3G shift: Evolutionary, not revolutionary

Mobile phone operators will inevitably shift to high-speed third generation cellular technology, but "the process will be evolutionary, not revolutionary."

Speaking before a conference of chief executives this week, Smart president and CEO Napoleon Nazareno said 3G is essential for any telecom company to stay competitive globally.

"But we are in no rush. The price tag currently associated with 3G and the continued delay of its commercial rollout by even the most aggressive carriers caution us to be patient," he said.

"We await the availability of 3G handsets in commercial quantities at price levels not beyond the reach of our markets," he added.

Third generation networks are high-speed, large-capacity systems designed to carry audio, video and other data traffic at much higher rates than current second-generation networks like the popular GSM standard.

Nazareno noted that unlike its counterparts in Europe, Asian operators have balked at incurring huge debts in order to build 3G networks and that Asian governments have avoided costly auctions of 3G licenses.

This has given Asian operators room to take a more gradualist approach to deploying 3G networks.

"As we transition to 3G, we have refocused our attention to our existing platform, layering and supplementing our current 2G network," Nazareno said.

"The key challenge lies in discovering new applications for the current 2G technology – applications that have mass-market appeal and are able to boost operator revenues," he added.

Nazareno cited Smart Zed and Smart Money as examples of 3G-like services made operative on a 2G platform. Both capitalize on basic SMS (short messaging service) or text messaging in making these services accessible and affordable to the subscribers.

Smart Zed is a mobile portal that enables users to access a wide range of data services, both local and global. The portal enables Smart subscribers to personalize their data services either through the Internet or via their mobile handset.

Smart Money, on the other hand, is an electronic wallet and the world’s first and only cash card tied to a mobile phone. It combines the reach of the existing network of MasterCard Electronic with Smart’s own mobile banking and GSM cellular infrastructure.

Last month, this product won for Smart the "Most Innovative GSM Award" at the 3rd GSM Congress held in Cannes, France.

Since launching its GSM service in April 1999, Smart has introduced about 100 different wireless services to its subscribers ranging from news and information services, mobile banking, vehicle location services, ring tones and logos. Another 100 new services will be offered this year.

As a result, mobile data, including SMS, now generates a significant share of Smart’s revenues and continues to grow rapidly.

Meantime, Smart is gradually developing its network in ways that will make the eventual shift to 3G easier to accomplish.

It has, for example, begun to deploy "Ultrasites" – a new generation of GSM base station equipment that substantially increases the capacity of Smart’s 2G mobile phone network. They are about half the size of earlier base stations but can handle over twice the number of subscribers. They also have the added advantage of being upgradable to support the operations of a 3G mobile phone system currently under development.