The Challenges -and Potential- of 3G

Currently, increased competition and stagnating economies have helped drive down end-user prices and voice service has become a commodity. While call minutes are increasing, ARPU is failing to keep pace with growing costs and shrinking margins. The 3G business case says that every incremental dollar spent on the network must produce a return on investment almost overnight. In the Asia-Pacific, Pyramid Research says 3G mobile subscribers will jump from 21 million in 2002 to 162 million in 2008.

It is obvious that 2G technology will continue to maintain a certain momentum but will eventually fade off. That’s because 3G is a radically new game with new rules and challenges and only a few vendors will lead in this new market sector. The potential for 3G is huge. Analysts predict that wireless data revenue in the US alone will jump from US$500 million in 2002 to US$24.5 billion in the next 10 years.

I believe the industry is entering a critical stage in the transition from a voice-centric utility to a services-centric business. The packet core already is an integral part of evolving 2.5G and 3G networks. 3G’s other defining element - high-speed access - is what everyone desires, but may need to be delayed based on the local business case. Continue >>