Next-generation mobile networks take bumpy road to success

date: July 3, 2002

While the world of mobile communications is set to make a qualitative leap with the introduction of high-speed data services, the widespread acceptance of Third-Generation (3G) applications is progressing slowly.

New analysis from Frost & Sullivan, Global Next- Generation Mobile Networks Markets, reveals that this industry is poised to leap from a revenue value of over $45 billion 2001 to approximately $75 billion by 2007.

While regional markets are set for steady growth over the forecast period, network operators are struggling against a myriad of challenges. One of the most problematic issues is the existence of multiple network technologies across the international marketplace.

"Industry participants are expected to face an uphill task in their efforts to reduce the presence of multiple technologies. The synchronous existence of analogue, TDMA, CDMA, and GSM technologies has only complicated matters for proponents of a common global standard," states Frost & Sullivan Industry Analyst Kshitij Moghe.

Unlike Europe, the Middle East, and Africa, competing network technologies exist in the North American, Latin American, and Asia Pacific markets. The process of converting analogue to digital systems in the Americas makes the conversion to 3G even more challenging.

"The transition of TDMA to GSM has helped reduce competition. In addition, the development of a third 3G standard in the form of TD-SCDMA within the Chinese market, if successful, is likely to further fragment the industry," says Moghe.

However, there is a growing climate of uncertainty over the viability of 3G services. This has primarily stemmed from the inability of operators and vendors to deliver on their promises for this technology. High infrastructure costs, delayed network deployments, and reservations about the success of data applications have induced a degree of scepticism.

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