IntJ Mobile Communication. Vol 2 No.1. 2004 Mobile communications: global trends in the 21st century Sameer Kumar College of Business, University of St. Thomas, Mail #f TMH 343, 1000 LaSalle Avenue, Minneapolis, MN 55403-2005, USA Fax:6519624710 E-mail: skumar@ stthomas edu Abstract: The paper presents an overview of the mobile communications ndustry. Many aspects of the industry are analysed including the importance of nobile communications, brief history of the industry and mobile applications such as mobile phones, satellites, other handheld devices, wireless computin and m-commerce. The competitive landscape of the mobile phone market is explored based on competing protocols or standards, airtime carriers and handset providers. Trends and forecasts predicted by experts for the industry are also outlined. The key characteristics of the Us mobile market are compared with that of European and Asian markets Keywords: mobile communications: mobile market; mobile applications m-commerce; wireless computing Reference to thi should be made as follows: Kumar, S.(2004) Mobile communications: global trends in the 21st century, Int. J. Mobile Communication. Vol Biographical notes: Sameer Kumar is a Professor and Qwest Endowed Chair in Global Communications and Technology Management in the Department of Management, College of Business at the University of St Thomas, Minneapolis, Minnesota. His major areas of interests include optimisation concepts applied to supply chain management, information technology, process innovation capital investment justifications and total quality management effectiveness 1 Introduction In the current information era, mobile communications has enabled us to use laptop personal computers linked to the internet without a'wiredLaN. Simply put, if the internet gave us the ability to access any web address on a desktop, mobiles have given us the access at any time and from anywhere. This capability, derived from modern telecommunication technology, is crucial in conducting international business operations Nevertheless, due to various mobile protocols and networks available in different parts of the world nowadays, for example, analogue, GSM, TDMA or CDMA, it becomes challenging for the airtime providers to expand their services across technological compatibility. The developing Third-Generation(3G) standard is attempting to unify all new-generation mobile devices in a single platform. With the new standard, the mobile gadgets may replace desktop PCs, laptop PCs, credit cards or even wallets in the near future[1. Copyright o 2004 Inderscience Enterprises Ltd
Int. J. Mobile Communication, Vol. 2, No. 1, 2004 67 Copyright © 2004 Inderscience Enterprises Ltd. Mobile communications: global trends in the 21st century Sameer Kumar College of Business, University of St. Thomas, Mail # TMH 343, 1000 LaSalle Avenue, Minneapolis, MN 55403-2005, USA Fax: 651 962 4710 E-mail: skumar@stthomas.edu Abstract: The paper presents an overview of the mobile communications industry. Many aspects of the industry are analysed including the importance of mobile communications, brief history of the industry and mobile applications such as mobile phones, satellites, other handheld devices, wireless computing and m-commerce. The competitive landscape of the mobile phone market is explored based on competing protocols or standards, airtime carriers and handset providers. Trends and forecasts predicted by experts for the industry are also outlined. The key characteristics of the US mobile market are compared with that of European and Asian markets. Keywords: mobile communications; mobile market; mobile applications; m-commerce; wireless computing. Reference to this paper should be made as follows: Kumar, S. (2004) ‘Mobile communications: global trends in the 21st century’, Int. J. Mobile Communication, Vol. 2, No. 1, pp.67–86. Biographical notes: Sameer Kumar is a Professor and Qwest Endowed Chair in Global Communications and Technology Management in the Department of Management, College of Business at the University of St Thomas, Minneapolis, Minnesota. His major areas of interests include optimisation concepts applied to supply chain management, information technology, process innovation, capital investment justifications and total quality management effectiveness. 1 Introduction In the current information era, mobile communications has enabled us to use laptop personal computers linked to the internet without a ‘wired’ LAN. Simply put, if the internet gave us the ability to access any web address on a desktop, mobiles have given us the access at any time and from anywhere. This capability, derived from modern telecommunication technology, is crucial in conducting international business operations. Nevertheless, due to various mobile protocols and networks available in different parts of the world nowadays, for example, analogue, GSM, TDMA or CDMA, it becomes challenging for the airtime providers to expand their services across technological incompatibility. The developing Third-Generation (3G) standard is attempting to unify all new-generation mobile devices in a single platform. With the new standard, the mobile gadgets may replace desktop PCs, laptop PCs, credit cards or even wallets in the near future! [1]
2 Why go mobile Mobile communication allows people to stay in touch with each other at anytime, almost anywhere and through handheld devices. Unconstrained by wires, mobile-system users can communicate while travelling as fast as about 60 miles (100 km)per hour The mobile phone converts the speaker's voice into radio waves that travel through the air until they reach a receiver at a nearby base station. The base station then sends the call through the telephone network to the intended recipient. The initial impetus for developing and marketing mobile telecommunications systems was to offer consumers mobility. At first, many consumers were not enticed by this capability due to its higher cost compared with fixed lines. However, that difference declining as companies create national or regional networks and alliances that offer pricing plans without roaming fees(charges for calls outside the carriers service area Unlike most countries in the world, in the USA, mobile phone users incur charges, whether the call is incoming or outgoing, thus bearing higher total cost. The full-feature capabilities of digital phones along with declining service charges have reduced the importance of pagers in the wireless industry. The introduction of two-way paging(which enables users to receive, store and play digitised voice messages) met with a disappointing response. The cellular phone is far more versatile in companson Short message service (SMS), based on GSM technology, is one of the fastest-groy services in mobile communications today on a global basis Nearly 32 billion messages per month were transmitted globally via SMS in February 2003[2] 2.1 Mobile vs wireless The terms, mobile and wireless, used in the Telecommunications industry, have their own specific meanings, but they share some common characteristics. For example, mobile vs stationary indicates the ability to access while the device is moving. Similarly, wireles vs. wired means ability to access while the device is not physically connected by a wired line In this paper, the reader will find both terms interchangeable. Even though mobile/wireless technologies can transmit voice and data by means of radio waves, infrared rays, microwaves and electromagnetic waves, this paper mainly discusses merely applications utilising radio waves as the medium due to its popularity 2.2 History 3) Digital wireless and cellular roots go back to the 1940s when commercial mobile telephony began or even as early as in the beginning of 1910s when radio transmission was first tested. Compared with the furious pace of development today, it may seem odd that mobile wireless has not progressed further in the last 100 years. Where are our video watch phones? There were many reasons for this delay, but the most important ones were technology, cautiousness and federal regulation. As the loading coil and vacuum tube made possible the early telephone network, the wireless revolution began only after low cost microprocessors and digital switching
68 S. Kumar 2 Why go mobile? Mobile communication allows people to stay in touch with each other at anytime, almost anywhere and through handheld devices. Unconstrained by wires, mobile-system users can communicate while travelling as fast as about 60 miles (100 km) per hour. The mobile phone converts the speaker’s voice into radio waves that travel through the air until they reach a receiver at a nearby base station. The base station then sends the call through the telephone network to the intended recipient. The initial impetus for developing and marketing mobile telecommunications systems was to offer consumers mobility. At first, many consumers were not enticed by this capability due to its higher cost compared with fixed lines. However, that difference is declining as companies create national or regional networks and alliances that offer pricing plans without roaming fees (charges for calls outside the carrier’s service area). Unlike most countries in the world, in the USA, mobile phone users incur charges, whether the call is incoming or outgoing, thus bearing higher total cost. The full-feature capabilities of digital phones along with declining service charges have reduced the importance of pagers in the wireless industry. The introduction of two-way paging (which enables users to receive, store and play digitised voice messages) met with a disappointing response. The cellular phone is far more versatile in comparison. Short message service (SMS), based on GSM technology, is one of the fastest-growing services in mobile communications today on a global basis. Nearly 32 billion messages per month were transmitted globally via SMS in February 2003 [2]. 2.1 Mobile vs. wireless The terms, mobile and wireless, used in the Telecommunications industry, have their own specific meanings, but they share some common characteristics. For example, mobile vs. stationary indicates the ability to access while the device is moving. Similarly, wireless vs. wired means ability to access while the device is not physically connected by a wired line. In this paper, the reader will find both terms interchangeable. Even though mobile/wireless technologies can transmit voice and data by means of radio waves, infrared rays, microwaves and electromagnetic waves, this paper mainly discusses merely applications utilising radio waves as the medium due to its popularity. 2.2 History [3] Digital wireless and cellular roots go back to the 1940s when commercial mobile telephony began or even as early as in the beginning of 1910s when radio transmission was first tested. Compared with the furious pace of development today, it may seem odd that mobile wireless has not progressed further in the last 100 years. Where are our video watch phones? There were many reasons for this delay, but the most important ones were technology, cautiousness and federal regulation. As the loading coil and vacuum tube made possible the early telephone network, the wireless revolution began only after low cost microprocessors and digital switching
Mobile communications: global trends in the 21st century became available. The Bell System, producers of the finest landline telephone systems in the world, moved hesitatingly and at times with disinterest toward wireless. Anything AT&T produced had to work reliably with the rest of their network and it had to make economic sense, something not possible for them with the few customers permitted by the limited frequencies available at the time Frequency availability was in turn controlled by the Federal Communications Commission (FCC), whose regulations and unresponsiveness constituted the most significant factors hindering radio-telephone development, especially with cellular radio, delaying that technology in the USa by perhaps 10 In Europe and Japan, though, where governments could regulate their state run telephone companies to a lesser extent, mobile wireless came no sooner, and in most cases later than the USA. Japanese manufacturers, although not the first with a working cellular radio, did equip some of the first car mounted mobile telephone services, and their technology was equal to whatever the USA was producing. Their products enabled several first commercial cellular telephone systems, starting in Bahrain, Tokyo, Osaka and Mexico City Table 1 lists the key technology milestones in the mobile communication industry Table 1 Key technology milestones in mobile communication industry Guglielmo Marconi's first wireless telegraphy sent signals across the Atlantic ocean 1910 The first car-telephone by Ericsson The first commercial American radio-telephone service by at& T and Southwestern Bell The first commercial cellular radio system by Bell System 1973 The first handheld cell phone by motorola 78 First generation of analogue cellular systems by bahrain Telephone Company 1982 The rise of GSM in western Europe 990 North American set IS-54B standard up for digital cellular systems using TDMA 3 Mobile applications [4] A number of widely used mobile applications are briefly described in this section. These include: mobile phones, mobile satellites, handheld devices, wireless computing and mobile commerce(m-commerce ). 3.1 Mobile phones This would be counted as the most obvious example of mobile applications based number of users, as many as 1.3 billion worldwide in early 2003. Table 2 shows a statistics snapshot of the mobile industry as of February 2003 according to Cellular Online [2] The mobile utilisation can be classified according to geographic distribution given in Table 3
Mobile communications: global trends in the 21st century 69 became available. The Bell System, producers of the finest landline telephone systems in the world, moved hesitatingly and at times with disinterest toward wireless. Anything AT&T produced had to work reliably with the rest of their network and it had to make economic sense, something not possible for them with the few customers permitted by the limited frequencies available at the time. Frequency availability was in turn controlled by the Federal Communications Commission (FCC), whose regulations and unresponsiveness constituted the most significant factors hindering radio-telephone development, especially with cellular radio, delaying that technology in the USA by perhaps 10 years. In Europe and Japan, though, where governments could regulate their state run telephone companies to a lesser extent, mobile wireless came no sooner, and in most cases later than the USA. Japanese manufacturers, although not the first with a working cellular radio, did equip some of the first car mounted mobile telephone services, and their technology was equal to whatever the USA was producing. Their products enabled several first commercial cellular telephone systems, starting in Bahrain, Tokyo, Osaka and Mexico City. Table 1 lists the key technology milestones in the mobile communication industry. Table 1 Key technology milestones in mobile communication industry Year Technology milestone 1901 Guglielmo Marconi’s first wireless telegraphy sent signals across the Atlantic ocean 1910 The first car-telephone by Ericsson 1946 The first commercial American radio-telephone service by AT&T and Southwestern Bell 1969 The first commercial cellular radio system by Bell System 1973 The first handheld cell phone by Motorola 1978 First generation of analogue cellular systems by Bahrain Telephone Company 1982 The rise of GSM in western Europe 1990 North American set IS-54B standard up for digital cellular systems using TDMA technique 3 Mobile applications [4] A number of widely used mobile applications are briefly described in this section. These include: mobile phones, mobile satellites, handheld devices, wireless computing and mobile commerce (m-commerce). 3.1 Mobile phones This would be counted as the most obvious example of mobile applications based on number of users, as many as 1.3 billion worldwide in early 2003. Table 2 shows a statistics snapshot of the mobile industry as of February 2003 according to Cellular Online [2]. The mobile utilisation can be classified according to geographic distribution given in Table 3
70 S. Kuma Table 2 Mobile statistics snapshot as of February 2003 Total analogue users 34 million Total US mobile users 140 million Total global GSM users 793 million Total global CDMA users Total global CDMA 2000 users Total TDMA users 120 million Total African users 34 million Total 3G users 130 million Total South African users 14 million European prepaid penetration 63% Europeanmobile penetration Global phone shipments 2001 393 million Global phone sales 2Q0 96.7 million #l mobile country China(200 million) #I GSM China(130 million) # l handset vendor 2Q02 Nokia(37.2%) #I network in asia Unicom #I network in Europe T-Mobil (22.3 million) #1 in infrastructure Global monthly SMS/user 36 SMS sent globally 4Q02 95 billion SMS Sent in UK 12/02 1.3 billion SMS sent in Germany 4Q0 SMS sent 2002 GSM countries on air GSM association members 57 Total cost of 3G licenses in euro 110 billion euros Table 3 Mobile use by geographic distribution Geographic region North america Asia Pacific 36 South america Middle east
70 S. Kumar Table 2 Mobile statistics snapshot as of February 2003 Total analogue users 34 million Total US mobile users 140 million Total global GSM users 793 million Total global CDMA users 159 million Total global CDMA 2000 users 30 million Total TDMA users 120 million Total European users 320 million Total African users 34 million Total 3G users 130 million Total South African users 14 million European prepaid penetration 63% European mobile penetration 70.2% Global phone shipments 2001 393 million Global phone sales 2Q02 96.7 million #1 mobile country China (200 million) #1 GSM country China (130 million) #1 SMS country Philippines #1 handset vendor 2Q02 Nokia (37.2%) #1 network in Asia Unicom #1 network in Japan DoCoMo #1 network in Europe T-Mobil (22.3 million) #1 in infrastructure Ericsson Global monthly SMS/user 36 SMS sent globally 4Q02 95 billion SMS sent in UK 12/02 1.3 billion SMS sent in Germany 4Q02 30 billion SMS sent 2002 366 billion GSM countries on air 190 GSM association members 574 Total cost of 3G licenses in Europe 110 billion Euros Table 3 Mobile use by geographic distribution Geographic region Mobile use (%) North America Asia Pacific Africa Europe South America Middle East 21 33 1 36 8 1
Mobile communications: global trends in the 21st century 3.2 Mobile satellite To complement the cellular phone and wireless computing networks, mobile satellites offer a combination of all-digital transparent voice, data, fax and paging services to and from handheld telephone devices. The systems share an air interface standard named Geostationary Mobile Satellite Standard (GMMS) that is similar to GSM. This means that the Satphone customers will be able to use mobile phones that are compatible with satellite systems in any country where GMsS is offered; in effect, creating roaming capabilities that normal land-based mobile phone users need to pay extra for when the handsets are used in areas outside the network coverage. O,. Nowadays, there are over 1000 satellites orbiting the globe. The number will climb to r 1500 satellites in 2008. They can be positioned in orbits with different heights and shapes(circular or elliptical). Based on the orbital radius, all satellites fall into one of the following three categories: Low Earth Orbit (LEO), Medium Earth Orbit(MEO)and Geostationary Earth Orbit(GEO)as illustrated in Figure I Table 4 summarises the design issues related to different types of satellite constellations 5] Figure 1 Mobile satellites in various earth orbits: LEO, MEO and geo Table 4 Design issues associated with different types of satellite constellations Constellation LEO MEO GEO Altitude 100-1500 miles 6000-12000mles22282 miles Line of sight min 2-4 hours Lower launch costs Moderate launch. Covers 42. 2 of the trip delays Small roundtrip Constant view delays Cons · Very short life: Very large round trip 1-3 months · Greater path loss delays(0.1 s) · Encounters Expensive earth stations radiation belts due to weak signal
Mobile communications: global trends in the 21st century 71 3.2 Mobile satellite To complement the cellular phone and wireless computing networks, mobile satellites offer a combination of all-digital transparent voice, data, fax and paging services to and from handheld telephone devices. The systems share an air interface standard named Geostationary Mobile Satellite Standard (GMMS) that is similar to GSM. This means that the Satphone customers will be able to use mobile phones that are compatible with satellite systems in any country where GMSS is offered; in effect, creating roaming capabilities that normal land-based mobile phone users need to pay extra for when the handsets are used in areas outside the network coverage. Nowadays, there are over 1000 satellites orbiting the globe. The number will climb to over 1500 satellites in 2008. They can be positioned in orbits with different heights and shapes (circular or elliptical). Based on the orbital radius, all satellites fall into one of the following three categories: Low Earth Orbit (LEO), Medium Earth Orbit (MEO) and Geostationary Earth Orbit (GEO) as illustrated in Figure 1. Table 4 summarises the design issues related to different types of satellite constellations [5]. Figure 1 Mobile satellites in various earth orbits: LEO, MEO and GEO Table 4 Design issues associated with different types of satellite constellations Constellation LEO MEO GEO Altitude 100–1500 miles 6000–12000 miles 22282 miles Line of sight time 15 min 2–4 hours 24 hours Pros • Lower launch costs • Very short round trip delays • Small path loss • Moderate launch cost • Small roundtrip delays • Covers 42.2% of the earth’s surface • Constant view Cons • Very short life: 1–3 months • Encounters radiation belts • Larger delays • Greater path loss • Very large round trip delays (0.1 s) • Expensive earth stations due to weak signal