ENGINEER - Vol. XXXX], No. 03, pp.[42 - 55], 2008 © The Institution of Engineers, Sri Lanka
Strategies for Transition to Third Generation Cellular Communication in Sri Lanka
M. R. M. Hazary and A. T. L. K. Samarasinghe
Abstract: The mobile market is currently in the phase of being restructured. The introduction of third generation (3G) networks incurs to high expenditure. These expenses have to be compensated with revenues from successful applications and mobile services, which contribute to a positive Return on Investment (ROI). Researchers' ultimate objective is to understand the user acceptance of 3G services in Sri Lanka and formulation of strategies to make 3G a reality in Sri Lanka. Research findings shows that there is a market i ' acceptance for 3G services in Sri Lanka and the service providers are technically capable of absorbing the technology in to their systems. Further implementation should prioritize on the delivery on benefits to customers rather than clever technology.
Key Words: Third generation (3G) ,Mobile market, restructuring, Return on Investment (ROI),technology, Strategies
1. Introduction operations in late 1980's or early 1990's, but some are still new to the business with regard to the 1.1 Background new technologies. But within few years some operators were able to reach the standard of Economic growth, the pace of technical change, developed country operator's technology. and the element of mobility in modern lifestyles, will continue to drive demand for mobile It is decision time, as many mobile operators must services. Mobile services will grow in number now commit to 3G rollouts and launches. and variety, and will come to include most of that Operators need to beware of simply following is mainly available from fixed access today. In the the launch strategies of others, many of which may year 2001, number of mobile subscribers exceeded have serious consequences. the number of wired subscribers in the world [1]. ' Due to the comparatively low cost of the mobile 1.2 Research Problem communication equipment and the service availability while on the move the digital Research problem specifically is for "strategies for communication is expected to be the most transition to third generation cellular accepted method of communication. communication in Sri Lanka". The mobile market is currently in the phase of restructuring. The The Third Generation (3G) technologies are introduction of the universal mobile turning phones and other devices into telecommunications system (UMTS) network multimedia players, making it possible to was related to high expenditures. These expenses download music and video clips. It uses have to be compensated with revenues from Wideband Code Division Multiple Access (W- successful applications and mobile services, CDMA) technology to transfer data over its which contribute to a positive return on networks. W-CDMA sends data in a digital investment (ROI) in the nearest future. History format over a range of frequencies, which makes reveals many successful and non-successful the data move faster, but also uses more mobile services. On the one hand, mobile services bandwidth than digital voice services. like traffic navigation or videoconference services are still waiting for their economic breakthrough. 3G is considered, high-speed or broadband On the other hand, multiple mobile services like mobile Internet access, and in the future 3G SMS(short message service), ring tone and logo networks are expected to reach speeds having download services can be found, which have not more than 2Mbps. MRMHa-nry, BSc Bug., AIESL, M1EEE, Programme Manager, - Aavs, Network, Dialog Telekom PLC. In Sri Lanka there are five mobile operators. All Eng. ATLK Samarasinghe, BSc Eng., (Morntuwa), M.B.A.(Srij), C.Lng., MIEfSri Lankn), Head of Department, Dept. of Electronic and existing operators started their business Telecommunication, University of Moratniva
ENGINEER 42 fawn I'lfilu Icil to have a strong economic success. (2G) mobile telecommunication system, namely 1 1 U'i unit's obvious that one of the most important the Global System for Mobile communication i H i. >f. Itu I In- success or failure of mobile services (GSM) was introduced. This technology paved the It llu- IIMM ,u i vplance. way to introduce in addition to voice telephony, text messaging and international roaming Ill MI i Ir i In minimi/.e the barriers to success, a services. It also introduced circuit switched data Itllml.mli.il .nul in-depth consideration of the as well. While GSM was widely accepted in 1 1 illi .il I. u I Hi's lor the user acceptance is Europe, Asia, Latin America and Africa, North Hi t r«ti.!l y America came up with its own technology standards for its 2G rollout. These were the Code I t I'lojt'cl Objectives Division Multiple Access (CDMA) based IS-95 and the Time Division Multiple Access (TDMA) based ' 'i-i- 1 IIM-. ul I lu- project are identified by IS-136. Japan also came up with its own 2G 1 •• li'i in) , industry background and research standard, namely the Personal Digital Network I'liil'llMU (PDC) network. Some enhancements were made to compliment GSM later on, namely the General I ii .mni'ss the market acceptance of 3G Packet Radio Service (GPRS) and Enhanced Data «M\ ii «". iii Sri Lanka rates for GSM Evolution (EDGE) to avail Internet Protocol (IP) based packet switched data over GSM I " i.li'iililv best practices for absorption networks. While GPRS was designated as 2.5G, I .ul.ipl.ilion of 3G services EDGE was considered as 2.75G. With the advent \ I ..... «w>s llu- conduciveness of Immediate of 2G networks throughout the world, 1G network I in iinnincnl of Transferor and Transferee ceased to exist [2]. IIM Smooth Transfer of 3G Technology 2.2 Mobile Communication Market 4 I ...... iimmcnd strategies for transition to According to the statistics from International ihinl ( ii'iiri'.ition Cellular Communication Telecommunication Union (ITU) the world in Nil I .ink, i telecommunication market for W-CDMA and 1, I lli'i.iluiv Kcview GSM is depicted below in Figure 1[3]. There has been a clear growth for W-CDMA, in other words lit litlHiilm'tinn to Mobile Communication 3G, from Q2 2006 to Q2 2007. The absolute value I'VllllllluM for the number of subscribers for W-CDMA subscribers is very low as W-CDMA is at I >llnliH mobile communications is an inception level (lowest line). iHllllpiMitiiNt' tool for everyday lives of millions
Hi Jtftiplf rtiomul I he world. Mobile telephony WCDMA and GSM growth-World wide Ml Uiulfl'nont' several evolutionary stages from 3,000,000,000 I l»»t lillltiil perspective. In the beginning, first 2,500,000,000 2,000,000,000 pHttMitllitii (1(J) mobile technologies formed the 1,500,000,000 1,000,000,000 t¥Ailfililf neivnv provider networks. These 500,000,000 0 ||»tl MAilv.iiuvil Mobile Phone System (AMPS) fa • 111 Ami'i u a, Total Access Communication |fc- t'» (I A( S) iii the United Kingdom, and Figure 1:W-CDMA and GSM Growth-World Wide NI Mobile Telephony (NMT) in the Nordic M< 'ie»|f'| In Ihe I irsl generation network, the The Asia Pacific region takes the second highest li* "»»Ml iipplu'iilion was speech. Apart from share of world 3G market as per the Figure 2 Hu« nil ullu'i wrviee was available for its users. below. The Cellular Operators Association of Mill* IttfiUh nysli'in being proprietary, there was India claims that for every one percent increase HH • oliinion iipproach to support roaming in telephone penetration there is a three percent |if' I'll \\ww systems. Subsequently, under the increase in Gross Domestic Product (GDP) [4]. •i.»^' til the European Telecommunications 1 »hU liwtllule (ETS1), the second generation
43 ENGINEER While these strict guidelines might be applicable to regions where PC-based fixed Internet access USA/Canada
2% Africa is already widespread, emerging markets could Middle East ',1% well follow the i-mode model that NTT DoCoMo pioneered in Japan, where fixed Internet penetration is 67 percent, while mobile Internet penetration is over 73 per cent, according to the MIC White Paper 2006.
80,0
70,0
60.0
Figure 2:Regional WCDMA Subscribers-Q2 2007 50.0
40.0 Mobile handsets 2.3 Higher Bandwidth Application Usage 30.0
20,0
ABI Research, forecasts that by 2011 global 10.0 revenues from Over The Air (OTA) downloads 0,0 2004 2005 of full-track music will be US$9.3 billion, a healthy jump from worldwide revenues of Figure 5:Internet Users by Type of Device in Japan US$12.4 million in 2004[5]. Today, over 90 percent of DoCoMo's 52 million
2011i$14.1 billion) users subscribe to its "i-mode" mobile Internet service, and over 60 percent of them access the i ] Ringtones !•! Ringback Tones mobile Internet on a daily basis, with the PC being £3 Full Track the secondary preferred platform. Downloads U Streamed Music 2.4 Sri Lankan Telecommunication Context
Figure 3: Ring Tone Revenue The constant improvement in the country's socio economic well being together with liberalized However, ABI warns that those interested in policies of telecommunication sector in Sri Lanka gaining a share of these revenues will need to be has made the telecommunication market aware of five Pre-requisites. One of the Pre- attractive. Introduction of competition, careful requisites is "A 3G network capable of delivering selection of investors, better policies governing the product." the distribution of service and investments to cover most of the country map has taken the According to a recent survey, 80 percentage of telecommunication service up to rural area. mobile phone users played games at least once a week, while 34 percent indicated they played Table 1 : Subscriber Penetration for Fixed and every day [5]. Cellular Telecom Industry in Sri Lanka
Total number of Fixed phones 2,086,774
Tele-density (Fixed Phones per 1 00 inhabitants) 10.0
« A few times a Number of Cellular Mobile Subscribers 5,958,685 month but not every week Mobile Phones per 100 people 30.0 •I At lean once a week but not every day Total Telephone Subscribers (Fixed & Cellular) 8,045,459 |! Everyday Total Tele-density (Fixed & Cellular) 40.0
Internet & Email Subscribers 150,000
Germany China India Spain Thailand As per the Telecommunication Regulatory Commission of Sri Lanka (TRCSL) statistics Figure 4: Gamming by Region mobile penetration is very high compared to the fixed line.
ENGINEER 44 m GNIp< r Capita, Atlas Method, 2000-5 Currentus$ 1 ,500 - _^n 1,000 - jm— — • MM \*tt 1WM ]>I>H ;>000 2001 2002 2003 2004 200S 2006 2007 Mar Year 2000 2001 2002 2003 2004 2005
1. <. I mil anil Internet Growth 1996-2006 - — #— Sri Lanka —f— Soyth Asia Region A* (U'l \\w IKl'SI, records the subscribers for I ..... in'l ft Ijiiitil is very less counts to 150,000, Figure 8 : Per Capita income compared with South whli It llm'll i ommuiiicates the potential for the Asia region i «
mi I hi' iinttpitrison between fixed and 3 I hilrtt niil'M i il'crs is ,ilso described. The "^=:^*-^— . 4 I itllli itnl uhsri v.ition made from the above |'h In llu1 .i|'ptn\im,Ue exponential growth in nUi mil'M uhrrs in Sri I.anka. The fixed line 2000 2001 2002 2003 2004 2005 tll*iM» tin- saturating, while cellular tlnMh .tic nurtMsing exponentially |6). * Sri Lanka —•— South Asia Region
Figure 9 : Price of Call to US
Even the Sri Lankan national economy is influenced by the mobile telecommunication development. Sri Lankan economy has recorded a growth since year 2001 as shown in Figure 10. The main driving force behind this growth is the growth in service sector in Sri Lanka.As in the previous 4 years, growth in 2005 was driven by V».n that part of the services sector not related to tourism (i.e, import-related trade, mobile is 1 • t'lM>il niiihllr prni'tration - Sri Lanka telephony, and financial services) [7]. The telecom sector is the largest in terms of Foreign Direct idiiH11«|MII ol time GSM (GlobalSystem Investment (FDI) and moreover the sector has !'lli< i onmiimif.itions) technology has made over 20 percent contributions to GDP oi Important role, and it has surpassed growth since 2001 and made up 6.6 percent of il l*t|i>|i!ninv subscribers in end of year total economic growth in Sri Lanka in 2005 [8]. <| I lu1 wii|iporting factors for the tit mobile subscribers would _ aw • Agriculture In (in t.ipita income as illustrated 8 iiiul '' Ix'low and the drop in call A piTioil of time (International ' iJIftllltK .nid Local) due to the fierce Mlliin rtiul lllicr.ili/ation of monopoly with M InU'itiin (SI,I) on International Direct
MM ta 03 04 OS Figure 10: Contribution to GDP Growth-Sri Lanka
45 ENGINEER With the major milestones of the rural hospitals to conduct surgeries whilst telecommunications industry in Sri Lanka, some distance learning centers could be set up in mobile operators in Sri Lanka have implemented remote villages and connected to educational new technologies and applications first time in institutes/universities via video telephony South Asia. One classic example is implementing and broadband technologies. Use of 3G as GPRS network first time in South-Asia by a Sri an enabler to provide E-Government Services Lankan mobile operator- Dialog Telekom Ltd. and thereby cut down on travel time and Another example is trial launch of a 3G mobile costs of the Sri Lankan public [6] technology by the same company for the first time in South-Asia. Other than major technologies, local operators have contributed to major 2.6 Acceptance Model for the Analysis and advancement of the mobile applications industry. Evaluation of Mobile Services
The user acceptance is more and more regarded 2.5 Benefits of 3G to Sri Lanka as a critical success factor for mobile services. According to the frame work developed for user Consumer Perspective acceptance, Michael Amberg, Markus Hirschmeier and Jens Wehrmann (2004) [9]. Even though it may seem that direct benefits of Compass Acceptance Model (CAM) helps to 3G would flow to the top end of the market, a verify the perception concerning user acceptance careful evaluation shows that majority of the or to understand the user (types of users and existing and potential consumers would benefit behavior patterns) and the implication of service from 3G. Some of such benefits are listed below; design better. The insights assist in considering
rd explicitly the user acceptance in the design of a a. 3 Generation services involve Multi Media mobile service. Most acceptance models Communication (Voice, Picture, and Text) concentrate on some aspects of user acceptance and this would help to enhance the quality and provide a detailed analysis structure for these of communication, commercial efficacy and aspects. An analysis is very time-consuming and standard of living of the Sri Lankan the in-depth results are not adequate to improve consumer. application design. The existing models were also not designed to integrate the acceptance analysis b. Sri Lanka is lagging behind in regional and evaluations into an overall methodical benchmarks in terms on internet penetration approach for the development of services. mainly due to poor Personal Computer (PC) COMPASS (COoperation Model for Personalized penetration and high cost associated with And Situation dependent Services) is a telecommunications services required for methodological approach that specifies a internet connectivity. conceptual framework and the fundamental National I Industry Perspective requirements for a service platform to cooperatively develop and provide situation Following benefits would accrue to the country dependent mobile services. This approach pays as a result of proposed Implementation of 3G attention to the special market situation and services in Sri Lanka. considers legal, economical and technical conditions, which are relevant for developing and a. 3G licensing will attract FDI to the country. providing mobile services. Such specialized 3G will facilitate network expansion and approaches may affect productivity and service growth in telecom penetration. Increased quality positively and finally lead to higher usage penetration & excellent communications intensity of mobile services and increase the infrastructure would help attract new revenue of service providers and mobile network investments to the country. operators.
b. Deployment of 3G would help to enhance The Compass Acceptance Model Public Infrastructure and standard of Living of Sri Lankarts. For example Video Calling The Compass Acceptance Model is an instrument would enable use of TELE MEDICINE by designed for the analysis and evaluation of the
ENGINEER 46 • i'i »>"• "i mobile services. The Meta using a particular service would be free of effort. > (hju'H' 11) of I hi1 Compass Acceptance In this context, the ease of use can be interpreted lulu ol Hie complementary and as an effort for the use of a service. Indicators mil M! (itli'c.oiu-s Hem-fits and Efforts and measuring this dimension are for example the nh ,t'iii'itil ( oinlitions of.Services: ease of configuration or first log-in, overall handling and menu navigation. H. nf IIU >thil I Moils: Which include all positive • ii> I'.i'.pi't Is lor the user acceptance. The (Perceived) Mobility: The categories Benefits and ^••pfl/.iliMn in /i(V/c/;>s and Efforts is confirmed General Conditions of Services lead to the dimension III IIMIU moilt'ls for user acceptance as a of Perceived Mobility. The consideration of the 1 -til-il to>',nilivi' consideration in human general conditions of a service is important in the iilitn IIIIM i",st-s. context of mobile services as their acceptance highly depends on the economical, social and *i>t Vlt* anil < tciirral Conditions of Services: The technological perspectives. Indicators measuring Int I »|n't ilic .ispects of user acceptance are this dimension might be network coverage, itiliMiiui'il 111 Ilu- category Service. In the accessibility, technological infrastructure etc. cl'-mrnl.ily category Genera! Conditions of ill surrounding social, cultural, (Perceived) Costs: This dimension is formed by pi iiiiniiUc.il .'md technical conditions are the categories of Efforts and Genera! Conditions of HIM*hit11 t'd, which also play an important role for Services. Mobile services can lead to profound H" HM>i .icct'ptance of a service. changes in technological and social systems causing monetary and non-monetary costs. Costs transparency, data security and health risks are considered as appropriate indicators. These four
Perceived Perceived dimensions focus on the subjective perception. Usefulness EassofUss This emphasizes the valuation of a service by tin- end user's subjective point of view.
Researchers have adopted all four variable of Perceived Compass Acceptance model namely[9]; MobiOily a. Perceived Usefulness b. Perceived Ease of Use Hguit- 11 : Dimensions of the Compass c. Perceived Mobility and Acceptance Model d. Perceived Costs
I lif.c i '.ill-Tories lead to four dimensions that are Researchers are strongly agreeing with the relevant for an in-depth analysis of user Compass acceptance model and have added two •eetptance: more variables to make the framework more acceptable, in Sri Lankan context. 1'i-n rivi'ti Usefulness, Perceived Ease of Use, Perceived Mobility and Perceived Costs Customer attitude: There are some characteristics that are specific to the Nation, values, which will (IVrccived) Usefulness: The dimension build by decide the success or failure of certain changes Hit1 categories Benefits and Service describes the to the society. Customer attitude towards change (n-rci-ived usefulness of a service. Indicators is one such criteria and researchers have nii'.isuring this dimension might be perceived investigated into the variable from the point of Information quality and quantity or conformity view of willingness to change, learn and ol expectations. experience new services. (Perceived) Ease of Use: The dimension Income level: Similarly, the income level is also ilur.iderized by the categories of Service and another important dimension for the developing / //or/.s' can be identified with the perceived ease countries. The Compass acceptance model was i il use, (he degree to which a person believes that developed in the European region and the
47 ENGINEER developers might of least concern about the first sub objective, Market acceptance of 3G income level of the potential end users. From Sri services, following variables were applied; Lankan context the income level and expenditure pattern are equally important when a new a) Perceived Usefulness product or service is introduced to the market. b) Perceived Ease of Use c) Perceived Mobility 3. Conceptual Framework d) Perceived Costs e) Customer attitude The research methodology that best supports this f) Income level. study is, perhaps obviously, opinion research. This is accomplished by asking them via Explanation of the Compass Acceptance Model questionnaires. This research has used opinion is discussed in literature review. poll based survey in order to collect primary data for the study. User questionnaire was used to To the second and third sub objectives, a collect primary data from a random sample of questionnaire is circulated with 3G project mobile users. This user level questionnaire was managers. The variables for the above objective focused only on market acceptance of 3G mobile were identified as follows; services. The questionnaire designed "To identify best practices for absorption and adaptation of a) Financial 3G services" and "To assess the conduciveness b) Marketing of Immediate Environment of Transferor and c) Regulatory Transferee for Smooth Transfer of 3G Technology d) Technology "was distributed among the 3G project managers. e) Project Implementation In summary following methodologies were used to achieve the research objectives. Amalgamation of results of first three objectives Sub objective 1 -"Market acceptance of 3G will lead to the achievement of main objective of services" - is achieved through a questionnaire the research, "To Recommend Strategies for survey. Transition to Third Generation Cellular Communication in Sri Lanka". Sub objective 2 ~ "To identify best practices for absorption and adaptation of 3G services" - is Objective 3 achieved through questionnaire survey with 3G Conduciveness of Project Managers and interview with 3G project Immediate Environment of managers. Objective 3 Objective 3 Best Practices for Sub objective 3 ~ "To assess the conduciveness Absorption and of Immediate Environment of Transferor and Adaptation of 3G Transferee for Smooth Transfer of 3G
Technology- is achieved through questionnaire Strategies for Transition to Third survey with 3G Project Managers Generation Cellular Communication in Sri Lanka Main objective ~ is achieved through amalgamating the three sub objectives. Figure 12 : Conceptual Model
3.1 Research Model Researchers have developed a conceptual model described in Figure 12, to achieve objectives of The conceptual model for the research was the research. developed to achieve the research objectives. Part of the model is derived from "Compass 3.2 Sources of Data Acceptance Model". Compass Acceptance Model is designed for the analysis and evaluation of user Data collection for this research take place with acceptance of mobile services. Compass two questionnaires prepared for the mobile Acceptance Model is used mainly to identify the phone users in Sri Lanka and 3G project managers. variables related to the market acceptance. To the
ENGINEER 48 • I ...... I ilif. irMMi-ch for the first Knowledge of mobile users for high end services • .ill Ilir mobile plione users in Sri is very limited. Sri Lankan market is very widely 1 1" H line -Minph1 is selected randomly. used for basic telecommunication services and I'M •iliiiiin, lires were distributed via found difficulty in filling the questionnaire. ••I I'linlril lorm.it. Random sampling ii" rli'i I '..iinplc's for the survey. More The user questionnaire was distributed among 1 i|iu'Mionn.iires were distributed among more than 500 users, but final feedback was only ill I'li'im- users via both distribution 212. I I ii. I i n|>irs were distributed among In !(• ml-. IIH llu- survey and responded Although literature review provides many ih KM i, MICS vvi'rc1 collected individually. The factors that are affecting the market acceptance "i limn Inr ihc second objective of the of 3G services and best practices for absorption Mih r. Ihc 3( ; project managers from and adaptation of 3G services, only the most . -111111111 IK .il ion equipment vendors, Namely, important factors were considered in the analysis 1 mi lluawei , Alcatel and for Sri Lankan context. i. i- i iimiiimiii .ilion service provider, Dialog I, I, I inn I'LC. Researcher has prepared questionnaires in all three languages. The translation of technical -iinl.iry d.U.i sources were also used to get words from English to Tamil and Sinhala was a ii I- * .ml il.il.i for this research. For secondary data limitation. For the words that are difficult to ..... n NOUITCS such as reports and some translate researchers have applied the English I'lil'lk'dllons.ireusedon the chapter 2- literature words. Understandability of the translated words »i'i lion, On this most of global information was and English words is limitation to the research. Hitllirird llmmgh the Internet sources. 4. Survey Data Analysis 1,1 Limitations of the Study 4.1 SubObjectivel I hi-ir ,ur lew limitations that can be identified in .11 Inrving the objective of this research "To assess the market acceptance of 3G services i rojtct, in Sri Lanka". Researcher has used SPSS tool to carry out the data analysis. All the responses were I >i 1 1 ii 1 1 1 1 v on gathering information as the Mobile given weightings as mentioned below for ni'doi is having competitive information. The analysis. Below weighting is used to calculate the iniii.il research methodology for the second mean values. ulijci live, "To identify best practices for iiliMirplion and adaptation of 3G services", was 4 - User strongly agree with the statement through case study method and due to lack 3 - User agrees with the statement llliTulure available the research methodology 2 - User partly agree with the statement changed to questionnaire based method. 1 - User disagree with the statement
Nnn .wnilability of comprehensive literature on Table 2: Mean Value for Market Acceptance llii-. lopic for Sri Lanka, as 3G technology is very of 3G Services lU'W to the island. Literature survey was done in International context, due to lack of local facts. Mean Priority Weightings Values I'lirlhiT, the importance of factors in Sri Lankan Market Acceptance point of view may be different to that of global. of 3G Services 1 Perceived As mentioned earlier, the amount of literature 2.9975 1 0.29 .iViiilable is very minimal in local for this field of Usefulness 2 Perceived Ease 3.2720 4 0.14 study. Though some research papers were of Use iiviiilable on the Internet, they are only available 3 Perceived 2.3296 6 0.05 ,il .1 cost. Mobility 4 Perceived Costs 2.2579 2 0.24 5 Customer 2.8922 3 0.19 attitude 6 Income Level 1.4652 5 0.10
I 49 ENGINEER These six variables will jointly build the "Market c. Payback period for 3G investment Acceptance of 3G Services". Contribution of each variable (weightings) was decided by an Industry 1. 3G investment should be planned with expert from Dialog Telekom PLC. According to 5 year payback period due to high the expert view order of priority and weighting license cost for each variables are as depicted in the Table 2. 4.2.2 Project Implementation The weighted average mean for "Market Acceptance of 3G Services" is 2.6628. Therefore a. Best practices to accelerate time-to-market it can be concluded that the Market acceptance (Bypass the learning curve and speed up ability of 3G services in Sri Lanka is at Moderate level. to generate revenue)
4.2 Sub Objective 2 1. Outsource Implementation of 3G network to expedite network "To identify best practices for absorption and development. adaptation of 3G services" 2. Managed services for 3G networks from Based on the questionnaire and interview with 6 months to 1 year period. Managed industry expert following best practices were services is where complete development identified in following areas. and management of the network is contracted to the vendor with Service 4.2.1Finance Level Agreements (SLA) a. Minimize cost of ownership (Maximize 3. On the job and off the training of returns with minimal investments) technical and customer care staff while the network is being implemented 1. Common core network (Switching network) for 2G and 3G for packet and 4. Hosted models for Value Added voice Services (VAS). Hosted model is where the server or the system that provides 2. More efficient Spectrum usage as large the VAS is located in within the sum of money spent on 3G license premises of service developer or another service provider, locally or 3. Increase usage by changing the visage internationally. pattern b. Best project management practices-Specific 4. Price 3G voice calls at a lower price than to3G 2G and thereby inducing the subscriber to experience other services available in 1. New technology managemenl principle 3G network. This will result in increase need to be integrated to Project Average Revenue Per User(ARPU) management practices.
5. Provide a common platform to integrate 2. Interworking with multi vendor all new services (future proof) arrangement need lo he given high priority 6. 3G technology should be built on IP MPLS (Multi Protocol Label Switching) c. Recommended procurement method/ plat form to save transmission process.
b. Minimize costs of technology deployment 1. Most recommended procurement method would be lo implement lew 1. Implement soft switches to save power, pilot networks with selei led vendors space and implementation time and move towards the norm.il i omp.my accepted procurement pma'duros and 2. IP backbone to increase the bandwith policies efficiency.
ENGINEER 50 4.2.3 Marketing b. Best practices for service development with 3G a. Best practices to Sustain competitive advantage with 3G 1. The best practice for new service development is to outsource as most of 1. Pricing for 3G services should be the operators does not have the core competitive as Sri Lankan market is competence on the service development price sensitive. 4.2.5 Regulatory 2. Pricing for data services should be same 2G and 3G network as subscriber does a. Best practices to overcome the pricing not see the service difference other than and coverage controls imposed by regulatory data rate. 1. In Sri Lankan context the coverage 3. Portfolio of VAS, video, high speed data controls imposed by TRCSL is to cover and contents should available to attract three main cities in the country. the market. Whereas some other countries have imposed country wide coverage. Hence 4. Good customer service and specially in Sri Lanka 3G service providers are trained staff to support 3G related more or less relaxed from coverage services controls.
5. Marketing activities to educate 2. There is no specific price controls customers imposed by TRCSL.
6. Seamless migration process for 4.3 Sub Objective 3 subscriber to move to 3G services. "To assess the conduciveness of Immediate b. Target market Environment of Transferor and Transferee for Smooth Transfer of 3G Technology" 1. Target market at the initial stage is Enterprise users , high-end customers Table 3: Mean Value for Conduciveness of and Small and Medium Enterprises Environment of Transferor and Transferee 2. Youth segment can be targeted once more content and VAS are developed Mean Priority Weightings Values 2 4.2.4 Technology 1 Knowledge and 2.5600 0.26 capability of Vendors a. Best practice in terms of technology and 2 Knowledge and 3.1700 3 0.24 infrastructure for 3G capability of local staff 3 Experience of 3.5000 1 0.27 1. Transmission backbone should be service providers developed with IP MPLS capability to in the industry gain bandwidth efficiency 4 Infrastructure 2.3300 4 0.23 Flexibility 2. The network nodes that should be procured should be supporting 3rd Four variables depicted in Table 3 will jointly build Generation Partnership Project (3GPP) the "conduciveness of Immediate Environment of R5 or above with radio network with Transferor and Transferee for Smooth Transfer of High Speed Packet Access (HSPA) 3G Technology". Contribution of each variable capability (weightings) was decided by an Industry expert from Dialog Telekom PLC. According to the expert view, order of priority and weighting for each variable are as depicted in the Table 3.The weighted average mean for "conduciveness of
51 ENGINEER II Immediate Environment of Transferor and negative belief on charges on data services will Transferee for Smooth Transfer of 3G Technology" get further strengthen, if the charging method is is 2.9073. Therefore it can be concluded that the not transparent to the customers and reasonable conduciveness of immediate environment of consideration is not given. As the data rates are transferor and transferor in Sri Lanka is at a better higher in 3G, service providers could implement level. low price high volume pricing strategy for data services. This pricing strategy will create a win- 5. Strategies for Transition to Third win situation as number of internet users is Generation Cellular increasing in Sri Lanka (As per the literature Communication in Sri Lanka review). Also the 3G voice calls could be charged at equal or lower price than 2G to attract more 5.1 Corporate Strategy customers to 3G network.
The decision to implement 3G services could be Portfolio of VAS, Video, high speed data and identified as corporate strategy for the company. contents should be available to attract the market The revenue made from 3G services will assist and the best practice for new service the organization to bridge the strategic gap, from development is to outsource as most of the a long term perspective. operators does not have the core competence on the service development. The service providers Investment on 3G will pave the path to new should search for creative VAS developers in business avenues and thereby adding value to local and international market and to deliver fast the company. For example Mobile TV broad hosted services could be launched. casting. 64 percent of mobile users do not have handsets When the mobile service provider is making which support 3G. At the same time 88 percent strategic shift in to new business areas with 3G of the mobile users in Sri Lankans are with the technology the core competence in that business opinion that 3G handsels are expensive. 3G area might be lacking. Hence the strategy is to service providers in collaboration or individually make strategic partnerships or acquisitions. should introduce 3G handsets at a reasonable price to Sri Lankan market. 5.2 Marketing Strategy Interview with project managers reveals; Survey reveals that; Good customer service with specially trained Market acceptance for 3G services in Sri Lanka staff to support 3G related services is essential. is at moderate level. At the same time 3G Service providers should focus on developing awareness among the Sri Lankan mobile users is highly trained staff dedicated for 3G customer at the level of 67 percent. An effective advertising support and the customer service centre should awareness campaign should be launched to be placed in location with more convenient access create the need for 3G services for prospective and attractive. Also the customer service centre corporate and non corporate customers. The should be a sophisticated high tech show room advertisement and promotions should have where customers can experience and feel 3G following features. services. a. Creating the need for 3G among mobile Target market at the initial stage is Enterprise users users, high-end customers and Small and b. Creating awareness on 3G services. It should Medium Enterprises. Youth segment can be explain the services and educate the targeted once more content and VASs are prospective 3G subscribers on how to use developed. Hence existing corporate customers the services. can be targeted by the service providers at the initial stage and then move to attract the youth 73.7 percent of the mobile users believe that the segment once the fair number of VASs are charges imposed by the operators for VAS is high. developed. As the focus of 3G is more on data services the
ENGINEER 52 11 •. 11 M less migration process for subscriber to move To outsource implementation of 3G network to lo .1C; services as an important factor. The service expedite network development. The service providers should find ways to minimize effort providers could outsource the network taken by the customer to migrate from 2G to 3G. development to equipment vendors as they are much aware of their equipments and also they 5.3 Technology Strategy know better how to integrate their systems to other network elements. Further options such as Survey reveals; managed services with agreed SLAs for a period of six month to one year is recommended. 82 percent of the mobile users in Sri Lanka believe 3G will add value to the life. At the same time On the job and off the training of technical staff 86.5 percentages of the mobile users are concern are required while the network is being on data security when using mobile applications implemented. Proper technology transfer should and 95 percent of the mobile users believe that take place in order to manage the 3G network user friendliness of services is of most important after implementation. Hence the service for them to use new services. Following features providers at the stage of negotiation should pay need to be given high priority when developing more attention on knowledge transfer process new services or applications to increase the and should specify the required training probability of success. programs.
a. User friendliness Interworking with multi vendor arrangement b. Data security need to be given high priority. The providers c. Value for money should give more weight to the interworking criteria during technical evaluation of solution proposed by each vendor. They should Transmission backbone should be developed with investigate in to number of interworking IP MPLS capability to gain bandwidth efficiency. successfully carried out in real networks and lab 3G service provider could initially lease IP MPLS testing results. network from existing telecommunication infrastructure business companies. But they Most recommended procurement method would should make sure that they are developing their be to implement few pilot networks with selected own network as the medium to long term strategy. vendors and select based on performance. Service
rd providers could mitigate the risk of selecting the The network nodes should be supporting 3 wrong vendor by implementing a Proof of Generation Partnership Project (3GPP) R5 or Concept (POC) before launching the commercial above with radio network with High Speed network. POC should be carried out with few Packet Access (HSPA) capability. Service selected vendors and need to carry out a detail providers should give more emphasis on the technical analysis on successful completion of version release of the equipments that they are project. And this networks need to be procuring. Also they should be very concern on benchmarked against commercially available the road map of Research and Development of networks globally. vendors, with time lines, to be ahead of leadership in the market. New technology management principles need to be integrated to project management practices. The best practice for new service development is The project managers selected for 3G project to outsource as most of the operators does not should have fair knowledge on 3G technology have the core competence on the service or project manager should be given sufficient development. When selecting service developers training on technology to handle the project. more priority should be given on capability on developing services with User friendliness, Data security and Value for money.
53 ENGINEER 5.4 Investment Strategy Conduciveness of immediate environment of transferor and transferee in Sri Lanka is at better Common core network (Switching network) level. Hence Sri Lankan mobile service providers should be used for 2G and 3G. Service providers are technically in a better position to absorb the could increase their ROIs and make use of the technology. resources available to optimum level by adopting common for core 2G and 3G. 3G for Sri Lanka is best suited at this time to reduce the digital divide and to use as a tool to Large sum of money spent on 3G license. Service fill the strategic gap by service providers. The best providers should take more concern on usage of practices were derived from industry experts (3G spectrum to the optimum level. This could be project Managers) and these guidelines could be achieved by careful selection of geographical practiced by any of the mobile service provider areas where prospective 3G users are densely in Sri Lanka as well as international operators. populated. The strategies were formulated based on the survey results and interview with industry Survey reveals that a very low percentage of experts .The strategies were developed from four mobile users (13.4 percent) are satisfied with 56 perspectives; Kbps. 23.9 percentage of mobile users are requiring 512 Kbps while 22.4 percentage mobile a. Corporate Strategy users are with very high expectation of 2Mbps b. Marketing Strategy data rate requirement. Hence, the service providers could customize data rate according c. Technology Strategy to the customer requirement rather than d. Investment Strategy providing a flat rate to all the customers.This way investors could make maximum use out their 6.2 Recommendations investment. Though the strategies are listed with four Implementation soft switches will save power, perspectives, during the implementation phase space and implementation time. By procuring all four categories of strategies need to be soft switches service providers could maintain integrated as strategies listed are linked to each the system at lower cost. other.
6. Conclusions and Recommendations A strategic partner for network implementation is essential for the delivery of reliable network 6.1 Conclusions on time. Following factors need to be considered This research has been carried out with the in selecting the vendor [10]. intention of finding the strategies to successful a. Long-term support for lifecycle implementation 3G cellular communication cooperation and continues innovation projects in Sri Lanka. Selected population for the study is mobile users in Sri Lanka and 3G project b. Flexible customization with cost managers. efficiency
Market acceptance of 3G services in Sri Lanka is c. Execute and finish strategy on time at moderate level. But this condition will change over period of time with demand for bandwidth d. Decrease the risk of system integration hungry application. There is positive growth in internet users and this will have positive impact e. Successful experience sharing to reduce on demand for 3G services. the business risk
New product or service will succeed or fail Project management is crucial in depending on the customer experience. It is what telecommunication business to be in the market they feel or think matters. The implementation leader position. A dedicated project management should prioritize the delivery of benefit rather than team should be formulated to deliver the scope of clever technology. the 3G project on time.
ENGINEER 54 A Study from National Technical University of Allu-iis reveals that following migration path is suited for 3G service migration.
Slep 1 - Common backbone network Step 2 - Some voice and more data Step 3 - Everything over data
Craig Scollick, Cerillion Technologies Implementation director recommends that once the ideal 3G products have been designed, building blocks needed to bill these correctly must be properly defined. Working closely with the billing system supplier is a key in making this a success
References: [l]http://www.gsmworld.com Visited 10th June 2007
[2] Chen, J. C., Zhang, T., IP-Based Next- Generation Wireless Networks: Systems, Architectures and Protocol, John Wiley and Sons, Inc., 2004, p.413.
[3] http://www.itu.int 2006 Visited 20th May 2007
[4] www.simonwoodside.com Visited 20th May 2007
[5] "Paul Rasmussen.."What's in a Name". Mobile Frontiers, Feb/Mar 2005,lssue 4
[6] http://www.trc.gov.lk Visited 20th June
[7] www.adb.org Visited 10th May 2007
[8] Daily Mirror ."Deriving socio-economic dividends from mobile communications"., 30th September 2007
|y] Markus Hirschmeier and Jens Wehrmann" The Compass Acceptance Model for the Analysis and Evaluation of Mobile Services" International Journal of Mobile Communications,2004, Vol. 2, No.3 p, 248-259
[1()| vvww.lui.iwc'i.com visited 19th July 2007
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