3G Mobile: A Status Report
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Transcript of 3G Mobile: A Status Report
ITU News 6/200312
Since mobile cellular became commercially
available in the early 1980s, it has ad-
vanced beyond imagination in terms of cover-
age, services, technology, handsets and regu-
lation. Perhaps the most revolutionary change
is that in the space of around 20 years, mobile
subscribers surpassed fixed-telephone line sub-
scribers in 2002, making mobile technology the
predominant means of voice communications
(see Figure 1, left chart).
First generation mobile cellular networks em-
ployed analogue technology. Developments in
digital technology led to second-generation (2G)
systems. By the end of the 1980s, 2G networks
had been developed to provide better quality
services, greater capacity and additional func-
tionality than analogue systems. At the end of
2002, the world had almost completed the tran-
sition to digital cellular networks, with analogue
users accounting for a mere three per cent of
total mobile subscribers. There are four 2G dig-
ital cellular radio technologies in use around the
world (see Figure 1, right chart): 1
�Global System for Mobile Communica-tions (GSM). This is the predominant technol-
ogy worldwide and the predominant system
in Europe. It is also used in many nations in
Africa, Asia, the Middle East and some coun-
tries in the Americas. At December 2002, there
were 788 million GSM subscribers on 467 net-
works in 169 countries.
� Time Division Multiple Access (TDMA).This is the leading technology in the Americas
with 109 million subscribers at December 2002.
�Code Division Multiple Access (CDMA).At December 2002, there were 147 million
CDMA subscribers with 61 per cent in the
Americas, 37 per cent in the Asia-Pacific re-
gion and less than two per cent in Europe, the
Middle East and Africa.
� Personal Digital Cellular (PDC). This sys-
tem is deployed only in Japan with 60 million
subscribers at December 2002.
A significant development with 2G systems
has been the increasing utilization of data-like
1 The Personal Handyphone System (PHS) is a dig-
ital system launched in Japan in 1995. As a low-cost
alternative to cellular, it has limited coverage area.
There were 5.6 million PHS subscribers, all in Japan,
at December 2002.
THE EVOLUTION TO 3G MOBILE STATUS REPORT
Third-Generation (3G) Mobile
A status report
Evolutionof wireless technologies
ITU 030082/Siemens AG
A collection tracking the history of mobile com-
munications
ITU News 6/2003 13
THE EVOLUTION TO 3G MOBILE STATUS REPORT
2 See “GSM Statistics” on the GSM Association
website at www.gsmworld.com/news/statistics/
index.shtml
3 See the “Internet Provider Services (Mobile Tele-
phone)” section of the “Number of Subscribers” report
issued monthly by the Telecommunication Carriers
Association (TCA) of Japan. In December 2002, TCA
reported that there were 59.5 million subscribers to
the mobile Internet services known as i-mode (pro-
vided by the NTT DoCoMo Group), Ezweb (provided
by the au Group and the Tu-Ka Group) and J-sky (pro-
vided by J-Phone). This is out of a total of 73.5 mobile
telephone subscribers (see www.tca.or.jp/eng/data-
base/daisu/yymm/0212matu.html).
services, for example, the short message service
(SMS), which allows text messages to be sent
between mobile handsets. Some 360 billion SMS
were sent over GSM networks in 2002.2 Mobile
handsets are also increasingly being used to ac-
cess the Internet. This has become successful
in countries such as Japan, where 80 per cent
of cellular users subscribe to a mobile Internet
service provider.3 The growing use of mobile
data has led to demand for faster speed than
the initial transmission rate of 9.6 kbit/s for GSM.
This is being accomplished by upgrading exist-
ing GSM networks with the deployment of
General Packet Radio Service (GPRS) technology.
In the case of cdmaOne networks, they are
being enhanced with CDMA2000 1X technology. ITU 030084/Philips
ITU 030083/Siemens AG
A dual-band
mobile phone
of 1999.
Its simple menu
and large
display
appealed to
first-timers,
especially
youth. With the
young target
group came
music too
New generation
liquid-crystal
display (LCD)
mobile phone
ITU News 6/200314
4 See ITU Press releases: “ITU gives final approval toIMT-2000 radio interface specifications” (8 May 2000)at www.itu.int/newsarchive/press_releases/2000/10.html and: “Thumbs up for IMT-2000” (30 May2000) at www.itu.int/newsarchive/press_releases/2000/12.html
THE EVOLUTION TO 3G MOBILE STATUS REPORT
These technologies offer speeds that
are equivalent to, or even faster than,
conventional dial-up.
The development of 3G systemsThe need for faster speed, global com-
patibility and multimedia services has
led to the development of 3G systems.
In an effort to consolidate existing in-
compatible mobile environments into a
seamless global network, ITU adopted
a family of radio access methods at its
Radiocommunication Assembly in
Istanbul in early May 2000. Known as
International Mobile Telecommunica-
tions-2000 (IMT-2000), this global
standard was realized after years of col-
laborative work between ITU and the
global cellular community. At the end of May
2000, the World Radiocommunication Conference
(also held in Istanbul) identified additional fre-
quency bands for 3G (IMT-2000) use.4 IMT-2000
consists of five different radio access methods:
W-CDMA (Wideband Code Division Multiple
Access), CDMA20001X, TD-SCDMA, EDGE
(Enhanced Data Rates for GSM Evolution) and
DECT (Digitally Enhanced Cordless Telecom-
munications).
The evolutionary path from 2G to 3G has been
mapped out for existing networks (see Figure 2).
Migration differs depending on the existing 2G
network. In general, W-CDMA would require a
brand new network to be installed whereas
CDMA2000 1X requires less investment as an
upgrade from existing second-generation
CDMA networks. Among the five radio access
technologies approved as IMT-2000, W-CDMA
and CDMA2000 1X have gained the most sup-
port from regulators, mobile network operators
and equipment manufacturers.
ITU 030088/Samsung
An innovative mobile phone with a built-in rotating camera
and colour screen, to be released in the GSM market in 2003
ITU News 6/2003 15
YOUTH FORUMTHE EVOLUTION TO 3G MOBILE STATUS REPORT
At the end of 2002, there were 119 licences that
had been awarded to operators around the
world for the use of IMT-2000 spectrum to offer
3G mobile services. An important consideration
in the 3G licensing process is exactly what is
being offered. In most countries, the licensing
includes the needed spectrum, typically in the
2 GHz range. In some cases, particularly most
of Europe, the 3G radio interface was also speci-
fied. In other cases, there was no explicit re-
quirement for a specific radio interface as long
as it was one identified in the IMT-2000 stand-
ard. While auctions and beauty contests have
been the preferred licence allocation methods,
some countries have automatically granted 3G
licences to incumbents. For example in Europe,
3G licences were offered free of charge to the
incumbent mobile operators in the Isle of Man,
Liechtenstein and Monaco.
The optimum method of allocating licences
is subject to debate. Proponents of auctions will
argue that frequency is a scarce resource and
its pricing should be left to the market. Back-
ers of beauty contests will argue that their
method avoids high auction prices that will
eventually be passed on to consumers. There
are also political aspects since, in some in-
stances, the licence fees revert to the govern-
ment budget.
AuctionIn this method of licence allocation, a fre-
quency range identified for the use of 3G net-
works is auctioned. A number of licences are
made available depending on spectrum and
market conditions. Successful applicants are
those that outbid others.
There has been great variation in the relative
price paid for 3G licences that have been auc-
tioned. The average price per capita in Germany
and the United Kingdom amounted to EUR 615
and 644 respectively. In contrast, Austria and
Denmark collected an average licence price per
capita of EUR 103 and 95. One reason is timing.
Germany and the United Kingdom were among
the first to auction 3G licences. Euphoria was
high, as were the prices. It is possible that li-
cences will be sold at or near their reserve price
(i.e., minimum bid price) when the number of
bidders is the same or less than the number of
licences available. Such was the outcome when
Switzerland conducted its auction in
December 2000. Auctions can also be cancelled
under such circumstances, as was the case in
Singapore and Slovenia where the bidders sim-
ply paid the reserve price. In total, 77 licences
for 3G have been granted in 19 economies via
auctions, accounting for USD 101 billion (see
Table 1).
Beauty contestIn a beauty contest, a fixed number of li-
cences are awarded to applicants that best meet
certain criteria. The regulator issues an invita-
tion to all interested parties with guidelines and
requirements. Successful applicants are chosen
based on specific pre-determined criteria pre-
sented in the application. The selection criteria
differ from country to country, depending on the
respective plans and objectives in establishing
a 3G network. In general, applicants are evalu-
ated based on their financial capacity, business
plan and technical expertise. Criteria that are
often used are commitments to rapid roll-out
and with high levels of land and population cov-
erage. Other aspects such as market concen-
tration and technological specifications are also
taken into consideration.
Like a real beauty pageant, applicants are
awarded points for satisfying the specific crite-
ria stipulated. Applicants with the highest scores
are awarded licences. Normally, licensees also
pay a fixed licence fee, but some countries, like
Japan and Finland, waived this fee. In this
method, licence costs are significantly lower than
the auctioned licences, yet France and Poland
were noteworthy for having high fees.
Some 41 3G licences have been issued in
13 countries via beauty contests accounting for
USD 6.9 billion (see Table 2).
Regional analysisUniversal Mobile Telecommunications Sys-
tem (UMTS) is the term Europe uses to refer to
3G networks. It maps out the migration path for
GSM networks to 3G. UMTS uses the IMT-2000
3G Licensing
ITU News 6/200316
THE EVOLUTION TO 3G MOBILE STATUS REPORT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Economy Auction dateNumber
ofwinners
Remarks
Table 1 — Outcome of 3G mobile licence auctions
April 2000
July 2000
August 2000
October 2000
November 2000
December 2000
January 2001
February 2001
March 2001
March 2001
April 2001
July 2001
September 2001
October 2001
November 2001
December 2001
December 2001
February 2002
October 2002
The four incumbents were awarded licences plusa new entrant
All five incumbents won the licences
Four incumbents won licences
Three of four incumbents won licences
All six bidders won licences, including the fourincumbents
Four bids for four licences
Four licences were awarded at auction and a fifthwas set aside for the Maori people
Five bidders won 52 regional licences
Three bids received for four licences on offer
Two national and various regional licences wereawarded to six bidders
Auction cancelled since there was the samenumber of bids as licences to be awarded.Each licence was awarded for the reserve price
Four licences had been on offer. The threeincumbents were awarded licences
Bidders had to pre-qualify. Only four bidders forfour licences. Amount equals bid plus minimumroyalty payments for 15 years
Sealed bid where licence price correspondedto the fourth highest bid in the auction
Licence awarded to only bidder (three licenceshad been offered)
Two incumbents won with the third not participating
Won by the three incumbents
Only three of six incumbents won licences
Two incumbents bid for three licences
Amount(USD
million)
35 411
2515
46 323
10 084
716
121
60
931
418
578
166
414
671
496
90
203
157
1397
19
100 771
United Kingdom
Netherlands
Germany
Italy
Austria
Switzerland
New Zealand
Canada
Belgium
Australia
Singapore
Greece
Hong Kong, China
Denmark
Slovenia
Czech Republic
Israel
Taiwan, China
Latvia
Total
5
5
6
5
6
4
5
5
3
6
3
3
4
4
1
2
3
5
2
77
Note: Amount converted to USD at exchange rate on day on which auction finished.
Source: ITU.
W-CDMA radio interface in the frequency bands
1900–1980 MHz, 2010–2025 MHz and 2110–
2170 MHz. In December 1998, the European Par-
liament mandated that all European Union (EU)
member countries adopt UMTS. The decision
imposed a specific timetable for UMTS, includ-
ing a deadline for licensing by 1 January 2000
and introduction of commercial services by
1 January 2002. All EU members had com-
pleted the 3G licensing process by May 2002.
Non-EU countries in Western Europe such as
Norway and Switzerland have also completed
Status at 31 December 2002
ITU News 6/2003 17
THE EVOLUTION TO 3G MOBILE STATUS REPORT
Source: ITU.
1
2
3
4
5
6
7
8
9
10
11
12
13
Country Date licenceawarded
Numberof
licences
Remarks
March 1999
March 2000
June 2000
December 2000
December 2000
December 2000
December 2000August 2001
December 2000
July 2001May 2002
May 2002
June 2002
June 2002
July 2002
Administrative fee of EUR 1000 per 25 kHz
Amount does not include yearly radio spectrumfees
Two W-CDMA and one CDMA2000 1X
In addition, each licensee is expected to pay USD2.2 million per year as frequency usage charge
Not including annual spectrum fee
Awarded to three incumbents
KTF and SK Telecom awarded W-CDMA licencesfollowed by LG Telecom (CDMA2000 1X)
Spectrum use fee and 0.15 per cent of turnover
Bouygues Telecom was awarded a 3G licence, ata lower price, after the two incumbents, FranceTelecom and SFR
Annual spectrum usage fee of 0.2 per cent ofturnover or a minimum of EUR 200 000
Two incumbents awarded licence plus new entrant
Three licences had been awarded but one waslater withdrawn
Additional maintenance fees based on the numberof transmitters set up in each licensee’s 3G network
Amount(USD
million)
-
444
-
45
360
1839
2886
-
1042
-
173
67
26
6882
Finland
Spain
Japan
Norway
Portugal
Poland
Korea (Republic of)
Sweden
France
Luxembourg
Ireland
Slovakia
Malaysia
Total
4
4
3
3
4
3
3
4
3
3
3
2
2
41
Status at 31 December 2002
the 3G licensing process. In Central and Eastern
Europe, the Czech Republic, Latvia, Poland, the
Slovak Republic and Slovenia have licensed 3G
operators. By 31 December 2002, some 26 coun-
tries and territories in Europe had completed 3G
licensing processes.
In the Asia region, economies such as
Hong Kong, China; Israel, Japan, the Republic
of Korea, Malaysia, Singapore and Taiwan, China
had issued 23 licences for 3G by December 2002.
In the Oceania region, Australia and
New Zealand have allocated spectrum and
awarded licences for 3G.
Canada is the only country from the Americas
region that has auctioned 3G spectrum in the
2 GHz range. Several countries in the Americas
have already allocated licences for so-called
ITU 030080/Siemens AG
A mobile handset using EDGE technology as
an initial phase to launching further broadband
applications in Malaysia
Table 2 — Outcome of 3G mobile licence beauty contests
ITU News 6/200318
THE EVOLUTION TO 3G MOBILE STATUS REPORT
Personal Communications Services (PCS) that
take up parts of the spectrum bands identified
for 3G services. There are several factors hold-
ing back the allocation of additional spectrum
for 3G in the region. One is that local operators
have already invested heavily in building their
2G networks (in the 1900 MHz band). Additional
spectrum would require more investments
5 See Ericsson’s Press release of 2 April 2003:
“Ericsson and Nigeria’s RelTel Sign CDMA2000 1X”
(www.ericsson.com/press/20030402-083853.html).
which operators are presently unable or unwill-
ing to make. Another factor is the plurality of
different systems in the region (i.e., TDMA,
GSM and CDMA), which complicates the mi-
gration path from 2G to 3G.
In some countries, spectrum in the IMT-2000
bands cannot be made available as it is used
for national security purposes. Finally, existing
spectrum bands (1850–1990 MHz) can be used
to provide 3G-type services and operators in
the region with CDMA networks are choosing
to evolve to CDMA2000 1X (recognized as an
IMT-2000 standard) without the need for addi-
tional spectrum.
No African country has issued licences for
IMT-2000. In most African countries, there are
already many more mobile than fixed telephone
subscribers, so 3G could be a key technology
for enhancing Internet penetration in the re-
gion. While no formal IMT-2000 licensing has
taken place, it could be that operators in some
African countries may introduce 3G-like serv-
ices within existing frequency allocations.
These include fixed wireless operators using
CDMA that hope to introduce a mobility mode.
For example, a Nigerian telecommunication
operator has announced plans to launch a
CDMA2000 1X network. 5
RegionNumber
of countrylaunches
Africa
Americas
Asia
Europe
Oceania
Total
Numberof
countries
Numberof
licences
-
1
7
26
2
36
-
3
23
83
10
119
-
931
4310
100 588
673
106 502
Licencefees (USDmillion)
Number ofoperatorlaunches
Numberof countrylaunches
Number ofoperatorlaunches
Numberof
countries
Numberof
launches
3G licences1 CDMA2000 1X2
-
-
1
3
-
4
-
-
3
4
-
7
-
9
3
3
2
17
-
20
5
3
2
30
-
9
4
6
2
21
-
20
8
7
2
37
Table 3 — Regional distribution of 3G licences and deployments
1 Where there was a formal 3G licence process.2 Launched as an extension of existing networks.
Source: ITU.
Status at 31 December 2002
ITU 030090/Siemens AG
Total
A 1992
mobile phone
— a model that
was especially
popular with
architects,
construction site
managers and
surveyors
ITU News 6/2003 19
THE EVOLUTION TO 3G MOBILE STATUS REPORT
Roll-out of 3G networks is in theory
guided by timetables stated in the licence
conditions such as required minimum
coverage by a specified date. However,
market demand and handset availability
have impacted deployment schedules and
many networks have been delayed.
In Asia, SK Telecom of the Republic of Korea
launched its CDMA 2000 1X network in October
2000. 6 Japan’s NTT DoCoMo pioneered the
deployment of W-CDMA, launching its 3G serv-
ice commercially in October 2001.
In Europe, commercial 3G services
based on W-CDMA were not available
by 1 January 2002, as had been called
for in the EU guidelines. Nascent 3G
networks established in Austria,
Finland, the Isle of Man and Monaco
initially provided trial services.
Manx Telecom, on the Isle of Man
launched Europe’s first 3G network in
December 2001, and services became
commercially available in July 2002.
Although Finland was the first country
in the world to license 3G, and incum-
bent operator Sonera met licensing con-
ditions by having its network available
on 1 January 2002, commercial service
was not available until September due
to lack of handsets. Austria’s Mobilkom
launched its 3G network on 25 Septem-
ber 2002. In March 2003, Hutchison commercially
launched 3G services in the United Kingdom
and Italy, as well as in Australia in April and in
Sweden in May.
Overall, uptake of 3G services based on
W-CDMA has been slower than initially an-
nounced. Handset availability and network
interoperability have been cited as reasons for
the sluggish 3G market. Low market interest has
further exacerbated this scenario. The only other
W-CDMA launches have been in Japan, where
in addition to NTT DoCoMo, J-Phone launched
a W-CDMA network in December 2002. These
two operators had a combined 153 200 3G
subscribers at year-end 2002.
The use of CDMA2000 1X in
existing mobile frequencies as an
IMT-2000 standard has led to
more rapid launches. Except for
Japan, all CDMA2000 1X net-
works have been launched with-
out the need for a new licence as
they operate in existing licensed
radio frequencies. By the end of
December 2002, there had been
30 commercial CDMA2000 1X
launches in 17 countries.7 The number of
CDMA2000 1X subscribers at December 2002
was 32.6 million with the vast majority in the
Republic of Korea and Japan.
3G network deployment
6 See “SK Telecom Launches Commercial cdma
2000 1x Service”, Press release of 30 September 2000
(www.sktelecom.co.kr/english/news pr/news/2002/
06/01/219,1012,0,0,0.html). SK Telecom was awarded
a 3G licence but for a network using W-CDMA tech-
nology. Republic of Korea mobile operators consider
CDMA2000 1X to be a 2.5G network. For example,
LG Telecom, a Republic of Korea mobile operator
states on its website that “CDMA2000 1X is a 2.5
generation Mobile Communication Service” (see
www.lg019.co.kr/docs/eng/imt/imt cdma 01.jsp).
7 See the “Operators” section of the 3G Today website
for updated listings of commercial CDMA2000 1X
launches (www.3gtoday.com/operators flash.html).
ITU 030089/Nokia
Mobile phone production: The final testing of a handset
The rotating
camera phone
ITU 030091/Samsung
ITU News 6/200320
THE EVOLUTION TO 3G MOBILE STATUS REPORT
ConclusionThere have been considerable delays in the
introduction of 3G and market penetration of
licensed systems was less than 0.4 per cent of
total worldwide mobile subscribers, some four
years after the licence process began. Few EU
countries met the directive of launching com-
mercial 3G services by 1 January 2002. In retro-
spect, 3G licensing can be questioned on two
grounds. One was the EU process that com-
pelled members to abide by a specific timeta-
ble. It is debatable whether this was practical
for a brand new service where infrastructure
availability and reliability was unknown and
market demand was at best, sketchy. This is
particularly relevant in the GSM world, where
at the time of licensing, few operators had ex-
perience with high-speed data networks. The
second issue relates to the fact that CDMA net-
works can be upgraded to CDMA2000 1X with-
out operators having to apply for a 3G licence.
This has given CDMA network
operators an advantage
over GSM operators. On
the other hand, there is
confusion about whether
CDMA2000 1X is truly 3G,
especially since operators
Contributed by Michael Minges and Pratikshya
Simkhada of the “Market, Economics and Finance
Unit” of the ITU Telecommunication Development
Bureau (BDT). This Unit was formerly called “Tele-
communication Data and Statistics Unit.”
that have launched those networks refer to them
as 2.5G. A CDMA2000 1X network offers data
speeds of 144 kbit/s versus 384 kbit/s for
W-CDMA.
The majority of countries in the world have
yet to license or deploy 3G networks. The con-
trast is even starker between developed and
developing nations. Countries that have not yet
licensed IMT-2000 networks have several
options, based on the benefit of hindsight. One
is that there may be no hurry to license 3G.
The first W-CDMA 3G networks have only re-
cently been deployed at great
cost — and all in developed
nations. At this point in time,
it may prove difficult for many
developing countries to find
investors willing to invest in
a brand new 3G network. In-
stead, countries might con-
sider upgrades to existing
networks, evolving them to
2.5G as a first step to 3G. For
GSM networks, this means
the deployment of GPRS
while for cdmaOne networks
it involves the installation of
CDMA2000 1X. This would
provide faster speeds and
greater functionality for the
development of mobile data
services. If these upgrades do
not require changes to exist-
ing frequency allocations,
then it may be wise to encourage such en-
hancements without requiring a new licence.
If additional spectrum is required within the
same frequency, regulators should be encour-
aged to act favourably upon this request in the
light of the benefits such spectrum could bring.
If new 2G mobile licences are to be issued, then
the authorities may wish to encourage opera-
tors to install their networks as 2.5G-ready. �
ITU 026120/A. de Ferron
ITU 010541/Ericsson
Demonstrating location-based services at ITU TELECOM AsIA 2002
(Hong Kong, China). A number of these services are expected to
use IMT-2000 systems