, which were previously not possible because of the

prevailing closed system as mentioned. This created a need and background for 3G

implementation in Japan.

Policy architecture

To study various aspects of 3G, ARIB (Association of Radio industries and Business)

had established Japanese IMT-2000 study committee in 1993, which, after a lot of study

concluded that W-CDMA was the best suited technology for implementation of 3G

‘(Srivastava, 2001)’. MPT and TTC (Telecommunication Technology Council) were the

bodies responsible for drafting the policies related to 3G.

Beauty contest method of licensing was chosen. No foreign operator entered the licensing

process ‘(Srivastava, 2001)’. The possible reasons for this can be the closed system in Japan

and the unfavourable timeline for deployment set by the regulator.

Industry assumptions

The biggest problem of the telecom operators were the continuous fall in the values of

ARPU (Average Revenue Per User). Also the competition between operators had increased

and the main differentiating parameter between services was the internet services provided by

the operators. Ergo, each operator wanted to provide better multimedia services than its

competitor. Operators saw 3G as a solution to their services requirements and also as a means

to further increase their subscriber bases. As 3G promised more data rates, better services

could now be offered. The aim of the companies was to encourage more and more internet

usage to create a strong revenue generating model.

Decision making

Taking NTT DoCoMo into consideration, they decided to implement 3G using W-

CDMA technology. The popularity of any technology lies in the attractive services that are

offered in it. One of the killer applications given by DoCoMo is content provided by

subscribers themselves and then forwarded to friends and families. Profit sharing model used

by the company in providing I-mode services proved to be a great success and they decided to

adopt the same model for 3G. Most of the profit earned was given to different actors of the

value chain, a model which is quite different from what is followed by other companies

around the world. For e.g.: DoCoMo does the billing for the official content providers but

takes only 9% of the revenue so collected ‘(Lindmark, Bohlin, & Andersson, 2004)’.

Post decision scenario

Choosing W-CDMA standard to provide 3G, NTT DoCoMo faced intense

competition from its competitors. One of its competitors (using CDMA 2000) deployed a

simple infrastructure conversion system which was cost effective and helped the operator to

rapidly expand its network coverage. Consequently, this operator who lagged behind

DoCoMo in 2G overtook the operator in the area of 3G by a great margin ‘(Henten, Olesen,

Saugstrup, & Tan, 2004)’. Profit sharing model as expected proved to be a great success.

More and more content providers were attracted despite the company imposing some

restrictions on them. This resulted into generation of rich contents.

Implication for emerging markets

One lesson that can be learned from the case of Japan is that for mobile internet to be

successful in emerging markets there must be a balanced and efficient mix of industry

coordination, service experimentation, and dynamic competition. In Japan, NTT DoCoMo

played an industry policy role ‘(Lindmark, Bohlin, & Andersson, 2004)’. It was able to

control directly or indirectly all the members of the Mobile internet value chain (system) and

thus was very effective in launching fully coordinated user centric services in the beginning

which provided the momentum for the mobile internet industry.

The terminal market in Japan is the most competitive handset market in the world. This large

competition provided customers with the handsets which made the 3G experience bliss for

them. Therefore in emerging markets too, the terminal industry has to be ready for 3G.

The most important lesson that can be learned from Japan is the profit sharing model used by

the operators. For eg.NTT DoCoMo takes only 9% of the revenue of the content providers as

handling charge. This means that the monopolistic temptation of short-run profit

maximization must be tempered by a more long-run service growth orientation based

approach.

At the time of 3G licensing in Japan, all PDC operators became subsidiaries of one of the

three operator groups KDDI, DoCoMo and J-Phone. The same scenario can also occur in

emerging markets. One important question raised from the case of Japan is regarding the type

of technology used to implement 3G in emerging markets. Will technology opted by operator

decide their performance in the market? Are CDMA operators at an advantage compared to

GSM operators?

II. Case study of Korea

Motivation

3G in Korea was launched very much parallel to that in Japan, but the conditions there

were contrasting. Korea emerges as a good case to study because it describes the effect of

regulator interventions on the implementation of 3G. The regulators got biased towards one

technology which proved to be fatal for the success of the technology.

Background

Mobile phone services in Korea started with AMPS (Advanced Mobile Phone System)

technology in 1984. The sector was highly monopolized until 1994 when it became privatized

‘(Lee, Kwak, Kim, & Kim, 2009)’. The first CDMA service was successfully launched by

SKT in 1996. In 1997, PCS companies also entered the telecom market. After this, the

CDMA-one synchronous mode service was employed for the first time in the world by Korea

in 1998 which proved to be very successful ‘(Hee, 2008)’.

At the end of Feb 2007, the mobile penetration had reached 88.7 percent as compared to less

than 4 percent in 1994. The major players in the market were SKT, KTF and LGT with the

market shares of 50.4%, 32.1% and 17.4% respectively in 2006 ‘(Lee, Kwak, Kim, & Kim,

2009)’.

Policy architecture

The telecom regulatory body in Korea, the MIC (Ministry of Information and

Communication) has always maintained a tight control on the industry and has influenced the

industry a lot through its decisions. After the success of CDMA in 2G, the MIC wanted to

continue the success of synchronous mode i.e. CDMA in 3G. Korea wanted to implement 3G

using CDMA2000 1X because as the world leader in CDMA technology, it was expected of

it. Choosing CDMA technology will also have allowed operators to contribute to domestic

economy as domestic handset manufacturers were pioneers in CDMA technology. All the

operators wanted to employ W-CDMA as it was a global trend and had better market

potential. The MIC decided to issue two licences for W-CDMA and one for CDMA2000 1X.

Only one licence was made available for CDMA2000 1X so as generate maximum bid as

there were three incumbent CDMA operators ‘(Hee, 2008)’. In December 2000 MIC granted

W-CDMA license to the two consortia: SK IMT (Now SKT) and KT Icom (Now KTF).

Shortly in August 2001 the CDMA 2000 1x EV-DV8 license was also given and this time to

LG Telecomm ‘(Hee, 2008)’.

Industry assumptions

There were many assumptions and expectations from 3G as in the case of any new

technology. The first assumption was from the government side that there is a huge need for

the IMT-2000 services which as it turned out was not true therefore resulting in poor take up

by the customers. Also the government expected the investment in IMT-2000 to give further

impetus to the country's economic growth and national prestige as an IT leader ‘(Hee, 2008)’.

Also, IMT-2000 was seen as a means of revitalizing the depressed economy due to the

financial crisis the Korea faced in 1997.The Industry assumed the implementation of 3G

would provide higher speeds so better multimedia services. Also it would have given some

operators the opportunity to improve their global footing.

Decision making

There were many decisions taken by the government and the industry which

determined the way in which the 3G developed in Korea. One was the MIT's decisions about

the technology standard to be chosen for IMT-2000. The government was under pressure

from the operators and the market which demanded W-CDMA as it was the de facto standard

worldwide and had better market potential. But still the government wanted to continue the

CDMA evolution even though the all the operators were more inclined towards the W-CDMA

standard and hence forced LGT to take the synchronous mode license ‘(Hee, 2008)’.

The timing of the introduction of IMT-2000 in the market was one of the important decisions

to be taken by the government as the timing is one of the main factors which decides the

success or failure of a technology or new service.

The operators decided to invest more in the existing network based on 2.5 technologies than

the IMT-2000. This was based on the market analysis done by the companies. Second

decision was to rely on a foreign company, Qualcomm for the core technologies and for

further research. This was the factor on which the future development of the CDMA

technology was based. The decision to move to 3.5G without spending much time at the 3G

stage was one of the bold decisions taken by the Korean government ‘(Hee, 2008)’.

Post decision scenario

The decisions taken by the Government and the industry affected the industry very

much. The unclear policy of the government on the IMT-2000 standards disturbed the

industry a lot. Due to the dual technology market, the handset manufacturers were burdened

to cover the dual-band, dual-mode operations. Also forcing synchronous mode on LGT

proved fatal for the company which finally resulted into abandoning of the license in July

2006 after failure to launch the service in the stipulated time frame. This resulted into wastage

of a scare resource, spectrum.

There was no such heavy demand in the market for 3G services. Also the people were getting

the similar services with the existing CDMA2000 1X (2G) networks. This in turn led to lack

of interest of even the W-CDMA license winners to roll out the services. SKT and KTF used

the IMT-2000 spectrum minimally and introduced the broadband services Wi-bro and Net-bro

respectively only to comply with the contractual provisions with MIC.

3G services had limited availability because of uncertainty about profitability, which caused

delays in network investment. Meanwhile, rapid developments in mobile phone technologies

enabled the Korean mobile telecom market to evolve directly into 3.5 generation (3.5G)

without spending much time at 3G stage. Now, in the new Scenario, HSDPA (High Speed

Downlink Packet Access), CDMA2000 1X EV-DV and Wi-Bro (Mobile Wi-max) are

competing as the 3.5G standards in the market ‘(Hee, 2008)’.

Implications for emerging markets

The most important implication from the case of Korea is that the demand for IMT-

2000 should be market driven and not policy driven. The industry should not be pressurized to

implement the technology unless there is a real need for that technology. In Korea,

CDMA2000-1X was providing most of the services that can be provided using 3G and thus

there was very less incentive for the operators and the subscribers to accept the technology.

Also, the market should be free to decide on the technology to be used for 3G implementation

and the regulator or the government should not press the burden of a particular technology on

the industry. One more thing is that the technology evolution and its path decision is a long-

term assessment within the socio-technological system and the decision should be driven by

individual carriers so that they can decide upon the technology in which they can serve the

society in a better way.

Investment timing is very important for the efficient and proper use of a technology. The take

up of 3G (before HSDPA) in Korea was very less (only 0.5 million subscribers added in three

years). The telecom industry in any country should have a fast response towards the

technological advancements.

III. Case study of Europe

Motivation

Europe had been ahead of rest of the world in terms of 3G licensing which started in

the year 1999 in Finland. The cost paid for the spectrum was quite high in most of the

European nations which proved to be a great setback for the operators. Also regulator’s

imposed coverage requirements, network sharing and spectrum sharing policy needs to be

looked upon. In contrast to Japan, here mobile internet was not so popular which hindered the

success of 3G during the initial years of its launch.

Background

The Digital mobile communication era in Europe started with the formation of a

working group called GSM (Groupe Special Mobile) formed after the European Conference

of Postal and Telecommunications Administrations (CEPT) in 1982. This group had the task

of establishing the specifications of a digital mobile technology which will have a pan-

European nature and allow roaming throughout the whole continent. In 1987, a memorandum

of understanding was signed by 13 countries to develop a common cellular telephone system

across Europe. The frequency bands 900 MHz and 1800 MHz were selected for the GSM

technology operation. Finally, the first GSM network was launched in 1991 by Radiolinja in

Finland ‘(Fuentelsaz, Maicas, Polo, 2008)’. As the regulators in European Union chose to

impose a common standard, GSM spread throughout the continent in a very short period of

time and achieved the penetration rates never achieved before ‘(GSM World)’. In 2002, 95%

of the nations worldwide had GSM networks ‘(Fuentelsaz, Maicas, Polo, 2008)’.

Initially the mobile communication meant only voice communication but the importance of

non-voice services started increasing from the year 1995 when the SMS (Short Messaging

Service) was launched on the GSM network. The demand for data services increased further

and this resulted into trials for WAP (Wireless Application Protocol) in 1999. A WAP

browser provides all of the basic services of a computer-based web browser but simplified to

operate within the restrictions of a mobile phone, such as its smaller view screen ‘(WAP)’. To

support WAP, GPRS (General Packet Radio Service) which is packet-oriented mobile data

service was launched in 2000 ‘(Fuentelsaz, Maicas, Polo, 2008)’. To retain the competitive

edge that the European telecom industry enjoyed, the UMTS (Universal Mobile

Telecommunication Services) licenses were given to the operators starting from the year

1999, when the first 3G licensing process was held in Finland ‘(Whalley, Curwen, 2006)’.

Policy Architecture

The European Commission’s Competition Directorate-General and Information

Society Directorate-General have powers of regulation over the mobile telecommunications

sector. Like in the case of 2G, the Europe chose to impose a common standard in 3G and W-

CDMA was chosen as the common standard ‘(GSM World)’.The 3G licensing in most of the

Europe held in the period 1999 to 2001. The licenses were given using different mechanisms:

an auction, a tender, beauty contest + auction, beauty contest + fee, direct allocations etc. In

some countries the number of 3G licenses offered was kept greater than that of 2G so as to

encourage new entrants and thus increase competition in the market. The UK and German

auctions generated very large amounts of money, $43.2 billion and $46.1 billion respectively

‘(Whalley, Curwen, 2006)’. But this method of licensing was used only in small number of

countries. Most countries used the Beauty contest type of licensing method.

Throughout Europe, regulators imposed strict conditions on the winning companies. The

companies had to complete stringent coverage requirements like in Austria where the

licensing held in Nov 2000, the operators were expected to cover 25 percent of the population

by 2003 and 50% by 2005.

The huge amount of money paid by the companies in the licensing process resulted into huge

debt for the companies. The companies were not able to roll out the services and hence

resulted into large delay in the launch of the 3G services. Many companies like Telesonera,

Eelefonica etc. which were in investment mode before licensing process came into

disinvestment mode ‘(Whalley, Curwen, 2006)’. They had to restructure themselves to sustain

themselves and maintain their competitive edge ‘(Sharma, 2009)’.

Industry and Government assumptions

The European operators saw 3G as a tool to maintain their competitive edge in the

global market. Also, by introducing W-CDMA in the same manner as used for GSM, the

regulators expected fast take up of W-CDMA, which didn't happen actually ‘(GSM World)’.

Some companies also took 3G licensing process as an opportunity to expand its horizons

‘(Whalley, Curwen, 2006)’. Regulators offered more number of UMTS licenses as compared

to that of 2G with a view to enhance the competition in the market ‘(Whalley, Curwen,

2006)’. Also, 3G implementation was expected to support services which will help stop the

continuous fall of ARPU.

Decision making

Some decisions were taken by the government and the industry which affected the

implementation of the 3G technology in Europe. One such decision was that of the European

regulators to choose W-CDMA as the UMTS standard. Also unlike US where the market is

allowed to choose the technology, the Mobile technology standards in Europe were imposed

by the regulators on the operators. The incumbent operators in most countries used the wait

and watch policy at the time of roll out of 3G services. It was always a new entrant like

Hutchison Whampoa who was the first to launch 3G services.

Post Decision Scenario

The regulators in Europe imposed W-CDMA as a common standard for UMTS so that

complete technology compatibility can be achieved throughout Europe and it can grow at a

fast pace due to wide acceptance. Though in GSM, this imposition resulted into tremendous

growth for GSM, in case of W-CDMA, this strategy didn't work out. The main reason for this

was the difference in the market conditions at the time of launch of these technologies. At the

time of launch of GSM, the customers compared the utility of acquiring a GSM mobile with

that of not acquiring it. Whereas in case of UMTS, the customers were not even fully aware of

the advantages of UMTS over GSM ‘(GSM World)’. The operators due to fund deficits were

not able to provide the services and acquire content providers which could have actually

exhibited the difference between UMTS and GSM.

One of the key factors of the UMTS implementation in Europe derives from the way in which

the technology standard was decided. (Globally regulated vs. open market) ‘(GSM World)’. A

common standard would have meant higher penetration rates, service and feature availability,

new technology development and deployment and better coverage. But in the case of 3G, the

operators were not able to coordinate with other telecom actors like phone manufacturers and

application providers thus resulting into delay in roll out of services, shortage of handsets and

new advanced services for the users. One reason for this can be the huge debt on the operator

companies, the other reason can be the entry of other standards like GPRS and EDGE

(Enhanced data rates for Global evolution) into the market, which provided the services which

were nearly of the same quality as that of 3G.

The incumbent operators were not that interested in fast roll out of 3G services, because they

thought that they were already earning massive revenues from their 2G networks. Also the 3G

technology was immature and that handsets were either unavailable or were difficult to use.

Such behaviour was understandable given the market conditions at that time ‘(Whalley,

Curwen, 2006)’.

Implications for emerging markets:

One of the main highlights of the 3G implementation in Europe was the high auction

amounts paid in countries like UK and Germany which was the result of over estimation of

the utility of 3G by the operators. This in conjunction with the internet bubble burst of 2002

made the telecom companies come under huge depts. To avoid such circumstances, the

companies should not bid above the actual value of the 3G spectrum value. Also the regulator

should design the licensing process in such a way so that the results of the licensing does not

deviate the market.

Also, 3G services can become successful only if the equipment for its implementation is

available. That is, the users should have access to efficient and cheap handsets and new

advanced interesting services.

Internet bubble burst: The stock market downturn of 2002 in which a sharp drop in stock

prices in stock markets across USA, Canada, Asia and Europe was observed.

3G market: The Indian scenario

The Indian market for telecom services is one of the fastest growing in the world. The

penetration of wireless services stood at 38% at the end of July 2009, while the year-on-year

growth in mobile subscribers in the last year was 49% ‘(DoT, 2009)’.

The regulation in Indian telecom industry is provided by TRAI ‘(Telecom regulatory

authority of India)’ and Department of Telecommunication ‘(DOT)’, Ministry of

communication and Information Technology. For 3G licensing, the auction mode of licensing

has been chosen by the government. There are no restrictions imposed by the regulator on the

technology to be adopted for providing services in the 3G Spectrum.

In March 2009, there were only 118 million wireless internet subscribers in India which

reflects a large scope of improvement in mobile internet industry in India ‘(DoT, 2009)’. The

increasing take-up of wireless internet (through mobile handsets) gives an indication of the

potential opportunity. Figure 2 indexes the increase in number of wireless internet

subscribers. The scale adopted is first yearly, and then for every quarter.

Fig 2

Conclusion

Three cases considered provided for different market conditions that can exist relating

to 3G and thus their study gives a complete insight into the 3G implementation process. It was

found that take-up and fate of 3G was dependent on various parameters. These parameters are

discussed as under:

Regulatory conditions: As seen in the case of Korea, the regulator favoured CDMA2000 1X

as the standard for 3G as a result of which LGT was not able to roll out its 3G services.

Presently Indian regulatory bodies have put no such conditions. It needs to remain the same.

Licensing procedure: The licensing procedure determines whether the companies have

sufficient capital after paying the cost of the license. The licensing model should be able to

generate revenue for the government and at the same time, should not prove bring any

hindrance in rolling out of services. Like in case of Europe, the companies came under huge

debt due to the bad licensing model which in turn affected their capability to launch services.

Market conditions: Market conditions before and during deployment will also play an

important role in the take up of a new technology. For e.g. the high mobile internet

penetration in Japan helped 3G to grow faster there. There is a need to create awareness about

mobile internet in India to achieve this objective.

Handset sufficiency: While first half of the 3G market is about network services, handsets

fill the second half of it. 3G will require compatible handsets. The handsets should as well be

backward compatible, i.e. should be capable to revert back to 2G network if in case it is

needed anytime.

Value-Chain: One important factor which will determine the success or failure of 3G is the

coordination that the telecom operators will be able to achieve with other actors of the value

chain like equipment vendors, content providers, service innovators, ISPs etc. This point is

supported by the example of NTT DoCoMo which through its brand image and excellent

revenue sharing model was very successful in coordinating well with the other actors of the

value chain and hence was able to promote the mobile internet in Japan in a very big way.

R&D work: There should be proper research done in emerging markets, to analyze the

market for 3G and to infer what type of services should be best suited, considering the market.

The telecommunication companies should give sufficient attention to this area so as to

optimize their services.

Migration to higher technologies: Once 3G is implemented, the scope for the next level

technology i.e. 3.5G (HSDPA) should be analyzed. Like in South Korea, the 3G market grew

very rapidly when it was transformed to 3.5G technology. So, aspects of technology migration

should be constantly analyzed.

Technology absorption: This new technology should be started in a mode that it can be

absorbed easily in the population. The technology should provide utility for the final

customer. Customer should be made aware very well about the level of comfort and ease this

new technology can bring to the doorstep.

All these factors when properly taken care of, will increase the chances of successful 3G

implementation in these markets.

These points can suggest the measures which can be taken so that it can be ensured that the

upcoming technology has a secured ground and that it can be used to improve the wireless

services in emerging markets.

As to the suggestion for future studies, future studies may happen in the area of the

comparison of W-CDMA and CDMA2000 1X , and laying out a business model for the

telecommunication companies to operate 3G in emerging markets.

Glossary

1. ARPU- Average revenue per user. It is a measure used primarily by consumer

communications and networking companies, it is the total revenue divided by the number of

subscribers.

2. Broadband - A high speed Internet connection with at least 256Kbps speed is termed

as a Broadband connection.

3. CDMA - Code Division Multiple Access. It is a channel access method utilized by various

radio communication technologies. It should not be confused with the mobile phone standards

called CDMA-ONE and CDMA2000 (which are often referred to as simply "CDMA"), which

use CDMA as an underlying channel access method.

4. CDMA2000 1XEV-DO - CDMA2000 1X Evolution-Data Optimized. It is a

telecommunications standard for the wireless transmission of data through radio signals,

typically for broadband Internet access.

5. DECT - Digital Enhanced Cordless Telecommunications. It is an ETSI standard for

digital portable phones (cordless home telephones), commonly used for domestic or corporate

purposes.

6. FDMA - Frequency Division Multiple Access. It is a channel access method used in

multiple-access protocols as a channelization protocol. FDMA gives users an individual

allocation of one or several frequency bands, or channels.

7. HSDPA - High Speed Downlink Packet Access. It is an enhanced 3G (third generation)

mobile telephony communications protocol in the High-Speed Packet Access (HSPA) family,

also coined 3.5G, 3G+ or turbo 3G, which allows networks based on Universal Mobile

Telecommunications System (UMTS) to have higher data transfer speeds and capacity.

8. IMT 2000 - International Mobile Telecommunications-2000 (IMT-2000), better

known as 3G or 3rd Generation, is a family of standards for mobile

telecommunication defined by the International Telecommunication Union, which

includes GSM EDGE, UMTS, and CDMA2000 as well as DECT and Wi-MAX.

9. QOS - Quality of Service

10. TDMA - Time Division Multiple Access. It is a channel access method for shared medium

networks. It allows several users to share the same frequency channel by dividing the signal

into different time slots.

11. TD-SCDMA - Time Division Synchronous Code Division Multiple Access. It is an air

interface found in UMTS mobile telecommunications networks in China as an alternative to

W-CDMA.

12. UMTS- Universal Mobile Telecommunications System. The name UMTS, introduced by

ETSI, is usually used in Europe. Outside of Europe, the system is also known by other names

such as FOMA (Freedom of Multiple Access) or W-CDMA. In marketing, it is often just

referred to as 3G.

13. UWC 136 - Universal Wireless Communications 136. It is a third-generation wireless

standard proposal based on TDMA technology that was developed by the Universal Wireless

Communications Consortium and is one of the 3G candidates submitted to the International

Telecommunication Union by the United States.

14. VOIP - Voice over Internet Protocol. It is a general term for a family of transmission

technologies for delivery of voice communications over IP networks such as the Internet or

other packet-switched networks.

15. W-CDMA - Wideband Code Division Multiple Access. It is an air interface found in

3G mobile telecommunications networks. It is the most widespread standard for 3G

mobile telecommunication technology.

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