The End of a Monopoly Era
The GSM community is fond of talking about the benefits of competition. Competition between operators is said to be good. Competition between handset suppliers is said to be good. And competition between infrastructure suppliers is said to be good.
The irony of this is that throughout the first half of the 1990sGSM was itself a virtual wireless technology monopoly. Japan got a good Second Generation digital system up and running in the form of PDC. But it then found that a combination of the frequency band it operates in, and inflexible commercial acumen on the part of Japanese suppliers, meant that it could not succeed outside Japan. For its part, North America floundered between fledgling TDMA and IS-95 CDMA systems. Neither of them looked like succeeding in the United States, let alone anywhere further afield.
During the first five years of commercial deployment, GSM has enjoyed startling success. But it has only done so by virtue of being the only credible Second Generation technology on the market. That comfortable position has changed during 1996 with the position of the first serious challenges by alternative technologies. IS-95 CDMA has got off the ground and is alive and commercially kicking at last in the Far East and in the United States. IS-136 TDMA now looks like a far more serious option than IS-54.
And Japan’s cordless PHS has clearly stolen the wireless limelight from GSM with its extraordinary take-up rates. All of a sudden, the world looks like a different place. GSM can no longer assume continued success on the same scale as before. It is no longer the only credible digital wireless solution.
This new reality necessitates a change of strategy on the part of the GSM community. The first thing which has to go is the negative mindset which some Europeans have had towards other digital technologies. True, some of the marketing of IS-95 has been highly derogatory about GS. But now that that seems to have peaked, there is no point pretending that the alternatives to GSM are not a lot more credible than they were a couple of years ago.
In any case it is childish to deny the hugely positive impact which the rise of these rivals has had on the GSM standard. But for the threat posed by IS-95, it is doubtful whether PCS-1900 operators in the US would have pushed so hard for an enhanced 3 kbits/s vocoder – an enhancement which other GSM operators world-wide are now able to benefit from. It is also doubtful whether the migration towards Phase 2+ would now be moving as fast as it is were it not for the GSM camp’s need to stay ahead of the game in the value added service, data and information stakes.
Faced with a new competitive landscape, the GSM community also needs to be more thorough in its marketing. The IS-95 camp has been pushing themselves as much – if it not more – as wireless local loop suppliers. The GSM community, by contrast, has done very little to position itself for wireless local loop.
The evolution of regulatory and standardization policy for GSM has become a little less Euro-centric but it is still too wrapped up in the blue and yellow of the European Union. The American Way has definitely been a positive influence in the last couple of years. The doors should be opened still wider. Asia’s GSM operators are also the key to GSM future. Regrettably, the only Asian countries with sufficiently powerful and outward looking telecoms policy bodies are Japan and Korea, both of which are outside the GSM camp.
1997 opens a new chapter – a Phase Two so to speak –in GSM’s development. Europe’s technology has done fantastically well without any real rivals. Now it must do just as well in the face of real competition.
Patrick Donegan GSM World Focus 1997, p.7
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