New report answers 3G dilemma
November 20, 2002
Operators that paid too much for 3G licenses, technology that won't
be ready for at least three years, and skeptical investors add up
to a losing proposition. But winning solutions are available. That
is one of the main conclusions of the new 60-page report UMTS at
the Crossroads: Strategies for Success, released today by Datacomm
Research Company.
"Europe's UMTS operators are scaling back construction plans and
delaying commercial launches left and right," said Chetan Sharma,
co-author of the report along with Sunil Jain. "It's time to give
operators the tools they need to compete in the changing global
market," he concluded.
"This report presents realistic solutions for building the 3G wireless
business -- from a cohesive strategy using GPRS, EDGE, and public
wireless LANs to GSM1x to allowing dual use of UMTS spectrum," said
Ira Brodsky, President of Datacomm Research. "Unless a new approach
is taken, the strategies of GSM operators in Europe and Asia will
start to diverge," he concluded.
Additional conclusions found in UMTS at the Crossroads: Strategies
for Success:
1. Europe's UMTS operators face serious challenges. Many can't
afford to build nationwide networks in the 2.1 GHz band. Dual-mode
handsets (W-CDMA/GSM) will take time to perfect. W-CDMA is more
likely to succeed in Japan, where NTT DoCoMo is building a nationwide
network that doesn't require dual-mode handsets.
2. Europe's regulators must give operators more time and flexibility.
All reasonable options should be considered including infrastructure
sharing, spectrum swapping, disaggregation of spectrum for resale
or leasing, and alternative technologies.
3. Prospects for GSM1x, the CDMA2000 overlay for GSM, are particularly
good in Asia where some operators own both GSM and CDMA2000 networks.
GSM1x enables GSM operators to upgrade to 3G in existing spectrum,
and allows combining dual networks to reduce operating costs and
provide users a best-of-both-worlds solution.
4. Customer uptake of wireless data services will fall short of
near-term return on investment goals. 3G operators must offer competitively
priced voice services. Thus, 2G operators upgrading to 3G are better
positioned than are "green field" UMTS operators. The report explains
how UMTS operators can transform this weakness into strength.
5. CDMA2000 will capture the majority of 3G subscribers for at
least the next three years. Some 2G operators, particularly in Asia,
will be forced to reevaluate their 3G strategies. CDMA450, a CDMA2000
solution for the 450 MHz band, is particularly attractive to operators
in Russia, Eastern Europe, and Africa.
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3G Motorola A920
