GSM ALREADY IN THE PAST

Sophico Sichinava

Specialists estimate that two or three years later most cellular communication operators will pass to the third generation standards. Meanwhile, consumers will have to think before deciding on a telephone: GPRS or 3G.

However, some specialists are skeptical towards the new standards saying the number of GSM consumers reaches 1 billion while the number of 3G consumers is 1,8 million. New standards slowly come in use. The first network of the third generation cellular communication has already started functioning in Moscow. Company Iberiatel has actively worked on introducing new standards in Georgia. It now looks for investors. The event is very important given the fact that 3G technology development has not been simple being a main topic for discussion in the communications sphere. Despite this, the third generation cellular communications in Moscow are quite different from those in the West. The third generation wireless communication has been so popular in Russian press that its name 3G has turned to a brand like GSM used by many operators for their logo types. 3G is a wireless video telephone with colourful monitor and camera. When speaking, you can see each other in the phone. The service is called video conference communication being a visit card of 3G.
Menu of company Skylink that has been selling its production in Moscow since 1 November, does not have video conferencing. The company’s production makes it possible to shoot a life video. However, telephones of the standards have not yet been produced. This requires great investments. As very few people use service of the mentioned standard, there is no sense in launching the business yet.
The name of the standards used by Skylink is IMT-MC-450 originating from the Far East standards-CDM-2000. IMT-MC-450 characterised by many third generation features has already been created. It functions in Russia, Rumania and Byelorussia.
The Peterburg company “Delta Telecom” sells IMT-MC-450 service under the same Skylink brand. According to ACM Consulting data, by June of this year the Rumanian operator of IMT-MC-450 Zapp Mobile has provided 119,6 thousand subscribers with service while Peterburg company Skylink served 15,2 thousands and Byelorussian Bercel ? 2,5 thousand.
The assortment of Skylink includes only two devices. People do not use the telephones as means of communication but rather as a modem for wireless communication. The maximal speed of IMT-MC-450 network is 153 kilobot a second. The speed is much greater than that of dial-up. Peterburg population interested in fast Internet service has valued the advantage all the more so that the price is agreeable ? 70 dollars a month.
The very Peterburg experience prompted communication managers of Russia to expand IMT-MC-450 network built in most cities of Russia. The Moscow Skylink network ended in a surprisingly short time. In August Moscow Sotovaya has accepted the credit line in Sberbank, it signed agreement with the equipment supplier Lucenet Technologies in August and since 1 November the service has been offered for sale.
Skylink has not yet made the tariffs public though the company’s marketing policy is clear: stake is made on wireless Internet. “We will occupy the separate niche of the market”, – general director of Moskovskaya Sotovaya said. He added: “I do not argue that the fixed communication operators’ positions are stable in the largest cities, many consumers already use fast Internet service both at home and at work though we dare to compete with Dial-up Internet providers: it is a reliable and excellent decision given the 70-80 kilobyte a second”.
However, it is not yet clear whether IMT-MC-450’s operators will manage to compete with GSM operators. In this stage, chances are low though in Europe expected interest towards these standards plays a favourable role in their distribution.
Representatives of cellular communication companies who work in accordance with GSM standards do not think new standards will provoke a strong competition. They say IMT-MC coverage area will be limited and there will be no roaming. Besides, specialists say GSM can easily provide service that does IMT-MC-450 through GPRS technology.
Many people think that despite many advantages competition of any standards with GSM ones holding 70% of mobile communication share in the global market is unimaginable. GSM has about 1 billion consumers in the world while 3G has only 1,8 millions.
However, it is still early to assert that the new achievement will be no success as there are people who lay great hopes on 3G and feel optimistic about its prospects due to the high Internet speed and ideal audibility.
Company Iberiatel has been introducing new standards in Georgia. It has participated in the country’s telecommunication market since 1999.
In 19 September 2002 Iberiatel signed call-off agreement on the introduction of CDMA450 (IMT-MC) (digital cellular standards) in Georgia with the Chinese company Huawei Technologies. The company will launch CDMA450 into exploitation by the end of the year and the service will be distributed around Georgia.
Nowadays, Iberiatel is a WLL (Wireless Local Loop) operator covering 70% of country’s area. When speaking about the development of telecommunication and CDMA450 system in Georgia, some imply increase of the geo-political function of South Caucasus crossed by the Euro-Asian corridor. The idea of restoring the Great Silken Road opens the door to the greatest perspectives. CDMA450 will also find its place here.
Today subscribers of Iberiatel are builders of Baku-Tbilisi-Jeikhan pipeline as well as company British Petroleum that is a consumer of NMT450. Commercial exploitation of CDMA450 is expected with great interest.
The company has already made a project for distributing CDMA450. There will be three categories of subscribers: a) WLL-individuals, corporations; b) trunk-call office, Internet cafes, business centres; c) Subscribers of mobile communication. Given the strong competition, the company intends to set low tariffs in order to attract the three categories of subscribers. According to financial calculations, covering the whole territory of Georgia with CDMA450 network requires small investments.
A few years ago the digital cellular standard CDMA450 emerged in the market and embarked on its goal-oriented development way. The world largest companies dealing with telecommunication equipment production have completely turned to these standards while those who wished to create CDMA450 network started work in CIS as well as in Baltic countries and West Europe. Nowadays, equipment for network is produced only by three companies: American Lucenet Technologies, Chinese Huawei Technologies and ZTE Corporation.
Such grandiose companies as Ericsson and Motorola have shown an interest in CDMA450.
CDMA projects have been actively realised in Russia. However, only two networks of the standard function in commercial regime: in Peterburg (operator Delta Telecom) and in Bashkiria (Sotovaya Svyaz of Bashkiristan). As mentioned above, Moskovskaya Sotovaya Svyaz has recently launched its business.
The local regulatory agency considered issuing CDMA450 licenses in September. The process is not supposed to begin by 2005. In other countries: the process develops faster in Norway and Portugal. Incidentally, even GSM operators got interested in CDMA450 as it was in Ukraine.
Thus, given the world events in this sphere, we should suppose that GSM will fall into past. Yet, the process needs time for convincing consumers in the advantages of new standards. We should also mention that CDMA450 operators appeal to agreeable prices and qualitative service. This will undoubtedly be a triumph.
P.S. It is noteworthy that now when 3G emerges in the market, Japanese concern NTT DoCoMo already works on the fourth generation cellular network. The concern announced beginning of works in March 2002. 4G will appear in the market 10 years later, concern’s general director said.