n for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive.

History lesson: Swedish generation shifts in analogue mobile

Analogue NMT 450 ® analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage, pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 ® Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case" it is profitable only in best case scenarios

Financial analysis shows the 3G Business case ROI is very dependent on: - Very high 3G penetration - Op

Third Generation or 3G Wireless was introduced in 2002 in Europe, America, Japan and other parts of the World simultaneously. It is yet to get more that 5% of the market share of the worldwide mobile market. In Japan it has a mere 5% penetration in spite of the hype that has been built on 3G.For another two years it is not going to provide global coverage. Even in most developed countries it is still not offered Nationally, wherever 3G coverage is given it is not purely 3G. Coverage. The mobile switches between different technologies like 2G/2.5G in various regions of a country. It is now more than 4 years since 3G was offered, why has 3G not come up as promised? To analyze the deployment and failure of 3G so far let us understand what factors are inhibiting the adoption of 3G in a big way and why 3G has not been able to stand ground till now and that too even when people have started talking about 4G implementation in 2010.

The wireless landscape in 2006 - There are several competing wireless infrastructures like 2G,GPRS, WLANs, 3G and other evolving technologies, which will later become a part of 4G Wireless. - There are both large WLAN operators and 1000s of local hot-spot operators and WLAN clearinghouses offering global roaming access. WLANs are built into Laptops and hand-helds - Mobile operators are operating in extreme price pressure but are still dominant in handling end user relation (billing, roaming, seamless mobility etc.) - A continuous suite of terminals from voice-only ear-phones, handsets, handhelds, & lap-tops etc. are flooding the Market

State of Pure 3G operators in 2006 - Insignificant user base - No trusted Brand - No complete network - Dependent on unfavorable deals with incumbent GSM operators

History of 3G The term 3G was coined at academic conferences around 1990. Then 3G meant everything beyond GSM One 3G vision was mobility by wireless plus personal phone-numbers, following the Individual globally at closest fixed line. Later the "1G", "2G", "3G" and even "4G" terminology was captured by equipment vendors in the mid 90s for selling UMTS to the market and regulators.

On arrival had to target the Users who were Already GSM customers (phone number, voice mail, trusted Brand etc.),High-end users already using GPRS,Users Expected the 151 country global coverage of GSM and at least national GPRS coverage.

3G Arrival

On arrival 3G was hidden from users in a 2G/3G offer,3G only offered service in cities. 3G was hidden from the users in a branded GSM/GPRS/3G combination offer. To offer 2G/3G service, pure 3G operators had to strike unfavorable deals for network access with 2G operators, Handsets are GSM/GPRS/3G hence very expensive and complex. Incumbent operators target existing user base with 2G®2.5G®3G migration offers. Pure 3G operators tried to strike deals with 2G operators to offer geographical coverage but 3G operators were unable to secure deals for access to the 2G networks. Pure 3G became seen as a step down from GSM.Both 3G and 2G/2.5G are standards .Standardization freezes performance at a certain technological level and performance jumps when a new standard is fixed which also demands a total infrastructure changeover. The performance jump of 3G Standard against 2G/2.5G Standard does not warrant a total infrastructure change.

The Rule-of-thumb New infrastructure must offer at least 10 times better performance to replace old large installed base (This rule-of-thumb comes from Andrew Groove at Intel in his book "Only The Paranoid Survive" and has not been properly verified)

- 3G performance jump is not large enough to justify infrastructure replacement - 3G offers only 3-4 times better spectral efficiency than 2.5G - 3G bandwidth only 2-10 times better than 2.5G - GPRS gives better geographical coverage than 3G - 3G offers better bandwidth but coverage is more important for the consumers - 3G networks not even close to offering the coverage of GPRS - GPRS, a software upgrade on the GSM networks will probably always offer better global coverage than 3G. - WLANs offer better bandwidth than 3G - WLANs are already here with a large installed base on many company lap-tops - It is possible to cover hot-spots and city centers at low cost for WLAN Service Providers - WLAN base stations cost very less - WLAN equipment market is already being adopted at a large scale GPRS together with WLAN is a better solution for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive.

History lesson: Swedish generation shifts in analogue mobile

Analogue NMT 450 ® analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage, pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 ® Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case" it is profitable only in best case scenarios

Financial analysis shows the 3G Business case ROI is very dependent on: - Very high 3G penetration - Op

art of 4G Wireless. - There are both large WLAN operators and 1000s of local hot-spot operators and WLAN clearinghouses offering global roaming access. WLANs are built into Laptops and hand-helds - Mobile operators are operating in extreme price pressure but are still dominant in handling end user relation (billing, roaming, seamless mobility etc.) - A continuous suite of terminals from voice-only ear-phones, handsets, handhelds, & lap-tops etc. are flooding the Market

State of Pure 3G operators in 2006 - Insignificant user base - No trusted Brand - No complete network - Dependent on unfavorable deals with incumbent GSM operators

History of 3G The term 3G was coined at academic conferences around 1990. Then 3G meant everything beyond GSM One 3G vision was mobility by wireless plus personal phone-numbers, following the Individual globally at closest fixed line. Later the "1G", "2G", "3G" and even "4G" terminology was captured by equipment vendors in the mid 90s for selling UMTS to the market and regulators.

On arrival had to target the Users who were Already GSM customers (phone number, voice mail, trusted Brand etc.),High-end users already using GPRS,Users Expected the 151 country global coverage of GSM and at least national GPRS coverage.

3G Arrival

On arrival 3G was hidden from users in a 2G/3G offer,3G only offered service in cities. 3G was hidden from the users in a branded GSM/GPRS/3G combination offer. To offer 2G/3G service, pure 3G operators had to strike unfavorable deals for network access with 2G operators, Handsets are GSM/GPRS/3G hence very expensive and complex. Incumbent operators target existing user base with 2G®2.5G®3G migration offers. Pure 3G operators tried to strike deals with 2G operators to offer geographical coverage but 3G operators were unable to secure deals for access to the 2G networks. Pure 3G became seen as a step down from GSM.Both 3G and 2G/2.5G are standards .Standardization freezes performance at a certain technological level and performance jumps when a new standard is fixed which also demands a total infrastructure changeover. The performance jump of 3G Standard against 2G/2.5G Standard does not warrant a total infrastructure change.

The Rule-of-thumb New infrastructure must offer at least 10 times better performance to replace old large installed base (This rule-of-thumb comes from Andrew Groove at Intel in his book "Only The Paranoid Survive" and has not been properly verified)

- 3G performance jump is not large enough to justify infrastructure replacement - 3G offers only 3-4 times better spectral efficiency than 2.5G - 3G bandwidth only 2-10 times better than 2.5G - GPRS gives better geographical coverage than 3G - 3G offers better bandwidth but coverage is more important for the consumers - 3G networks not even close to offering the coverage of GPRS - GPRS, a software upgrade on the GSM networks will probably always offer better global coverage than 3G. - WLANs offer better bandwidth than 3G - WLANs are already here with a large installed base on many company lap-tops - It is possible to cover hot-spots and city centers at low cost for WLAN Service Providers - WLAN base stations cost very less - WLAN equipment market is already being adopted at a large scale GPRS together with WLAN is a better solution for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive.

History lesson: Swedish generation shifts in analogue mobile

Analogue NMT 450 ® analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage, pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 ® Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case" it is profitable only in best case scenarios

Financial analysis shows the 3G Business case ROI is very dependent on: - Very high 3G penetration - Op

mber, voice mail, trusted Brand etc.),High-end users already using GPRS,Users Expected the 151 country global coverage of GSM and at least national GPRS coverage.

3G Arrival

On arrival 3G was hidden from users in a 2G/3G offer,3G only offered service in cities. 3G was hidden from the users in a branded GSM/GPRS/3G combination offer. To offer 2G/3G service, pure 3G operators had to strike unfavorable deals for network access with 2G operators, Handsets are GSM/GPRS/3G hence very expensive and complex. Incumbent operators target existing user base with 2G®2.5G®3G migration offers. Pure 3G operators tried to strike deals with 2G operators to offer geographical coverage but 3G operators were unable to secure deals for access to the 2G networks. Pure 3G became seen as a step down from GSM.Both 3G and 2G/2.5G are standards .Standardization freezes performance at a certain technological level and performance jumps when a new standard is fixed which also demands a total infrastructure changeover. The performance jump of 3G Standard against 2G/2.5G Standard does not warrant a total infrastructure change.

The Rule-of-thumb New infrastructure must offer at least 10 times better performance to replace old large installed base (This rule-of-thumb comes from Andrew Groove at Intel in his book "Only The Paranoid Survive" and has not been properly verified)

- 3G performance jump is not large enough to justify infrastructure replacement - 3G offers only 3-4 times better spectral efficiency than 2.5G - 3G bandwidth only 2-10 times better than 2.5G - GPRS gives better geographical coverage than 3G - 3G offers better bandwidth but coverage is more important for the consumers - 3G networks not even close to offering the coverage of GPRS - GPRS, a software upgrade on the GSM networks will probably always offer better global coverage than 3G. - WLANs offer better bandwidth than 3G - WLANs are already here with a large installed base on many company lap-tops - It is possible to cover hot-spots and city centers at low cost for WLAN Service Providers - WLAN base stations cost very less - WLAN equipment market is already being adopted at a large scale GPRS together with WLAN is a better solution for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive.

History lesson: Swedish generation shifts in analogue mobile

Analogue NMT 450 ® analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage, pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 ® Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case" it is profitable only in best case scenarios

Financial analysis shows the 3G Business case ROI is very dependent on: - Very high 3G penetration - Op

e change.

The Rule-of-thumb New infrastructure must offer at least 10 times better performance to replace old large installed base (This rule-of-thumb comes from Andrew Groove at Intel in his book "Only The Paranoid Survive" and has not been properly verified)

- 3G performance jump is not large enough to justify infrastructure replacement - 3G offers only 3-4 times better spectral efficiency than 2.5G - 3G bandwidth only 2-10 times better than 2.5G - GPRS gives better geographical coverage than 3G - 3G offers better bandwidth but coverage is more important for the consumers - 3G networks not even close to offering the coverage of GPRS - GPRS, a software upgrade on the GSM networks will probably always offer better global coverage than 3G. - WLANs offer better bandwidth than 3G - WLANs are already here with a large installed base on many company lap-tops - It is possible to cover hot-spots and city centers at low cost for WLAN Service Providers - WLAN base stations cost very less - WLAN equipment market is already being adopted at a large scale GPRS together with WLAN is a better solution for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive.

History lesson: Swedish generation shifts in analogue mobile

Analogue NMT 450 ® analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage, pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 ® Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case" it is profitable only in best case scenarios

Financial analysis shows the 3G Business case ROI is very dependent on: - Very high 3G penetration - Op

n for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive.

History lesson: Swedish generation shifts in analogue mobile

Analogue NMT 450 ® analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage, pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 ® Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case" it is profitable only in best case scenarios

Financial analysis shows the 3G Business case ROI is very dependent on: - Very high 3G penetration - Operator market share - Population density - Being an incumbent

The $ 320 billion 3G investment in Europe is extreme in size - and business risk. GPRS upgrades cost 5 % of 3G

A look at Physical 3G investments in Europe - $150 billion paid for 3G licences + handset subsidies and marketing costs. A very large and high risk investment - GPRS upgrade of 2G networks cost 5% of 3G investment. An alternative with less capacity than 3G but much lower business risk

- 3G network investment (cost/operator) 3 billion $ - GPRS upgrading of a GSM network (cost/operator) 0.1 billion $ (source: Merrill Lynch)

- Upgrade Cost per Subscriber (US$) - W-CDMA 300 - GPRS 10 (source: Morgan Stanley )

After Calculations with all these parameters Pure 3G Business will be short of a break-even in 2010 as 4G arrives. Is the hype about 3G Justified, is it a practical to implement this technology when we know that we will have to go for another total infrastructure makeover when 4G Arrives and all of us know that 4G as a technology will support all wireless technologies, it will have backward compatibility with all previous technologies and the 4G Standard has been thoroughly researched.

The Question to ponder is: Is the Hype about 3G Justified.? Does the Remaining World have to go through the painful Evolution of 3G when we know that a completely different technology i.e. the 4G will also require a total infrastructure makeover and is just a few years away. Would leapfrogging from 2G/2.5G to 4G not make sense? Is 3G Wireless already A Wrecked Paraphernalia