Cellular business in the 3G era

Cellular business in the 3G era

B. Gunawan, Contributor, Jakarta

A young executive looking for an apartment is interested in a
mini ad. Unlike other mini ads we usually find in newspapers,
this one contains a small bar code. He takes his cell phone and
scans the bar code. The information in the bar code, after being
processed by an application in his phone, appears on the monitor.
It gives the young man detailed information about the apartment
advertised.

Detailed information? Well, yes, as the information not only
contains the size and the price of the apartment, as well as the
address and the name of the owner, but also photos -- taken from
several different angles -- about the apartment in question. If
need be, you can have a video conversation with the owner with
your cell phone and negotiate the price. If you wish to see him,
you can easily look at the map on your monitor to find your way
to the apartment.

All this sounds like a story in a film, but it is not. It is a
reality and a common one at that. At least, it is a reality in
Japan, where the telecommunications standard has reached the
third generation (3G). Without 3G technology, the story above is
simply fiction. With the application of the 3G standard in
cellular communications, cell phone users can easily hold a video
conference, find out the position of the other person in this
phone conversation or look at three-dimensional pictures.

The 3G standard, which the International Telecommunication
Union (ITU) released through its IMT 2000 package, has begun to
change the business landscape in cellular technology. While
previously, the cellular (technology) business was dominated by
GSM/GPRS, since 2000 CDMA (Code Division Multiple Access)
technology has begun to significantly penetrate the market.

Today, there are no fewer than 227 million subscribers to CDMA
of various versions, and 150 million subscribers to 3G CDMA
(CDMA2000 1x, CDMA2000 1xEV-DO, and WCDMA). CDMA2000 and WCDMA,
which GSM has developed, are two of the five most popular
interfaces that have fulfilled the G3 criteria consistently.

Of course, CDMA subscribers are still far smaller in number
than GSM subscribers. "This is because CDMA began to undertake
large-scale promotion only in 2000," said Harry K. Nugraha,
senior director and country manager of Qualcomm Indonesia.

Qualcomm is a pioneer of CDMA technology and launched this
technology commercially in Hong Kong in 1995. Today, nearly all
of 125 CDMA operators make use of Qualcomm technology.

CDMA began to draw attention when SK Telecom of South Korea
marked the initial launching of 3G CDMA (CDMA-2000 1x) in October
2000. A year later, NTT DoCoMo made use of WCDMA in Japan. Later,
South Korea improved the system with CDMA2000 1xEV-DO, a format
that is capable of speeds of 2.4 Mbps. Today, CDMA in these two
countries holds a very prominent position. In South Korea it has
even become a very dominant platform.

With its 3G platform, which consistently features connections
at a speed of 2 Mbps for a stationary position, a speed of 384
kbps for mobile positions and 144 kbps for a fast moving
position, CDMA-2000 obviously has a number of benefits, such as
larger data capacity and a higher communication speed. As a
result, CDMA2000 can do more faster than other cellular
technologies. Using CDMA technology, an operator can provide
virtual meeting services such as video conferencing, location-
based service (LBS), streaming and downloading of videos and
music, including TV programs, the application of peer-to-peer
messaging such as instant messaging, MMS or e-mail.

Of no less importance is that CDMA2000 technology enables more
users to use cellular channels at the same time. This has made
CDMA more competitive in terms of price. It may be said that all
over the world today CDMA 3G operators are enjoying an increase
in average revenue per user (ARPU). Of course this is a promising
business opportunity.

In view of the readiness of the CDMA operators in Indonesia,
it seems that the future of CDMA will be as bright as its
predecessor, GSM. We can see that most major operators -- Telkom
(Flexi), Indosat (StarOne), Bakrie Telecom (Esia) and Mobile-8
(Fren) -- have adopted 3G CDMA2000 1x. Even today they are
preparing more sophisticated technology by adopting the CDMA2000
1xEV-DO (data optimized) technology.

Understandably, the use of 1xEV-DP technology can bring peak
performance for a network, which can reach 2.4 Mbps or 2,400
kbps, while the speed of GSM/GPRS technology through EDGE is only
160 kbps. On the other hand, the choice of CDMA2000, which is
indeed the G3 standard, obviously shows what the operators in
Indonesia will do.

Among other things, there will be many operators that will
provide multimedia services for streaming and downloading:
subscribers, for example, can order a recording of a soccer match
between Chelsea and Manchester United that a television station
aired the night before. Subscribers will also been pampered with
various games that can be played simultaneously by several users.

Likewise, the Internet and the traffic of data packages will
obviously be facilitated. Retail business services such as mini
ads are expected to dominate the CDMA-based cellular services in
future. And in keeping with the ITU requirements, the G3
technology, including the CDMA2000 1x, must also be affordable to
every subscriber.

So far, the CDMA technology has been able to meet
increasingly more complex needs for telecommunication
technologies such as an improved voice quality, the speed of data
transfer, the Internet access and multi-media features.

The question is whether operators are ready to meet the needs
of their subscribers, particularly with respect to making
available adequate services and features. This is the right time
for CDMA operators to draw up their business strategy. - The
writer is Jakarta-based freelance journalist