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].