Finally, 3G is closer to becoming a reality

Finally, 3G is closer to becoming a reality

Zatni Arbi, Contributor/zatni@cbn.net.id

"As we see it, between 2001 and the end of last year, the cellular phone network industry experienced a recession," said Mats H. Olsson. Speaking to a group of Indonesian journalists during the recent CommunicAsia 2004 in Singapore, he recalled his many years as Ericsson's country manager for Indonesia. He left Indonesia early this year to head Ericsson China, so he still has a very good grasp of the Indonesian market.

"For more than a decade, up to 2000, we were accustomed to a CAGR (Compound Annual Growth Rate) of 30 percent and more globally, but, during the recession, the industry was declining by 15 percent," he explained. Media reports say that Ericsson was in the red in the last two years. Today, the good news is that the industry has picked up the pace once again -- in Indonesia, and elsewhere in the world. Mats said his company had learned a basic lesson from the experience as well: Know what your customers need and want.

In Mats' opinion, one important factor has been responsible for the upswing in Indonesia's telecom business, with privatization starting to show the desired results.

Indonesia's telcos are now managed much more professionally and transparently. This allows for more rapid and stronger growth. On an international level, the global economy is also showing stronger indicators, with Asia Pacific -- as expected -- leading the way.

Also, Ericsson has been a leading player in the 3G infrastructure market. The Swedish company claims that it has a 30 percent share in the Asia-Pacific infrastructure market. Currently, it is working with SingTel and Maxis (Malaysia) to build their 3G WCDMA networks, and with state-owned telecommunications company PT Telkom for its CDMA2000 network.

If you were in Singapore during CommunicAsia last week, you could probably feel the 3G pulse starting to quicken, although several big names in the industry were notably missing at what was supposed to be the biggest annual telecom event in Asia.

Will WCDMA Work?

While the race between CDMA2000, from the Qualcomm side, and WCDMA, from the GSM side, continues, analysts have one question: Will the WCDMA work beyond the basic voice service?

As the WCDMA comes from the GSM alliance, which means that a number of vendors have to work together to define the standards, a lot of people may wonder whether interoperability will cause a problem.

Ericsson provided an answer during the event. One of the highlights at the company's exhibition was its demonstration of the interoperability between WCDMA 3G handsets.

In a container set up just outside Hall 4 of the Singapore Expo, it put together a working WCDMA network complete with a couple of antennae. Eleven 3G handset models from eight handset makers -- including Nokia, NEC, Sony-Ericsson and Motorola -- were used to show that live video calls could be made, regardless of which handset the user was equipped with.

The frame rate was only around 15 frames per second, so the images were not as smooth as one would like -- not yet -- but it certainly worked.

However, as providing footage of your ear canal could hardly be called good manners, it would be best to allow for face-to- face communication by placing the camera in an agreeable position. I guess when the service becomes widely available, the use of a headset or earphones would be mandatory. Otherwise, can you imagine a room full of people all trying to listen to calls via speaker phones, with the volume set at its maximum?

Push to Talk

For the last two years, PTT has had a different meaning in telecommunications. It also stands for Push to Talk, and is taking the industry today by storm. It works like a Citizen Band or ham radio. You listen to other people -- like a conference call -- and if you want to talk, you just push a button. If you are unlucky, someone may push their button before you -- and in that case you will have to wait.

In the U.S., Push to Talk has been offered by Nextel for many years. Nextel, however, uses a proprietary standard, and therefore only those with Nextel devices can use the service. The GSM people then got together and worked out a standard so that the service could be used by people with different handsets from different vendors.

They called it the open standard Packet over Cellular (POC), and at the moment it is being brought to the Open Mobile Architecture (OMA) alliance to be made the official standard. As always, an open standard will ensure market acceptance, which is very important for the success of a new service in the telco industry.

Push to Talk has also been available on the CDMA front. Last year, I saw it demonstrated during the CDMA World Congress in Bangkok.

Push to Talk is not a store-and-forward service -- whereby voice messages are saved on a server and then forwarded to a number of recipients. Push to Talk is a real-time communication, and that is why Ericsson also calls it "Instant Talk".

A number of different groups can be defined, and members selected for each of those groups. When you want to talk to a group, you just select it and push the button. The voice will then be digitized, compressed and transmitted in packets of data. So, Push to Talk actually requires a network that supports packet transmission, such as GPRS, EDGE, and of course WCDMA.

The benefits of Push to Talk are plentiful. This service should be much cheaper than conventional, voice-based conference calls. To call a group of people, only one or two buttons must be pressed. It is believed that users of this service will comprise mainly of teenagers, families with a lot of children, as well as companies that often need to talk to a lot of employees at the same time for quick decision-making.

Outsourcing the Services

Ericsson's rebound this year is also attributable to the success of its Managed Services business, which has gained more customers in various countries, including Australia. Even multi- vendor telcos can outsource tasks from network design to maintenance to Ericsson.

This will bring cost-efficiency and the opportunity for telcos to concentrate on their business. Ericsson says that its management and consultancy business contributes around 15 percent of its group turnover.

With such services becoming more and more outsourceable, in addition to application hosting services, it can be envisioned that the mobile telecom industry will evolve into something like the airline industry, which has now become crowded with super cheap airlines.

With the right deregulation, a broad range of non-voice, value-added services may eventually be offered by small companies without their own fully fledged infrastructure. All they need to have is the creativity to find the right services -- that people need and are willing to pay for.