Mon, 12 May 2003

GSM makes an attempt to EDGE forward

Zatni Arbi, Columnist,

If you think that terms like GSM, CDMA, 2G, 3G, WAP and GPRS are confusing enough, be really prepared for more confusion in the years ahead as operators introduce new technologies that promise more bandwidth, more support for richer applications and, alas, not necessarily cheaper services. But, at least, as consumers, we are in the position to choose what we want to use.

One of the promises of 3G services is the ability of the operators to provide different levels of service quality. Do you need a really fast connection so that you can have a video- conferencing session, or do you need just the right level of speed to participate in an online gaming competition? We pay different rates for different level of network services, of course.

The race for 3G market share is still as fierce as ever, if not increasingly so. Industry estimates have it that, currently, the GSM technology is used by 70 to 75 percent of cellphone operators worldwide. CDMA, which is the American contender of the European

As we all know, the GSM front has been moving more slowly as GSM vendors fight which each other for domination. In a way, they have the advantage over the faster moving Qualcomm. The GSM front is able to come up with technological enhancements that can be built on top of their existing infrastructure. This allows GSM operators, for example, introduce the General Packet Radio Service (GPRS), which is now gradually making inroads into Indonesia.

The next transitional technology, which will pave the way to the 3G services-which Alcatel calls Universal Mobile Telephone Services (UMTS)-is EDGE. We have already touched on this upcoming offering from our GSM operators such as Satelindo and Telkomsel for a couple of times in this column.

EDGE stands for Enhanced Data Rate for GSM Evolution. Linguistically, the abbreviation and what it stands for do not match, of course, but it is clear that the new technology, which promises a data rate of 384 Kbps, is an evolution rather than a revolutionary breakthrough.

As I wrote some time ago in this column, operators who bought their base terminal stations in the past two or three years are actually ready to offer the services. But they will still have to invest in the necessary software, though. On the consumers side, the drawback will be that we have to buy a new handset to take advantage of the new services, as EDGE uses a different coding scheme.

Come to think of that, the cellphones already meet our basic need of voice communication that allows us to call or be called by other people regardless our location. The SMS meet the need for a less intrusive and much cheaper means of communication.

Beyond these two needs, very little need exists to drive the adoption of new technology. Most users still see features such as MMS video conferencing as features that are nice to have but they can easily live without. Operators wishing to move to a higher level of sophistication are hard pressed to invent killer applications that will make a new technology a real necessity. It is not an easy exercise. And past experience has taught us not to invest in cool technology that is still looking for a question that it can answer (think Teletext and Videotext). They have ended up being free rather than revenue generating services.

Content has always been a considered the source of killer applications. The introduction of a service that will allow us to monitor traffic condition on the toll road with the help of MMS- capable cellphones will definitely offer a compelling value proposition for motorists. They will be willing to pay more for the services, and the operators and the service providers be able to split the revenues.

Location based services, services that provides subscribers with the information specific to the locations where they are at a given time will be another potential driver. Again, the service is not cheap to provide, and the content provider must think hard to invent the services that subscribers really want to spend their money on.

Incidentally, if you remember the Chateau digital surveillance system that I wrote about last week, rumors have it that you will be able to check traffic condition in real time where some providers are installing their cameras.

Vendors, including Alcatel-which brought the first GSM service to Indonesia in 1996-are really eager to push their 3G technologies to the market. The French company, for example, has opened a number of 3G Reality Centers in various places in the world, including in Kuala Lumpur, Malaysia. In these centers, operators, service providers and applications developers can have real experience of the future 3G services and explore various opportunities for partnership in bringing killer applications to the market.

The big question remains, how can we take part in all of this exciting development?