Global GSM users nearing 1-B mark

Worldwide users of the Global System for Mobile Communication (GSM) neared the one-billion mark as of Feb. 16, a paper released by the Deutsche Bank AG during the recently concluded 3GSM World Congress in Cannes, France said.

By Deutsche Bank’s estimates, GSM global subscribers will exceed 1.5 billion by the end of 2004 and will reach 2.3 billion by 2010. In the last 12 months alone, nearly 198 million new users have been added to the GSM customer base.

Deustche Bank also predicts that at least 85 percent of the world’s next-generation wireless customers will utilize the GSM family of technologies for both voice and data services.

The Deutsche Bank paper, entitled "Brilliant Past, Bright Future," explores the social and economic impact of the explosion of digital wireless technologies in the world, including GSM, General Packet Radio Service (GPRS), EDGE and UMTS/WCDMA.

"Probably no single telecommunications system in recent history has had a profound impact on global society than GSM," the paper said. "Its unprecedented growth in the world has paved the way for increased mobile telephone usage and brought badly needed modern telecommunications services to underserved communities in the developing world."

The paper said that from its obscure beginnings in 1982 as an initiative to create a European telecommunication standard, GSM technology is now used by over 616 operators and 200 countries worldwide, including the Philippines.

"Throughout its relatively short history, GSM has regularly beaten growth forecasts," said Rob Conway, CEO of the GSM Association and member of its board.

The GSM Association is a global trade association serving the world’s GSM mobile operator-members by promoting, protecting and enhancing their interests and investments.

As of 2003, GSM global revenue totaled $277 billion and is forecast to increase to $500 million a year by 2005. The study estimates that in recent years, mobile telephony has created 4.1 million jobs worldwide, of which about 75 percent were contributed by GSM technology.

As the world’s dominant world standard for second-generation digital mobile communications, GSM’s success is attributed to three key factors – standardization, economies of scale and global roaming.

For one, the Deutsche Bank study said that "GSM’s commitment to openness and interoperability, coupled with its compatibility with ISDN and Intelligent Networking concepts, fostered innovation and competition," resulting in a single infrastructure based on common industry standards.

"GSM was developed," Gareth Jenkins, senior telecoms analyst at Deutsche Bank and lead author of the report, said, "from the outset on an open-services-based architecture, with a close alignment to the principles of IN, that has facilitated the introduction of a range of SIM and other IN-based services, including prepaid telecommunications services."

The Short Messaging Service (SMS) or text messaging, which is very popular in the Philippines, is a unique GSM service. The soaring success of SMS worldwide, according to the study, is a key factor in the adoption of GSM technology in many parts of the world.

With 25 billion messages sent globally each month, the study claimed that SMS is a dominant contributor (pegged at 15 percent as of 2003) to the revenues of mobile operators.

Another factor that has contributed substantially to the growth of GSM is the global roaming feature, which allows the delivery of services to users across continents.

"The ability to roam, or use one’s mobile on any other GSM network is the raison d’etre of GSM," Jenkins said.

Deutsche Bank estimates that at the end of 2003, the roaming market in Europe accounted for over $1 billion in operators’ revenues and is forecast to increase to over $1.2 billion by 2005.

As the mobile communications market matures, a new phenomenon is fast emerging – new handsets with PDA, built-in camera, MP3 and Multimedia Messaging Service capabilities, color displays and other functions – which are all made possible over GSM networks.

The world is also moving toward the next generation and increasingly toward a wireless information society as GSM continues to gain new grounds. Up to 80 percent of new phones are GSM phones and the uptake of wireless technology means that mobile phones now outnumber fixed landlines, according to the GSM Association.

"As we rapidly evolve toward a mobile wireless information society that will bring about the convergence of mobility and the Internet, GSM is continuing to play a crucial role in facilitating the smooth transition to the next generation of mobile telecommunications services," Jenkins said.