3G Evolution & Revolution

When the full promise of Third Generation (3G) wireless is realized, wireless users will have global access to a variety of voice, data and video services. Users will be able to access all their communications services easily from anywhere using any terminal. The distinctions between wireline, wireless and data services will blur until they're irrelevant. Users will simply choose the most convenient means to communicate, while network operators will choose the most efficient way to transport communications.

Though 3G wireless will change the way people think about communications, the path for carriers to reach 3G is more evolutionary than the previous two generations of wireless have been. First-generation wireless, analog cellular, was an entirely new form of communications that required a system-wide deployment of infrastructure for a market that didn't yet exist. Second-generation wireless, digital cellular or PCS, was in some ways a more gradual transition. Established companies had the luxury of deploying digital service as an overlay to the analog network. New carriers had to deploy entirely new digital networks, but they had the benefit of a market that was already aware of wireless telephony and an existing demand for the advanced services that digital technology offered. Still, the transition had to happen fairly quickly for established carriers to compete with all-new digital carriers.

Now, just a few years after the transition to digital wireless, another generation of wireless communications is approaching, but it doesn't mean existing systems will become obsolete. Instead, carriers will find new ways to use existing systems more efficiently while adding network elements that provide new services. The key to 3G is convergence - not only a technological convergence of different kinds of communications but, more importantly, a convergence for business reasons.

Few major carriers today have a single network that offers one kind of communications service. Many larger service providers offer wireline, wireless and Internet access in multiple locations using a variety of transmission technologies, standards and vendors. To operate efficiently, carriers must converge these operations to one manageable, efficient network. To compete in an increasingly crowded field, they must provide applications and services that customers can use wherever they are.

There is a veritable alphabet soup of standards and protocols under discussion for 3G. In the United States, CDMA, TDMA GSM and iDEN are used, depending on location and carrier. GSM is widely used in much of the rest of the world, but over different frequencies. Wideband CDMA (WCDMA), multi-carrier CDMA (cdma2000) and EDGE have been identified as migratory paths for high-speed wireless data services.

Industry debate notwithstanding, the most important acronym in 3G is IP. Just as the wireline world is changing from traditional circuit-switched networks to data-oriented packet-switched networks, the transition to 3G is a shift to packet-switched wireless. This transition retains the benefits of wireless mobility while adding the benefits of a data network. People will still have access to standard cellular voice communications, but providers will be able to add information services that work in the mobile environment. By converging all communications onto a multi-service IP backbone, operators can achieve economies of scale for network management and customers can obtain their communications services anywhere and anytime. IP also enhances a service creation environment that will allow operators to compete on the basis of IN features.

Today the truly seamless global network is still a dream. The recent -- and ongoing -- spate of mergers and acquisitions in the telecom community has created networks that in many cases look like the Frankenstein monster, a hodge-podge of bits and pieces loosely stitched together. One company may operate with three different wireless standards on a couple of different frequencies, along with operating a data network and offering local and long-distance wireline telecommunications. Customers of these kinds of companies receive different services in different ways depending on which network they access and where they are. If they access the network from a new location or node, they may be using services from the same company, but the services they receive may seem quite different. This is because operators must currently recreate each service for each network they operate.

An open, standards-based service platform and an IP backbone linking disparate networks are essential to turning the Frankenstein monster into a seamless, global system with universal services. The platform will allow carriers to create a service concept once in a standard format like Java and distribute it to users throughout the network via the IP backbone. Not only do customers benefit by better access to their services, but operators also simplify their networks and reduce the cost of service development.

Services will drive competition in the 3G world. Already, voice has become a commodity. With the advent of one-rate service plans, voice ceased to become a real profit center or competitive edge. Wireless carriers must continue to add value to their offerings by providing additional services such as network-based address books that are accessible anywhere from any terminal, unified messaging, location-based information services, access to other communication accounts -- as well as a host of services yet to be envisioned. Applications and services will let the 3G genie out of the bottle. Demand for services will drive wireless usage and will bring customers to the high-speed 3G networks.

Evolution to the global information access of 3G has already begun. Today there are handsets that allow international roaming by working on a variety of networks and frequencies. There are intelligent network platforms for service creation and deployment. Wireless data is here -- CDPD for circuit-switched networks and GPRS high-speed data offerings to be implemented this year in Europe and next year in the United States.

A next step is connecting the communications networks to an IP backbone, linking wireless, wireline and Internet access. Several operators currently offer all these services, and we're starting to see single-rate price plans that work across a variety of services. IP as a backbone transmission mechanism for voice telephony is becoming more common throughout the world. Today's data networking technology takes the multi-service network concept into consideration. Routers, switches and other backbone equipment are being designed with multiple services, such as voice and video, in mind.

In the world of 3G, there will be what looks to customers like one large wireless communications network. Services will be location-independent so customers will have a personal "number" or address that follows them wherever they go. They will access their communications services in the most convenient way -- most likely via wireless means. It is important to end users that the means of transmission are invisible. Carriers will manage one network, even though parts of it transmit data over radio waves and parts over wires. They will be able to implement services globally, and they will compete on the strength of their service offerings.

Reaching this state will require a change of mindset for both customers and operators. Many of the models we use today in the telecommunications business will become obsolete. For example, the location independence of IP makes it impossible to charge for long-distance service. New pricing structures based on quality of service and application usage must develop as well as the associated billing solutions.

The move to 3G is inevitable, and it is something both wireless and wireline carriers face. Competition and the importance of services will drive it, as will ever-growing demands for both mobility and bandwidth. Operating costs also will play an important role. Even the large carriers will have to streamline operations to compete, and making all their pieces play together will be essential.

Growing pains as this transition is made are likely, but the operators who begin planning their evolution now will have an advantage. By thinking in terms of 3G when implementing technology or developing services, carriers will be able to evolve along the way while protecting investments in their legacy infrastructure.

-end-

About the author: Keith Shank is director of strategic marketing and business development for the Network Operators Group of Ericsson Inc. He develops strategies for Ericsson’s wireless and wireline activities and for using strategic alliances and external technology provisioning to enhance the company’s business solutions. Shank joined Ericsson in 1987 and has served in a number of management positions, most recently as director of TDMA/AMPS product management. Before joining Ericsson, Shank spent 11 years as a senior engineer for Compucon Inc.

Article: Telephony
By Keith Shank, Director of Strategic Marketing and Business Development for the Network Operators Group of Ericsson Inc.