A TERM PAPER ON GSM APPLICATIONS IN SMALL AND MEDIUM SCALE INDUSTRIES BY ADEWUMI TOBILOBA BABATUNDE ACU/369 COMPUTER SCIENCE, AJAYI CROWTHER UNIVERSITY, OYO. Page 1 of 39 TABLE OF CONTENTS 1. Introduction…………………………………………………………………….3 2. GSM………………………………………………………………………………..6 2.1. History………………………………………………………………………..6 2.2. Cellular Radio Network……………………………………………….7 2.3. GSM Carrier Frequencies…………………………………………….8 2.4. Voice Codec’s……………………………………………………………..9 2.5. Network Structure………………………………………………………9 2.6. Subscriber Identity Module (SIM)……………………………….9 2.7. Phone Locking (SIM Lock)………………………………………..…10 2.8. GSM Security Service………………………………………………….10 3. 3G…………………………………………………………………………..........12 3.1 Overview……………………………………………………………….....12 3.2 History…………………………………………………………….………..12 3.3 Security…………………………………………………….……………….15 3.4 Applications……………………………………………………………….15 4. SMS………………………………………………………………………….…….17 4.1 History………………………………………………………….……………17 4.2 Early Development………………………………….…………………18 4.3 Support in other architectures……………………………………20 4.4 Early Implementations……………………..………………………..20 4.5 Technical Details………………………………..…………..….........21 4.5.1 GSM…………………………………………………..…………………….21 4.5.2 Message Size…………………………………………………………...22 4.5.3 SMS Gateway Providers……………………………………………23 4.6 Interconnectivity with other networks…………………………23 5. Impact of Telecommunications on Economic growth in developing countries…………………………………………………………….25 5.1 Mobiles in LAC at a glance………………………………………….26 5.2 International Experiences…………………………………………..28 5.3 Infrastructure……………………………………………………………...32 Page 2 of 39 5.3.1 Market Opportunities………………………………………………..34 5.3.2 Growth Strategies………………………………………………………34 5.3.3 Firms………………………………………………………………………….36 6. Conclusion and References……………………………………………….37 Page 3 of 39 1. Introduction Small and medium scale industries (hereafter Industries) are companies/enterprise that are often a small or medium sized industry often family run companies or by group of individuals. It is argued that the diffusion of GSM is changing the way companies compete, their business models, and their value-adding processes and services. New opportunities are arising, affecting the creation of new firms and affecting business processes and services which rely even more on information and knowledge. These evolving processes are due to GSMs capability to connect, to receive and to send amounts of information and to reduce space and time barriers in the business. Hence, firms seek to reduce transaction costs of information-intensive activities by resorting to modern ICTs, such as, to name a few, fixed and mobile telecommunications, Internet, Ecommerce, Electronic Data Interchange-EDI, Enterprise Resource Planning Systems-ERP and so forth. These opportunities may specially favour at differing levels and scale – small and medium-size industries (hereafter SMIs) that in many cases operate in a dense network of inter-firm relationships and, consequently, manage a great amount of information. It is already acknowledged that up until now there has been no cut and dry positive linkage between ICT in general and an increase in trend growth in most countries. In addition, as yet, there is also no clear cut way to explain penetration rate of GSM, across a diverse range of countries, beyond changes in regulatory regime as a triggering event. Traditional socio-economic markers such as GDP growth rate, GDP per capital as well as other socio-economic and geographic factors usually fall short of accounting for different penetration rates of mobile telecom, although some exhibit a strong correlation, e.g. income per capital. A significant amount of research and international studies have been confirming that the production, utilization and the productivity associated to GSMs have been, although not entirely, among the most important factors behind the improved economic performance of many industrialized countries in the 1990s, more particularly the United States. In the past decade, the pace of technological change led by GSM developments quickened and the structure Page 4 of 39 of developed economies and of a few developing ones, migrated towards services; the previously quasi-automatic employment effects of economic growth were greatly damped and their transmission mechanisms became more complex. Globalization induced enhanced international competition and factor mobility further compounded the employment challenge for developing countries. On the one hand, growth in manufactured trade and in the national service economies has opened up new opportunities of growth for (formal) SMIs, the poor which reside in rural areas, are mostly illiterate, self-employed and unskilled rural labourers or subsistence farmers, often speaking a minority language. On the other, informal SMIs which constitute the majority of establishments in countries with significant poor population, have seen their income and their revenue growth prospects further impaired by these trends, suggesting that the lives of a significant part of their population have not yet been touched by the innovations and progress brought about by modern information and communication technologies (hereafter ICT). This is the case of many countries in Latin America and the Caribbean (hereafter LAC) where, in the past, institutional, socio-political and (macro) economic factors, although not homogenously for each country, have in part contributed to such backwardness. Nevertheless, there seems to be positive growth effects related to the roll-out of discrete ICT technologies such as telecommunications, both fixed and mobile, with the latter exhibiting some convergence between countries and smaller differences within countries. Yet, as the mixed results of previous studies on the impact of fixed telecommunications on the poor show, it may still be too early to establish the social impact of mobile telephony on poverty alleviation and, more particularly, to fostering entrepreneurship, promoting the social inclusion of marginalized informal firms and workers, and enhancing the sustainability of competitiveness of formal SMIs. Studies found that the impact of telecom penetration rates is enhanced at near universal services, that there is a critical mass effect for developed countries and that the network effects may favour larger economies, partly explaining the low overall impact of telecom diffusion for developing countries, still far away from universal services. Taking into account this brief scenario above, the main objective of this paper is then Page 5 of 39 to review existing data on mobile use and adoption by SMIs available in the LAC region and elsewhere in the developing world, to summarize findings and to suggest research areas and strategies necessary for a better understanding on the importance of mobile telephony for increasing creation and competitiveness (and, consequently, social quality conditions) of LAC SMI, particularly those operating in the informal sector and at the bottom of the pyramid. Fixed, Mobile and Internet subscribers in all countries (per 100 people) Page 6 of 39 CHAPTER 2 2. GSM GSM (Global System for Mobile Communications: originally from Groupe Spécial Mobile) is the most popular standard for mobile telephony systems in the world. The GSM Association, its promoting industry trade organization of mobile phone carriers and manufacturers, estimates that 80% of the global mobile market uses the standard. GSM is used by over 3 billion people across more than 212 countries and territories. Its ubiquity enables international roaming arrangements between mobile phone operators, providing subscribers the use of their phones in many parts of the world. GSM differs from its predecessor technologies in that both signaling and speech channels are digital, and thus GSM is considered a second generation (2G) mobile phone system. This also facilitates the wide-spread implementation of data communication applications into the system. The ubiquity of implementation of the GSM standard has been an advantage to both consumers, who may benefit from the ability to roam and switch carriers without replacing phones, and also to network operators, who can choose equipment from many GSM equipment vendors. GSM also pioneered low-cost implementation of the short message service (SMS), also called text messaging, which has since been supported on other mobile phone standards as well. The standard includes a worldwide emergency telephone number feature (112). Newer versions of the standard were backward-compatible with the original GSM system. For example, Release '97 of the standard added packet data capabilities by means of General Packet Radio Service (GPRS). Release '99 introduced higher speed data transmission using Enhanced Data Rates for GSM Evolution (EDGE). 2.1. HISTORY In 1982, the European Conference of Postal and Telecommunications Administrations (CEPT) created the Groupe Spécial Mobile (GSM) to develop a standard for a mobile telephone system that could be used across Europe. In 1987, a memorandum of Page 7 of 39 understanding was signed by 13 countries to develop a common cellular telephone system across Europe. Finally the system created by SINTEF led by Torleiv Maseng was selected. In 1989, GSM responsibility was transferred to the European Telecommunications Standards Institute (ETSI) and phase I of the GSM specifications were published in 1990. The first GSM network was launched in 1991 by Radiolinja in Finland with joint technical infrastructure maintenance from Ericsson. By the end of