mobiles

This page considers mobile (cellphone) networks and use of mobiles in advanced and emerging economies.

It covers -

• introduction
• mobiles and the net
• statistics
• standards
• 3G networks and applications
• the mobile business
• use in advanced economies
• imode
• emerging economies
• studies

     introduction

The number of mobile phone customers passed the two billion mark in September 2005. It is likely that there are now more mobiles in use than 'fixed' (landline or POTS) handsets. In some advanced economies the overall number of landlines in use is declining as consumers migrate to the net (eg share voice and net traffic on an ADSL line) and mobile networks. In developing economies mobiles have been hailed as potentially the major bridge across different digital divides.

Adoption of mobile phone technology by consumers and network operators, whether as a complement or alternative to POTS phones, has reflected -

• the portability of mobile handsets and devices such as PDAs
• the inclusion of features such as digital cameras and access to sound files
• the ability to send/receive SMS and MMS
• the privacy offered by mobiles, which are typically 'owned' by an individual rather than by an organisation or shared with a family
• the ease with which a mobile network can be rolled out and maintained by a network operator
• the balance between maintenance costs and consumer willingness to pay a premium for access to the network, typically more attractive to network operators than traditional copper-based POTS

In considering mobile phones we can currently identify an evolution through three basic generations of service, often with different standards that are peculiar to particular regions or even individidual network operators.

The first, retroactively labelled as 1G, used analogue technology for the transmission of voice traffic.

The second generation encompasses competing standards characterised as second generation (ie 2G) or personal communications service (PCS). It uses digital technologies that enabled better audio quality in voice transmissions, increased capacity on networks through enhanced TDMA or CDMA multiplexing and some data (eg time/date with voice calls and SMS in '2.5G'). Most Australian mobile consumers rely on a 2G phone.

Third generation networks (3G), often an extension of the main 2.5G standard, are designed to enable rapid transmission of very large quantities of data, for example video clips and other MMS. Adoption of those networks has been inhibited by -

• the absence of what many consumers regard as a compelling case for switching to 3G
• licensing restrictions by government, which have sought to extract the maximum value by auctioning off spectrum to potential 3G network operators
• uncertainty among operators about which standard to choose
• uncertainty among content creators/packagers and service providers about whether to enter the 3G market
• reluctance among some operators to move to 3G while they are still recouping investment in 2G.

     mobiles and the net

Apart from personal computers, the internet device with which many people are most familiar is the mobile phone. The primary uses are voice and SMS (aka texting), with both adults and the under-18 years cohorts in many countries making intensive use for sending messages to peers and receiving messages from other mobiles or from personal computers via web interfaces.

Despite sometimes delirious forecasts by enthusiasts, there has been little sustained consumer interest outside Japan in use of mobiles for surfing, accessing music other than ringtones (which until the advent of the iPod was the most profitable online music sector), reading books or watching video - erotic or otherwise - that is longer than short clips. Businesses are thus struggling with different models for 'mobile television'.

Recurrent claims that mobiles will "soon replace PCs as the most popular method of accessing the Net" should be regarded with scepticism. Although over a billion mobiles may be "internet-enabled", few owners are using that capacity and uptake of MMS has also been low. That is unsurprising, given connectivity costs, usability barriers and the absence of compelling content. Much of the hype about "Hollywood blockbusters on your mobile" relates to video downloaded over broadband and then transferred - painfully - to the mobile. An IMAX experience it is not!

Some users are more sensibly using a mobile as a bridge between a laptop computer (larger screen, greater memory, easier data entry and navigation) and the net. The convergence discussed earlier in this guide means that the distinction between mobile phones and laptops is blurring, with some personal computers being shipped with or retrofitted with a mobile phone card that obviates the need for a cable or bluetooth connection to a mobile handset.

Such cautions have not deterred the brave (or merely foolhardy) and it thus common to see proposals for the use of phones as electronic wallets, repositories of personal medical records or even passports, or security devices.

The ABC for example burbled that the mobile phone will

offer us the ability to track our friends or children; provide bullet-proof ID; act as a credit card; download films and books; even replace our front door keys.

That hype is similar to some of the wilder forecasts about the imminent benefits (or horrid ills) of subcutaneous RFID implants.

     statistics

The total number of mobile connections in 2005 was equivalent to around 30% of the estimated world population of 6.5 billion (with total connections higher than the real number of users due to multiple connections and inactive prepaid connections).

The mobile industry celebrated reaching 1 billion subscribers in 2002, just 20 years after it was introduced, making it the fastest growing technology at that time. In the same year it overtook the fixed network and its growth has carried on unabated with the second billion coming in 2005. Global mobile phone subscriptions headed towards 3.25 billion at the end of 2007, out of a population of 6.6 billion people. Penetration in Europe reached a notional 100% of the population (some people having two or three mobiles, others churning through subscriptions throughout the year), with 666 million subscriptions. In December 2008 TeleGeography reported that international voice traffic on mobiles reached 343 billion minutes in 2007, projected to reach 385 billion minutes in 2008. During 2007 nearly one-third of international calls were placed from mobile phones, with 45% of international calls terminating on mobiles. TeleGeography estimated that by the end of 2009 more international calls will be made to mobile phones than to fixed lines.

The GSM family of technologies, which includes W-CDMA, had an estimated 1.5 billion subscribers as of 2005 (with 78% of the world market).

In many countries the cellular market is now maturing, with market penetration over 100% of the population in some nations such as the UK, Sweden, Austria and Italy. In those states consumers are 'trading up' to new phones/services such as 3G and aquiring additional phones. Globally most growth is now coming from large, less well-developed markets such as China, India, Eastern Europe, Latin America and Africa.

Overall the mobile industry expects to ship around 750 million new devices in 2005, with Ovum projecting 3 billion subscribers by the end of 2010. Gartner forecast in July 2005 that global handset sales would rise from an estimated 780 million to over 1 billion in 2009, with some 674 million mobiles sold in 2004. Cumulative sales from 1997 to 2009 were forecast at around 7.5 billion phones (with around 2.6 billion in use).

     current standards

There is no single global standard for mobile telephony, with the result that some regions (and even some operators) feature two or more standards.

2G essentially comprises competing TDMA and CDMA systems -

• GSM (TDMA), developed in Europe and subsequently adopted in much of the world, including Australia
• PDC (TDMA), used only in Japan
• IDEN (TDMA), used by Nextel in the US and Telus in Canada
• IS-136 (TDMA), used in the Americas and often referred to as 'TDMA' or D-AMPS
• cdmaOne (CDMA) commonly referred as simply CDMA in the US), used in the Americas, Australia and parts of Asia and often referred to as 'CDMA' or IS-95

The dominant family of 2G standards, particularly outside the US, is GSM. It dates from the Groupe Spécial Mobile (GSM) study group established in 1982 by the Conference of European Posts & Telegraphs (CEPT) to develop a pan-European public mobile system. CEPT envisaged that the system would supersede incompatible individual operator/national developments and feature -

• good subjective speech quality
• low terminal and service cost
• support for international roaming and new services
• spectral efficiency and ISDN compatibility

Responsibility for GSM was assumed by the European Telecommunication Standards Institute (ETSI) in 1989, with commercial services commencing in 1991.

A lucid introduction to GSM is here.

     3G networks and applications

Third generation networks, aspiring to provide seamless access to email, audio, still and moving images and other content, use a range of technologies that are an extension of 2.5G systems and thus reflect the ambitions of specific nations and network consortia.

Those technologies include -

• Universal Mobile Telecommunications System (UMTS, sometimes promoted as 3GSM) is based on GSM and has been developed under the auspices of the Third Generation Partnership Program (3GPP) consortium representing European and Japanese interests
• CDMA-2000-1x-EvDO, also based on CDMA, has been deployed commercially in Japan and claimed to offer better performance than UMTS.
• Personal Handy-phone System (PHS, sometimes promoted as Personal Access System or PHS).

     use in advanced economies

A detailed profile on SMS is here, along with a complementary profile on MMS and on ringtones.

     i-mode

In Japanese mobile phone giant NTT DoCoMo announced mid-2001 that subscribers on its wireless internet i-mode network had climbed to 20 million, 100% growth over a seven month period.

DoCoMo, something of an oddity, claimed that consumers were serviced by 828 companies offering information on i-mode and between 1,500 to 40,000 sites. The uncertainty reflects questions about the compatibility of many of the sites; only a thousand or so are formally recognised by DoCoMo, which uses a proprietary standard.

Telecommunications analysts suggest that DoCoMo is now gaining around a million users each month. The use made of the service is more problematical. Many anecdotal reports suggest that the service is overwhelmingly used for 'texting', rather than 'surfing'. It is an 'always-on' packet-data transmission system. Subscribers are charged according to the volume of data they transmit, not the time spent online. Penetration of i-mode in Europe has been very poor: UK telco O2 for example indicated that despite substantial investment in marketing the number of i-mode subscribers had failed to climb past 260,000 as of July 2007.

     studies

For a concise historical and cultural overview of mobile phones see on John Agar's Constant Touch: A Global History of the Mobile Phone (London: Icon 2003). There is a more detailed discussion in Perpetual contact: Mobile communication, private talk, public performance (Cambridge: Cambridge Uni Press 2002) edited by James Katz & Mark Aakhus, Magic in the Air: Mobile Communication and the transformation of social life (New Brunswick: Transaction 2006) by Katz, Personal, Portable, Pedestrian: Mobile Phones in Japanese Life (Cambridge: MIT Press 2005) edited by Mizuko Ito, Daisuke Okabe & Misa Matsuda, Thumb Culture: The Meaning of Mobile Phones for Society (New Brunswick: Transaction 2005) edited by Peter Glotz, Stefan Bertschi & Chris Locke, Mobile Communication and Society: A Global Perspective (Cambridge: MIT Press 2006) by Manuel Castells, Mireia Fernández-Ardèvol, Jack Qiu & Araba Sey and Hans Geser's 2002 paper Towards a Sociological Theory of the Mobile Phone.

Anxieties about mobiles are explored in Adam Burgess' persuasive Cellular Phones, Public Fears & A Culture of Precaution (Cambridge: Cambridge Uni Press 2004) and in Gerard Goggin's more discursive Cell Phone Culture: Mobile Technology in Everyday Life (London: Routledge 2006).

Industry associations and individual network operators have published reports of varying quality about uptake of mobiles. In Australia for example see the thin Australian Mobile Phone Lifestyle Index released in 2005 to "address the information deficit regarding mobile phone usage in Australia".

R Bekkers & J Smits explore standards in Mobile Telecommunications: Standards, Regulation & Applications (Boston: Artech House 1998), with a further exploration in Wireless Communications: The Future (New York: Wiley 2007) by William Webb.

For i-mode see the 2001 paper from IBM on The Semi-Walled Garden: Japan's "i-mode Phenomenon" and Jeffrey Funk's paper From Ticket Reservations to Phones as Tickets and Money: New Applications for the Mobile Internet in the Japanese Market (PDF).

We have pointed to corporate histories of the mobile phone giants elsewhere on this site. They include Anytime, Anywhere: Entrepreneurship and the Creation of a Wireless World (New York: Cambridge Uni Press 2002) by Louis Galambos & Eric Abrahamson, Rollercoaster: The Turbulent Life & Times of Vodafone & Chris Gent (New York: Wiley 2003) by Trevor Merriden, the triumphalist DoCoMo: Japan's Wireless Tsunami: How One Mobile Telecom Created a New Market and Became a Global Force (New York: Amacom 2002) by John Beck & Mitchell Wade and Money from Thin Air: The Story of Craig McCaw, the Visionary who Invented the Cell Phone Industry, and His Next Billion-Dollar Idea (New York: Crown 2000) by O Casey Corr.




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