SOUTH AFRICA BY J.S.M. van Wyk Study leader: P.A. Geldenhuys Submitted in partial fulfilment of the requirements Of the Potchefstroom Business School at The Potchefstroom University for Christian Higher Education ABBREVIATED INDEX ........................................ Error! Bookmark not defined . INDEX ............................................................................................................................ i INDEX OF FIGURES ................................................................................................ iv INDEX OF TABLES ................................................................................................... v 1 Introduction.......................................................................................................... 6 1.1 Problem. Statement ......................................................................................... 6 1.2 Objectwe ........................................................................................................9 1.3 Scope ..............................................................................................................9 1.4 Research Methodology .............................................................................10 1.5 Overview of study ......................................................................................11 2 Brief History of Communication ...................................................................... 12 2.1 Brief History of Communication until Radio Communications ..................12 2.2 The Beginning of Radio Communication Systems...................................... 13 2.3 Conclusion ...................................................................................................16 3 Second Generation Technology (2G) ............................................................... 17 3.1 Introduction .............................................................................................17 3.2 History of GSM .....................................................................................17 3.3 Major Successes of the GSM technology ....................................................24 3.3.1 The Story of SMS ................................................................................24 3.3.2 Prepaid Mobile Packages ....................................................................26 3.4 Summary of GSM History and Successes ...................................................29 4 Further developments in GSM .........................................................................30 4.1 Introduction............................................................................................. 30 4.2 GSM Data ....................................................................................................32 4.3 HSCSD .........................................................................................................32 4.4 GPRS......................................................................................................... 32 4.5 EDGE ...........................................................................................................33 4.6 Summary of further developments in GSM .................................................34 5 Third Generation Technology (36) -Evolution from 26to 36................... 35 5.1 Introduction ..................................................................................................35 5.2 History of 3G ...............................................................................................37 5.2.1 Introduction ......................................................................................37 5.2.2 IMT-2000 .........................................................................................38 5.3 Current Status of 3G ....................................................................................44 6 36Viability and Adoption Success .................................................................. 49 6.1 Introduction ..................................................................................................49 6.2 3G Launch and Adoption Delays .................................................................50 6.2.1 Overview .........................................................................................50 6.2.2 3G Licence Costs .................................................................................50 6.2.3 Economic Slumps ................................................................................53 6.2.4 3G Technology Realisation Costs ........................................................55 6.2.5 Handset Problems ................................................................................56 6.2.6 Spectrum Issues ...................................................................................57 6.2.7 Competing Technologies .....................................................................58 6.2.8 .Summary . Of 3G Launch Delays ......................................................59 6.3 Reallsing 3G Adoption ................................................................................60 6.3.1 Overview ...........................................................................................60 Page i of 178 6.3.2 Hunting The Killer Application Or Service......................................... f3 6.4 Learning Lessons from GSM .......................................................................66 6.4.1 Overview .........................................................................................66 6.4.2 Cooperation Breeds Success ................................................................66 6.4.3 Equipment Development, Manufacturing And Rollout .......................67 6.4.4 Subscriber Acquisition Cost ................................................................68 6.4.5 Customer Needs Satisfaction ...............................................................69 6.4.6 GSM's Killer Application ....................................................................69 6.4.7 Expectations And Promises .................................................................71 6.4.8 Telecommunications Sector Understanding ........................................74 6.4.9 Summary Of GSM Education ............................................................76 6.5 3G Business Models ....................................................................................78 6.5.1 Overview ...........................................................................................78 6.5.2 Network Operator Centric Model ........................................................80 6.5.3 Content Aggregator Centric Business Model ......................................80 6.5.4 Content Provider Centric Business Model ...........................................81 6.5.5 General Business Model ......................................................................81 6.5.6 Summary of 3G Business Models........................................................ 82 6.6 3G Service Pricing .......................................................................................84 6.6.1 Overview ..........................................................................................84 6.6.2 Components offered by Suppliers........................................................ 85 6.6.3 View from the UMTS FORUM on 3G Service Pricing ......................86 6.6.4 Summary of 3G Service Pricing ..........................................................93 6.7 Social Shaping of the 3G Customer .............................................................94 6.7.1 Overview ............................................................................................. 94 6.7.2 Social Connectivity ..............................................................................95 6.7.3 Emotion And Mobiles ..........................................................................95 6.7.4 Public And Private ...............................................................................96 6.7.5 Summary of Social Shaping of the 3G Customer ................................99 6.8 Summary of 3G Viability and Adoption Success ......................................100 7 Investigation into the Viability of 3g Adoption in Africa and More Specifically, South Africa ........................................................................................ 101 7.1 Introduction ................................................................................................101 7.2 South African Mobile Market ................................................................101 7.2.1 Overview ............................................................................................101 7.2.2 History of GSM in South Africa ........................................................101 7.2.3 Frequency Spectrum ......................................................................103 7.2.4 Subscriber and Market Analysis ......................................................104 7.2.5 Reasons for Success ...........................................................................106 7.2.6 Teledensity in Africa ..........................................................................107 7.2.7 Summary of South African Mobile Market .......................................109 7.3 The Vision for 3G Adoption In Developing Countries Such As South Africa 110 7.3.1 Overview ........................................................................................110 7.3.2 Identification Of Different Needs For Different