3G's strange times

Robert Clark
09 Nov 2007

For what is supposed to be a mature technology, the world of 3G has been unusually active lately - and active in an unusual way.

First, was Hong Kong's license auction, or non-auction. For a start, the regulator departed from its traditional technology neutrality in mandating that the 800-MHz spectrum be dedicated to cdma2000 services.

The auction went ahead despite the objections of the incumbent carriers. They would, wouldn't they, but Hong Kong surely takes the crown as the world's most wired city, with five mobile operators, four 3G networks and four broadband networks.

The sale clearly had more to do with squeezing more rent out of a resource than addressing any needs in the telecom market.

PCCW won the auction by default. You'd think that in committing to a $30 million new license management might have a word or two to say. Like, why we bought yet another 3G license in a saturated market. For all we know, Richard Li's team may have bid only to drive the price higher for its competitor - a classic example of game theory gone wrong. The smart money, though, seems to be that its 20% shareholder, China Netcom, currently in search of a mobile license, was behind the deal.

So, there's our first 3G oddity. A license that no one wanted, quite possibly including carrier that bid for it.

The next surprise has been the embrace of Wimax into the 3G family. This is a coup for Wimax, as the only technology to join the IMT-2000 standards since they were approved in 2001. It puts the imprimatur of the global mobile industry onto a technology that has so far been much more about fixed-line data than mobile voice. The decision by ITU-R last month recognizes that 4G, or LTE, is all about OFDM and TD.

So where does that leave 3G‾ It has been around long enough to have staked out its own piece of the market.

But after six years, W-CDMA operators have clocked up just 115 million subs, or 4% of the global cellular base, according to the GSM Association's Q1 figures. GSM has 81% of the total. CDMA EV-DO claims 57 million.

3G has never delivered the lift in mobile data usage that was expected. Operators have locked their content inside walled gardens. The fresh apps dreamed up to stimulate users, like MMS and mobile TV, have never performed anywhere near the levels anticipated.

Real broadband

Now the big hope is HSDPA, or HSPA. No question, it's real broadband, offering as much as 2.8 Mbps, and US carriers have already signed up five million. No question it can be very successful, too - but it all comes down to pricing.

One reason for 3G's indifferent sub numbers is that it is not yet in the two huge markets, India and China. India is edging toward 3G in its own way but China, with one-sixth of the world's mobile population, has been delaying introduction almost certainly in order to favor TD-SCDMA (officially, its own standard although most of the IPR is owned by foreign vendors).

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