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Mobile Section 4: Questions regarding the impact of third generation (3G) systems

Question 4: How will 3G systems change the industry and the market over the next five years?

As the first version of standards for 3G systems was completed in 1999, waiting for official approval in 2000, the licence selection process was underway in many countries. This transition to a new generation of systems will involve difficult business decisions. While 3G opens up a whole new range of mobile internet applications, as we have seen in Question 2, its deployment requires a huge investment.

Will the revenues from these new applications be sufficient to justify the sums involved?

What should the deployment strategy be?

Will it be a gradual process through the use of dual mode terminals, which will select the 3G radio channel if available, but which will also be able to communicate with the 2G radio channel?

Will such dual-mode terminals be cost effective?

Or will the dominant operator be the company which has deployed 3G systems quickly in order to be the first to cover major nationwide areas?

It is interesting to note that in the US one of the reasons why the penetration of 2G systems is low (9.1 per cent compared with 37.5 per cent in Japan and 24.2 per cent in Western Europe in 1998) can be attributed to the high penetration of the 1G analogue system (16.9 per cent compared to 3.9 per cent in Japan and below 5 per cent in Western Europe). Another reason is the existence of multiple standards (this was looked at in Technical features that characterise mobile communications)

While operators with 2G system infrastructure will try to maximise its use, newcomers with no vested interest in this increasingly obsolete legacy system will fully exploit the advantages of 3G by aligning with service and application providers in Layers III to V to offer attractive new internet applications.

So, will the 3G systems change the industry and market over the next five years and, if so, how?

If you wish to express your views on questions such as these go to the Mobile Workshop. To compare your visions with those of others go to Vision Check - Mobile.