Conclusions: Lessons for a new generation

5.7.1 Lessons for a new generation

Of the countries studied, and of those that chose to award 3G licences early on, Japan and Korea were the first to forge ahead with deploying fully-fledged 3G services commercially. The experience of Japan and Korea would suggest the huge potential of the mobile Internet. However, the high hopes held for mobile services have been somewhat dampened by the slump of recent years in the telecommunication sector as a whole, as well as evidence that some mobile markets are reaching saturation. Many of the operators in the countries that have yet to initiate 3G deployment are taking a more gradual, or cautious approach, concentrating their efforts on new multimedia-type applications over existing second-generation platforms, with many choosing to upgrade their systems to support higher data transmission speeds needed for images.

This approach may be a useful way to “test the waters” for 3G, or to exploit more fully the potential of 2.5G technologies without the need to invest heavily in new 3G networks. Even where appetites for mobile multimedia services have been whetted, the real test of mobile Internet services is still to come.

In many less developed countries, mobile telephony has been a real boon to extending universal access, forgoing the need to pump financial resources into fixed-line infrastructure, and offering low-cost access to communications in rural areas. Latin American countries like Chile and Venezuela have actively harnessed this potential, and their example of proactive regulatory and government policy-making could serve as useful models for other less developed countries. An evident key to the success of mobile data services such as SMS, as opposed to purely voice services, is the use of prepaid schemes, as exemplified par excellence in the case of the Philippines, but also borne out elsewhere. SMS has been the unexpected “killer application” that has sometimes—ironically—filled a gap that needed filling, but which may have effectively delayed 3G licensing. The “SMS phenomenon” shows that hitting on the elusive “killer application” for the mobile Internet may be a key factor in its success.

Experience has shown that licensing needs to be carefully timed and priced to ensure network development and healthy competition—and that there is no “one-size-fits-all” model for 3G licensing. The licensing process needs careful regulation with a view to the introduction of competition, to stimulate network development, expand the market and achieve economies of scale. The cases of Hong Kong and China highlight the importance of the licensing process and of regulatory approaches to 3G, showing above all that competition stimulates growth.

The experience of Japan in particular (see Box 5.1) shows that operators and regulators alike need to be aware of the demand-driven need for roaming and interconnectivity, which is becoming increasingly important as mobile technologies and applications converge, and as the market becomes increasingly global.

Another sign of these times of convergence, is the practice of optimizing investments by sharing infrastructure, for example by operators with the most developed networks leasing space on transmission masts, thereby encouraging market entry by smaller players, and expediting network roll-out. As the example of Sweden shows however, such arrangements are subject to conflicts of interest between competitors, public environmental and pricing concerns, and regulatory prerogatives, which call for some foresight on the part of regulators if legal wrangling is not to further delay the deployment of 3G services.

One observation to made on the basis of different countries’ experience worldwide, is that while mobile has its own obstacles to diffusion, the Internet has perhaps even greater ones. Obstacles to dial-up Internet usage include insufficient fixed-line infrastructure, (as illustrated by the case of Venezuela where Internet diffusion has been slow), limited bandwidth availability and lack of financial resources. The mobile Internet could offer a means to overcome these problems, but even the mobile Internet will still remain inaccessible to many unless locally-relevant content exists, language barriers are lifted, and literacy levels are raised, implying a determined effort on the part of governments. Thailand is one example of a country where the low level of knowledge of English has been an obstacle to Internet use, contrasting on one hand with

Singapore, where English is widely understood, and on the other hand with Korea, where efforts to develop Internet content in the indigenous language, Hangeul, and the availability of handsets that support the language characters, have been highly successful. The positive promotion of Internet development by governments does make a difference. In Chile, where the Government has been proactive in fostering creativity, training opportunities, content and e-government initiatives, Chileans have become versed in using the Web, and the production of locally relevant content has been stimulated.

Drawing different country cases together not only enables practical insights and lessons to be drawn, but also gives a larger sense of the human implications of new technologies such as the mobile Internet. The inborn need to communicate of all humans across the globe drives them to do so in ever-growing series of diverse, creative and essentially different ways. The mobile Internet is an exciting new platform for communication, but we should not expect it to be tied to the social or cultural norms of any one group of people. This may make the task harder, but marketing strategies need to be designed taking on board what makes us different—as individuals, as local communities, and as peoples. After all, those very differences are what give us our passion for communication.

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1 For the purpose of clarity, Hong Kong, China is hereinafter referred to as “Hong Kong”.

2 The full case studies are available at: http://www.itu.int/osg/spu/casestudies/index.html. The choice of countries selected in no way implies a greater level of regulatory, technical or other advancement over countries not

mentioned, but is intended to provide as wide and varied a range of examples as possible, while reflecting different regional contexts. Also, the scope of each country section in this chapter may vary according to the particular focus on a given theme. For statistical information on m-readiness in over 200 economies worldwide, refer to the annex to this report.

For the purposes of the present report, some of the case study material has been updated to reflect new developments since the studies were first carried out, for which the original authors’ contributions are gratefully acknowledged.

The authors concerned are: Chris Addy-Nayo (study on Ghana); Martin Hilbert (study on Chile and Venezuela);

Staffan Hultén (study on Sweden), and Xu Yan (study on China and Hong Kong, China).

3 The case studies, as well as a number of workshops and symposia, publications on CD-ROM, and

telecommunication indicators, are carried out by the ITU Strategy and Policy Unit (SPU), often in collaboration with the Telecommunication Data and Statistics Unit (TDS) of the ITU Telecommunication Development Bureau.

Further information about the ITU New Initiatives Programme, themes covered, and publications produced, is available at: http://www.itu.int/osg/spu/.

4 In March 2001, DoCoMo’s ARPU stood at: JPY 7’770 for voice calls and JPY 880 for i-mode. In March 2002, the corresponding ARPU was JPY 6’940 for voice calls, and JPY 1’540 for i-mode. The increase in ARPU for i-mode over that period makes up for the decrease in voice call ARPU. See NTT DoCoMo website at

http://www.docomo.co.jp/.

5 By the end of March 2002, the coverage area only comprised the centre of three major urban areas. As of April 2002, the FOMA network covered about 60 per cent of the population.

6 In addition to extension of coverage, DoCoMo plans to introduce a “Dual Network Service”, enabling subscribers to use their FOMA handsets in the coverage areas, while being able to use their 2G handsets using the same phone number outside those coverage areas.

7 This decision was taken in March 2002 by the 3rd Generation Partnership Project, a collaboration to produce globally applicable technical specifications and technical reports for a W-CDMA system. See http://www.3gpp.org/.

8 For NTT DoCoMo’s PHS services, data transmission increased from 58 per cent in March 2001 to 72.5 per cent in March 2002. NTT DoCoMo website at http://www.docomo.co.jp/.

9 Report on business models for next-generation mobile phones; MPHPT, Japan.

10 DoCoMo plans to develop a system whereby users can access other ISPs directly by 2003. Similarly, KDDI plans to open its mobile “EZweb” network on a case-by-case basis, but has yet to confirm a date. J-Phone has yet to declare an open network strategy, but is considering this possibility.

11 CDMA 1x, which is not strictly speaking a third-generation technology but which offers high transmission speeds of up to 2.4 Mbit/s, was accepted by ITU in 2002 as one of the IMT-2000 family of standards.

12 OECD “The development of broadband access in OECD countries”, 29 October 2002, available at http://www.oecd.org/pdf/M00020000/M00020255.pdf.

13 Year-end 2001 figures, ITU World Telecommunication Indicators Database.

14 See ITU case study: “The e-City: Singapore Internet Case Study”, ITU, 2001.

15 See the IDA media release of 3 June 2002 at: http://www.ida.gov.sg/. The round of 3G licensing, held in April 2001, was due to be conducted by auction, but this was aborted in the absence of other contenders. The licences were therefore sold by the IDA to the three incumbent mobile operators, for US$ 55’280’000 apiece. See also http://www.3gnewsroom.com/.

16 See for example “SingTel Mobile reviews 3G strategy” of 14 June 2002, at http://welcome.singtel.com/news/.

17 See IDA press release of 11 April 2002 at http://www.ida.gov.sg/Website/IDAhome.nsf/Home?OpenForm.

18 Figures reported by the Korea Network Information Center (KRNIC). See news article of 15 January 2002, at http://www.nic.or.kr/.

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19 2001 Statistical Report of Telecommunications Development, Ministry of Information Industry, 2002.

20 See: Bing Zhang, “Understanding China’s Telecommunications Policymaking and Reforms: A Tale of Transition toward Liberalization”, Telematics and Infomatics, No. 19, 2002, 331-349, at: http://www.elsevier.com/locate/tele.

21 China Mobile (HK) Annual Report 2001.

22 Ibid.

23 Lu, T.J., “The Development of Mobile Commerce in China”, Proceeding of Asia-Pacific Mobile Communications Symposium, 2000, pp. 100-110.

24 See diagram showing the relationships between the various standards and evolution paths shown in Chapter two of this report.

25 Wang, F., “A great stride towards 3G’s future”, Datang Group Newsletter, 1 April 2001.

26 Interview with ZTE of 26 April 2001.

27 ITU World Telecommunication Indicators Database.

28 Ibid.

29 See: “The country we want” at http://www.gobiernodechile.cl/.

30 The introduction of EDGE is considered by some local analysts to be a lucrative alternative for mobile operators who are reluctant to move straight to “pure” 3G.

31 Perspective, Pyramid Research, Latin America, 17 July 2002.

32 Familiar factors seem to underly the poor performance of WAP, including poor content provision and scarcity of terminals, as well as an as yet underdeveloped culture of Web usage.

33 Comparative Assessment of the Licensing Regimes for 3G Mobile Communications in the European Union and their Impact on the Mobile Communications Sector, European Commission, Directorate-General Information Society, Final Report, 25 June, 2002.

34 Ibid.

35 See ITU Case study on Sweden for details of the various consortia established in Sweden, at http://www.itu.int/osg/spu/casestudies/index.html.

36 NMT stands for “Nordic Mobile Telephony”.

37 Figures from African cellular statistics at: http://www.cellular.co.za/stats/stats-africa.htm.

38 See: http://www.ghanaweb.com/GhanaHomePage/NewsArchive/wap.php.

39 See: http://www.infodev.org/.

40 See a selection of African cellular statistics at: http://www.cellular.co.za/stats/stats-africa.htm.

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