3GHistorymyills

© Nokia Networks March 2003

A History of Third Generation Mobile

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Contents Executive Summary 2 Two Decades of Success 3 The first global mobile standard 4 Data already driving growth 4

Text happy teenagers 5Identity on a card 6Roam free 720 years of GSM 7The first digital mobile network appears 8The path to 3G 9Europe takes the initiative 10Single standard, many variations 10Frequency fluctuates 11Down to brass tacks 123GPP Release 99 offers taste of things to come 12Evolution continues 13

Conclusions & Future developments 15

CDMA2000 - an alternative route to 3G 16

Authors Nokia Networks

Further information Nokia Networks Tel.+44 (0)1252 866000 [email protected]


Some of the statements in this document are forward-looking statements, including without limitation those regarding (i) the timing and expectations for GPRS and 3G deliveries, launches and roll outs, (ii) estimates of market share, values of contracts, and volume growth, (iii)

estimates of revenues, the size of markets, and customer usage of various types of services and products, and (iv) statements concerning the timing of the development and acceptance of 3G technologies and applications. Because these statements involve risks and uncertainties,

actual results may differ materially from these forward-looking statements. For a discussion of the factors that could cause these differences, readers are directed to the risk factors specified on pages 21 to 23 of the Company’s Form 20-F for the year ended December 31, 1999 and the

factors listed in the final paragraph of the Company’s press release dated March 15, 2001.

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Executive Summary

The planning for 3G began as long ago as 1985 when the International Telecom-munications Union (ITU), with admirable foresight, identified a demand for richer, more complex services than could be achieved by the myriad of analogue mobile technologies of the time.

Fifteen years later, the staggering success of GSM (Global System for Mobile Communications) and SMS (Short Message Service) vindicated the plans for 3G. And, what is more, people want to use their mobile phone for more than talking. The recent launches and uptake of MMS (Multimedia Messaging Service) by GSM operators around the world is tangible evidence of this demand for rich mobile data services.

Since 1985, there has been a great deal of planning and development as to the best technology for 3G. After many cross-party working groups and trials, standardisation bodies from Europe, United States, Japan, and Korea joined together in 1998 as the 3G Partnership Project (3GPP) to promote Wideband CDMA (WCDMA) as the most suitable radio technology for the burgeoning GSM industry to migrate to.

The 3GPP’s vision of 3G – UMTS (Universal Mobile Telephone System) – has subsequently proven to be the dominant world standard. Nearly all of the 3G licenses issued around the world so far have been WCDMA-based.

In 1999, Finland issued the first 3G licences – based on WCDMA - and was followed by a slew of countries between 2000-2001. However, the first set of usable specifications for UMTS equipment had not been issued by the 3GPP – and wouldn’t be for some time.

In fact, it was not until March 2002 that Release 99 had been fully “fleshed out” after a necessarily lengthy process in reaching industry consensus. Only then could many operators comfortably commit to building out their 3G networks.

Release 99 covers all of the basics needed to deploy commercial 3G networks. Release 99-compliant networks lay the foundation for further functionality to be added at Release 4, 5 and 6, allowing UMTS to progress in sensible stages. Each backwards-compatible Release will give operators a platform for launching ever more innovative services.

While at times press attention focuses on 3G delays, it must be remembered how far 3G has already come, and how close it is to changing the way consumers and businesses view mobile communications. GSM was a decade in the making before becoming the dominant global wireless standard. UMTS is also the result of many years of research, development and testing.

The size and scope of the worldwide GSM industry means there are a huge number of technology developers involved so ensuring openness and interoperability of standards and interfaces has been paramount.

At each stage in the development process – and UMTS is an evolutionary process – specifications are open to review by the whole industry. While it can take a long time to reach a consensus, the results - open standards – have proven to be the key measure of success of many global technologies such as GSM.



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Nokia has proven to be a thought-leader in mobile communications throughout its development, from the first analogue networks like NMT, available in the early 1980s, through GSM’s development in the early 1990s to its offspring HSCSD and GPRS in the late 1990s. In the development of UMTS and EDGE, Nokia has once again been at the forefront of nurturing this complex new technology, but also ensuring its openness and interoperability.

As we will see from this White Paper, leading technology developers like Nokia and standards bodies like the ITU and ETSI have worked in unison to bring to market what promises to be the most transformatory technology since the emergence of the Internet.

Two Decades of SuccessThe mobile telecommunications revolution over the past 20 years has proven that time and again innovation, cost efficiency and pervasiveness could only happen with open standards and competition. According to the ITU, in 1986 there were just 1.4 million mobile subscribers, compared to 410 million fixed telephones lines. In late 1990s, the number of mobile phones overtook the number of fixed lines in some countries, e.g. in Finland, and this has happened in many countries since. During the first half of 2002, the number of mobile subscribers worldwide reached the magical one-billion figure. And this exponential growth continues unabated.

The communications boom of later years has largely been thanks to the widespread adoption of mobile phones. From an extreme luxury two decades ago to the role of basic phone service for many millions today in the developed and developing world, it is largely due to GSM’s emergence and subsequent dominance of the global mobile industry.

Only through such massive adoption and interoperability have technology developers been able to achieve the economies of scale necessary to bring the cost of high technology down to the levels accessible to so many hundreds of millions of people.

New Subscribers by technology and region 2002Top 10 Rankings (exc. Japan)

GSM Western Europe13.2%

CDMA Asia Pacific5.4%

GSM Africa4.9%

CDMA Latin America2.8%

TDMA USA/Canada2.2%

GSM Asia Pacific44.6%

GSM Eastern Europe11.6%

TDMA Latin America5.6%

CDMA USA/Canada6.7%

Source: EMC database

GSM Middle East2.9%



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The first global mobile standardGSM has proved to be the world’s first, and only, truly global mobile standard. There are now over 500 licensed operators in 170 countries offering GSM services. GSM alone has over 70 percent share of the world market and continues to rise. It is forecasted that by 2006 the GSM family - GSM, GPRS, EDGE and WCDMA - will have close to 85 per cent of the world market.

In 1990 there were just over 10 million mobile subscribers around the world, by the middle of the nineties this figure had increased 10 fold, and by 2001, there was over 1 billion mobile subscribers, accounting for roughly half of the world’s telephone lines. By the end of 2003, there will be 1 billion GSM subscribers alone. This growth is unparalleled in the history of technology adoption, even by electricity mains, radio, television or the Internet.

In Taiwan, for instance, the GSM penetration is more than one subscription per person. At the other end of the scale, in many parts of the developing world, a mobile phone, shared by all members of a rural community, may be the only phone service of any kind for miles around. Mobile is going places where the traditional PSTN (Public Switched Telephone Network) cannot.

Data already driving growthMobile telephony has not just got people talking; it has connected friends, family and businesses with a unique data service. SMS, or Short Message Service, has been a capability of GSM since the standard’s first adoption in the early 1990s. According to the GSM Association, the first SMS was sent by a PC to a Vodafone handset in the UK in December 1992.

Utilising the signalling channel – a radio channel that is used for transmission of control information - SMS was never designed to be anything more than for signalling. Initially, mobile operators’ field engineers used SMS to communicate with each other and central office, and gradually the practice began to grow with other business customers beginning to use the service.

With the widespread introduction of free voice mailboxes for each subscriber and the notification of new voice messages being sent to handsets as an SMS, the volume of SMS traffic began to grow in proportion to the amount of new mobile users.

And then something strange happened. In 1995, a German GSM operator introduced the first prepaid services. With no subscription fee or account number, this new service model opened up a new market for mobile services. Proving such a success, the prepaid model was quickly adopted by GSM operators throughout the world, consequently proving a major factor in tripling the number of GSM subscribers.

The average European GSM operator now has around two prepaid customers for every one contract customers. Some like Virgin Mobile are based solely on prepaid. Prepaid has been hugely successful among teenagers, where they could control spending in advance. But because voice tariffs remained relatively expensive during the late 1990s, tens of millions of young users discovered the merits of communicating with each other using SMS. Interoperability played a key role in making SMS the success it has become.



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Text happy teenagersBut while operators were gaining millions of new subscribers, they were losing millions of dollars by transporting this tidal wave of SMS traffic for free. Original prepaid billing systems were not designed to charge for text messages, only voice minutes. It was sometime before the billing systems could be adapted.

By the time mobile operators were able to rate and bill text messages, tens of millions of teenagers were already inventing their own language to communicate with. With only 160 characters allowed per message, words were conjoined, vowels removed, and abbreviations formed to create a language of their own. By the time text rating and charging was introduced, SMS had reached a critical mass.

SMS traffic was growing at a staggering rate, with many operators inundated with messages they couldn’t store and forward quick enough. Person-to-person texting has since been joined by text alerts, (usually subscription-based content services like share information, sports headlines or weather reports), text games, logos and ring tones carried by SMS, and text chat rooms. There were 4 billion text messages sent around the GSM world in January 2002. By May 2002 there were 24 billion per month, and operators were deriving between 10-20 per cent of their profits from SMS.

January 2000 - May 2000Billions

Source: GSM Association

SMS Growth27

24

21

18

15

12

9

6

3

0Jan-00 May-00 Sep-00 Jan-01 May-01 Sep-01 Jan-02 May-02



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In fact, of the top 25 mobile operators deriving data revenues from their subscribers, 22 are GSM operators. The remaining three (NTT DoCoMo and J-Phone using PDC, and KDDI using CDMA) are all Japanese operators who invested heavily in subscription-based content services like Imode. In the Philippines, the most text-happy nation on earth, the two major GSM operators Smart and Globe derive upwards of 35 per cent of their average revenues per user from SMS fees.

SMS is an inherent feature of GSM but not of other mobile standards like CDMA, TDMA, iDEN, PDC or PHS. Consequently, GSM operators are years ahead of their compatriots in deriving a significant share of their revenues from data services. CDMA operators have long sought to emulate SMS success, but are only now finding a way to develop a text service.

Identity on a cardThe SIM (Subscriber Identity Module) card has been another key factor in GSM’s success. Unlike other standards like CDMA, TDMA, iDEN, PDC or PHS, SIM is an inherent feature of GSM and consequently GSM operators have been able to exploit SIM functionality to deliver real business and customer benefits.

A subscriber’s ID and telephone number is authenticated by a SIM rather than by the handset itself. This has allowed users to own more than one phone per account, to change operators without having to change handset, or indeed to remain with the same operator with the same number while upgrading handsets on a yearly basis.

This last option has been particularly critical in helping operators combat customer churn while freeing handset developers to continually innovate and launch new features. The SIM has also become an important resource for storing basic data like calling profile and address books, which can be ported from one handset to another.

The PIN code (Personal Identification Number) and other personal security codes prevent the misuse of the SIM card.

Source: EMC World Cellular Data Metrics report Dec 2002

Percentage of ARPU that is data

40

30

20

10

0

GlobeSm

art

NTT DoCoMo Ja

pan

J-Phone Ja

pan

RadioMobil Cze

ch

O2 Germ

any

Amena Spain

T-Mobile

Germ

any

Vodafone G

ermany

O2 UK

KDDI Japan

Telefonica Spain

Orange UK

O2 Ireland

T-Mobile

UK

Mobistar B

elgium

Telenor Norw

ay

Vodafone U

K

O2 Neth

erlands

Panafon G

reece

Vodafone Ire

land

Netcom N

orway

MobileOne Singapore

STET Hella

s Gre

ece

E-Plus G

ermany

GSM PDC CDMA



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Roam freeThe third key factor in GSM’s success is its inherent support for roaming and interoperability. It has meant that anyone having a GSM subscription and handset has been able to make and take calls in all countries where GSM operators exist. This means in practice major economies of scale as the same handsets and networks are delivered worldwide, and end-users can always access the same familiar services independently from their whereabouts.

This form of interoperability was a key part of the GSM planning process that began in earnest in 1985 - seven years before the first GSM network was launched.

In the USA, however, for many years, the heterogeneous cellular market - with CDMA, AMPS, iDEN and TDMA networks - roaming and interoperability were very long in coming. Among other factors, there has been the difficult of settlement when interconnecting a called-party pays call to a calling-party pays.

Roaming agreements and interoperability has allowed GSM operators to be paid for the portion of any call they carry either directly from its subscriber, or through settlement from the other party’s operator.

Together roaming, interoperability, new services enabled by SIM cards and SMS have together made GSM the world’s most prevalent mobile standard. And although not exclusively, GSM has been driven by European operators, technology developers and regulatory agencies. While the PC revolution has been firmly an American success story - with Japan and Taiwan benefiting significantly too - GSM is the first major global technology to have its heart, soul and brains in Europe.

20 years of GSMAnalogue cellular phone systems have been in commercial use for nearly 25 years, but were struggling to grow much like the early PC market before it standardised around Macintosh and IBM technology. Network systems and phones were large, expensive and poorly supported. The cellular market was fractured by dozens of competing standards and developers.

In Scandinavia, though, the groundwork for a common mobile technology was being laid. Operators in the Nordic countries were coalescing around an analogue standard known as NMT. Established in 1978 by Finland, Sweden, Denmark, Norway and Iceland, NMT (Nordic Mobile Telephone system) was the first analogue cellular standard operating in the 450 MHz range. NMT proved popular enough to be exported worldwide. Even today, there still remain commercial NMT services like Ukraine’s UMC.

The first NMT network was launched in 1981 with Nokia producing many of the car phones for it. By 1987, Nokia had produced the first portable mobile phone for NMT. It was the increasing portability, and the ability to roam across the Nordic countries that gave the European Union an insight into the potential of mobile communications.

In 1982, the EU reserved the 900 MHz band, a higher frequency than NMT for digital networks throughout Europe. By 1986 the radio technology that would become GSM had been chosen.



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The first digital mobile network appearsBy 1989, the European Telecommunications Standardisation Institute approved the final specifications for phase 1 of GSM. By 1992, the world’s first commercial GSM network had been launched by the Finnish operator Radiolinja, echoing the prominent position Finland was beginning to take in mobile communications. Other countries soon followed Finland’s lead and by the end of the next year, there were 32 live GSM networks around the world, and by 1996 there were 120. The GSM Association (known formerly as GSM MoU, Memorandum of Understanding) was formed in 1995 to promote interoperability and roaming.

Originally planned for a 900 MHz spectrum band, the growing number of operators and users revealed that a new frequency band was needed. 1800 MHz GSM was soon launched, and interoperability between networks of either frequency was soon available. Despite a large base of CDMA, AMPS and PHS users in the US, a 1900MHZ band was released by the Federal Communications Commission for GSM and IS-95 usage. The first tri-band GSM phones began to appear in 1999 showing just how far GSM had become a truly world standard.

By 1999, plans had begun in earnest to build the road to 3G. Three new network technologies – HSCSD (High Speed Circuit Switched Data), GPRS (General Packet Radio Service), EDGE (Enhanced Data Rates for GSM Evolution) – were being demonstrated at the industry’s seminal exhibition, ITU Geneva 1999, to show how the migration to data services did not need a single, step change in the network as each were an overlay network to existing GSM radio networks.

In the shift of the century, GPRS (General Packet Radio Service) was rapidly adopted by the GSM operator community. For the industry, the evolution from circuit switched networks to packet switched proved a major breakthrough, one that has accelerated the shift to first true multimedia services, such as MMS.

325m

0

71.9m

0.4m

51.8m

17.3m1.4m

16.2m

65.8m

23.1m 6.3m

0.1m36.1m

314.5m

Latin America

North America

West Europe

East Europeand Russia

Africa

Middle EastAPAC

GSM Asia Pacific44.6%

CDMA USA/Canada6.7%

GSM covers 95% of the planet

December 2002GSM: 169 countries and 787m subsCDMA: 32 countries and 142m subs

CDMA

CDMA

GSM

GSM

CDMA GSM

CDMA GSMCDMA GSM

CDMA GSM

CDMA GSM



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The path to 3GWhile GSM was being launched into an analogue mobile world, planning for its successor had begun in earnest many years early.

GSM utilises a technology known as time division multiple access (TDMA), which allows more than one call to be made in any one chunk of radio frequency by splitting it into timeslots. This means that within every cell, every call has a dedicated channel between handset and base station, which they share in turn with others and data is transmitted at 9.6kbps, and voice with 12.2. Kbps. While perfect for voice communication, where there is a predictable traffic load, it would prove an unsuitable technology for high-speed services. Spectrum is a limited resource and GSM, while better than analogue which required a dedicated frequency band for every single call, is limited in its data carrying potential.

Yet as early as 1985, regulators had a vision that the future of mobile would be multimedia - involving voice, video and data. So in 1985 the ITU, the world’s governing telecom body, began planning for the next generation digital cellular - Future Public Land Mobile Telecommunications Systems (FPLMTS) - later to become known as IMT-2000. The goal of FPLMTS was to provide broadband multimedia wireless services via a single global frequency band and standardised, interoperable technologies. The frequency range would be allocated around 2000 MHz.

Research projects into what would be the third generation of mobile technologies garnered many acronyms - RACE 1, RACE2 ACTS, FAMOUS, CODIT, ATDMA and FRAMES – and quietly carried on through the late 1980s to the mid-1990s.

CODIT (code division testbed) and ATDMA (advanced time division multiple access) were of particular importance. They investigated the suitability of wideband Code division multiple access (CDMA) and time division multiple access (TDMA) as the most suitable radio access technologies for 3G. Both techniques remained under investigation for a decade until 1998.

Europe takes the initiativeIn 1988, the newly formed European Telecommunications Standardisation Institute (ETSI) took up the reigns of developing a successor to GSM. It was becoming a central issue for Europe’s politicians, envious of the boom in IT and PC technology in the US and Pacific Rim. A Mobile

NMT

1G 2G 3GWCDMA for new frequenciesEDGE for existing ones

discontinuity evolution

• start early '80s• analogue• speech, (data)• roaming in

Scandinavia andsome Europeanmarkets

GSM

• start early '00s• speech• very high-speed

data• mobile Internet• MMS multi-call• video streaming

• start early '90s• speech, high -speed

data, packet -switched(GPRS)

• encryption• SMS and MMS• global roaming



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Green Paper was published by the European Commission in 1994. It led to the formation of the UMTS (Universal Mobile Telephony Service) Task Force in 1995, a cross-industry body that would seek to encourage and nurture 3G development and deployment. Universal Mobile Telephony Service would become Europe’s name for 3G.

Between 1988 and 1998 ETSI continued to work on the critical air interface standards that would make up Europe’s 3G service. It decided in 1998 that UMTS should consist of both a code-division (WCDMA) and time division element (TD-CDMA).

Meanwhile the ITU had assigned two of its departments, ITU-T and ITU-R, to look after the global standardisation of the protocols and radio transmission techniques respectively. In general, though, ITU recommendations were usually a set of requirements and so prospective specifications were solicited from commercial and academic technology developers. In 1998, the ITU issued open requests for candidate technologies, with 15 proposals being submitted. Ten of these were for terrestrial cellular systems, five for satellite-based systems.

It emerged that there were two leading candidates. The ETSI-proposed, Japan and EU-backed UTRA (UMTS terrestrial radio access), while US technology developers submitted proposals for what would become known as CDMA2000, an evolution of the IS-95 standard, a.k.a. CDMAOne that was widely deployed in North America and South Korea.

Single standard, many variationsWith major political and economic backing behind both camps, it became apparent that choosing a unanimous winner was an unlikely scenario. The European Union was adamant that its UMTS family of standards should succeed, as they were a natural progression of GSM, which had by then become the world’s most common mobile network standard with a market share in excess of 60 per cent. While GSM was a time-division duplex technology and UMTS was based on code-division, WCDMA offered a more natural progression through GPRS and EDGE for the world’s GSM operators than its chief rival CDMA2000.



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The CDMA Development Group, chief proponents of CDMA2000, was driven largely by North American technology developers with an invested interest in the progression of cdmaOne as the global standard for next generation mobile. But at the time, CDMA had a world market share of just 15 percent. America had missed out on the success of GSM and didn’t want a repeat of being a technologically proprietary island in a sea of compatibility.

GSM had originally been a very European success story. Designed to unify Europe’s disparate analogue mobile networks, it soon became a world standard, and one of the few information technology areas that Europe could proudly claim a leadership in. Many leading Asian countries – themselves with a variety of digital mobile standards like GSM, CDMA, PDC and residual analogue networks based on AMPS, NMT and PHS – sided with the Europeans. The Koreans, for instance, had been a CDMAOne country, but wanted to ensure worldwide compatibility, so it reserved two of its 3G licenses for WCDMA operators.

So Japanese, Korean and even US standards bodies joined the European activities in forming the Third Generation Partnership Programme (3GPP), with the aim of harmonising the various WCDMA proposals. The momentum of the 3GPP gained so much that ETSI transferred all of its 3G research and standardisation work to it.

But a second group had formed to promote the interoperability and spread of CDMA2000. Called the 3GPP2, bickering soon began again in earnest. By the end of 1998, neither camp had resolved their differences and the ITU issued an ultimatum. But still no resolution, so in March 1999 the ITU issued a single standard – with five variations. While this would allow 3G to move forward, it wouldn’t actively promote global mobile harmonisation. The standard would be WCDMA with variants for CDMA2000 and TD-CDMA, a technique slated to be developed later in 3G’s lifecycle. However, in practice, and confirmed by licence auctions, WCDMA has emerged as the dominant 3G standard. By the end of 2002 112 WCDMA licences were given – By the end of 2002, 112 operators had selected WCDMA for their 3G networks, against only 2 for CDMA2000.

Frequency fluctuatesWhile the resolution over the air interface for 3G took many years to reach a semi-resolution, choosing a global frequency band for IMT-2000 proved equally complicated.

The initial band for what is now 3G in Europe and Japan was decided way back at the World Radio Conference in 1992, when 1900-2200 MHz was agreed as a global mobile frequency band. The World Radio Conference in 2000 ratified this, and added 2500MHz as another potential global mobile frequency band.

Unfortunately, neither of these spectrum bands was available in the USA. The US instead proposed that its IMT2000 mobile services would be in the 800-900MHZ band, 1700-1900MHz, or 2500-2700MHZ. Unfortunately none of these proved to be available either – the lower band already partially occupied by mobile license holders, the middle one by the Department of Defence which point blank refused to move, and the upper band by a community and educational television broadcaster who’ve refused to move without tens of billions of dollars of compensation.

The US government’s new plan is to consider the availability of the 1710-1770 MHz band and a 2110-2170 MHz band. The auction for these, should they be approved, will not be until



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September 2004. This will not delay US operators launching services similar to 3G in existing bands, but it will limit their potential because of increasingly crowded airwaves.

This has not been a problem for the rest of the world’s mobile operators, particular those that have opted for WCDMA/UMTS. WCDMA requires paired spectrum – one band for uplinks and one for downlinks – so in Europe the ranges 1920-1980MHz and 2110-2170 MHz were allocated for WCDMA services, and 2010-2025MHz for TD-CDMA.

Down to brass tacksIn 1998, standards and frequencies were coalescing sufficiently for technology developers to begin trialling and testing the various 3G systems. NTT DoCoMo, Japan’s visionary mobile operator that was already having success with a narrowband mobile data service called Imode, began planning for its successor. It had chosen to work with the WCDMA standard, and with the help of a Nokia terminal, in September 1998, DoCoMo made what is believed to be the first 3G call.

In February 1999, Nokia was involved in a second UMTS milestone having completed what is thought to be the first WCDMA call through the public switched telephone network. The calls were made from Nokia’s test network in Finland using a WCDMA terminal, WCDMA base station subsystem and Nokia GSM Mobile switching centres connected to the PSTN.

Nokia’s firsts were soon followed by a first from the Finnish government. The following month, March 1999, the Finnish Ministry of Transport and Communications issued the world’s first 3G licenses to Sonera, Radiolinja, Telia Mobile and Suomen Kolmegee for a 20-year period. This “beauty contest” approach saw the successful applicants receive their 2 x 15 MHz paired spectrum and unpaired 5 MHz spectrum at no cost, a contrasting approach to the now infamous UK and Germany auctions that saw license fees spiral into the billions.

Later that year, in December 1999, the first output of the 3GPP was announced. The 3GPP, led by standards bodies working closely with technology developers, defines the building blocks for every part of a 3G service - radio network, core network, terminals, OSS and interoperability with 2G and 2.5G networks. Because 3G incorporates many new technology advances, the 3GPP has taken a holistic approach and liases closely with other industry groups across a broad range of information technologies like the Internet Engineering Task Force (IETF), World Wide Web Consortium (W3C), WAP Forum, MPEG group and the Digital Video Broadcasting (DVB) project.

3GPP Release 99 offers taste of things to comeThe 3GPP’s first complete specification set, now known as 3GPP Release 99, allowed technology developers a cohesive set of standards to build hardware and software around.

3GPP Release 99 set the basic standard for the UTRA in both its time-division and frequency-vision duplexing modes. It introduced support for code division multiplexing, ATM, CAMEL phase 3 (which allows subscribers to access their full portfolio of IN services even when roaming in a foreign network); an open service architecture so that different vendors’ equipment could interoperate; location services; and a new voice codec called AMR for use with any GSM network.



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AMR (adaptive multi rate) is a new speech decoder that will help voice be much more spectrally efficient. A handset-based technology, it allows the device to decide the optimum conditions for voice communication. With little interference, AMR can help reduce the bandwidth for toll-quality voice to half of what is needed in most GSM networks now. But as user density in a cell increases, or there is a significant amount of interference, the AMR codec can temporarily decrease the amount of bandwidth needed for a call, thus downgrading slightly its quality in order to keep the average service quality over all users acceptable.

So 3G offers for operators not only new spectrum to use for alleviating an increasingly crowded GSM 900, 1800 and 1900 MHz spectrum, but it is also significantly more efficient in handling voice traffic than its predecessor.

With this standard in place, developers had the critical interoperability needed between their equipment, and other equipment like handsets, billing systems or radio networks, from other vendors. Only when this had been established could operators begin their network build with any confidence. Early UMTS networks DoCoMo’s FOMA in Japan, O2’s UMTS trial in the Isle of Man, and Monaco Telecom’s 3G network are built on the open, but a very early version of, 3GPP Release 99 standard. True commercial WCDMA network launches are based on equipment compatible with 3GPP Release 99, version March 2002 or later.

Evolution continues3GPP Release 99, though, is very much a small part of the UMTS picture. Over the course of the 20-year UMTS licenses, there will be many more improvements made to the standards that define networks, applications and services. Release 4 (originally Release 00, but renamed), for instance, which was frozen in March 2001 meaning no more features can be added to the specifications anymore, is nearing the end of the product development process. Different network subsystems, like circuit switched, packet core and radio networks, are developed in different phases. In February 2002, the first Release 4 compliant core products were shown at the GSM Congress in Cannes. By October, Nokia and Italy’s Vodafone Omnitel carried out the world’s first VoIP call completed in a Release 4 compliant network, transporting circuit-switched voice and data calls through an IP backbone.

TDMAGSM/EDGE

3GPP

3GPP2

Open interfacemulti-access

network

All IP

HSDPAWCDMA

GSM/GPRS

PDC

1000m users by end of 1H/2003 Source: EMC

180m users by end of 1H/2003 Source: EMC

cdmaOne

2G First Steps to 3G 3G Phase 1 Networks Evolved 3G Networks

cdma2000 1xcdma2000 1xEV-DV

cdma2000 1xEV-DO



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Release 5, the most up-to-date version of the 3GPP’s specification sets, introduces a host of new services and was only frozen in March 2002. CAMEL Phase 4; end to end quality of service; instant messaging; IP-based multimedia services; SIP support; high speed downlink packet access (HSDPA); and an IP core and radio network.

The latter means that voice, from handset to handset, will be IP-based rather than circuit-switched based. Not only does this open up a raft of possibilities for new voice services, but it allows users to access the web, send emails, while holding a voice or videophone call. The HSDPA supported by this version of 3GPP will allow peak download data rates up to 10Mbps.

And progress will continue. Release 6, expected to be completed in middle of 2003, will add another band of new services like multimedia broadcasting, push services, WLAN interworking, digital rights management, speech recognition, identity portability and presence management. 2005 will see many of these introduced into commercial 3G networks.

By this time, 2005, the European Union stipulates that all 3G networks in member states must have already covered 80 per cent of their population.



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Key factors in UMTS development - WCDMA most natural migration from GSM - Designed for rich data content and different classes of services - More spectrum for voice - Continue GSM’s global roaming and interoperability - Wire-free world replacing wired world - Interoperable standards, applications and value added services - Encapsulates vision of global wireless village

Evolution of mobile data services - Speed of SMS uptake comparable to Internet boom - NTT DoCoMo’s Imode service sets example for innovative mobile content - MMS and picture messaging already proving successful - Mobile gaming blossoming in early adopter markets - 3G offers faster speeds and always on - More pervasive coverage than WLAN hotspots - Working towards interoperability with 3GPP2 - Application-level interoperability developing through OMA

Conclusions + Future Developments



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3G Mobile

Like WCDMA, CDMA2000 is not a single standard in itself. From CDMAOne (the 2G equivalent of GSM) through CDMA2000 1xRTT, which increases the voice capacity of the former by approximately 40% and allows data transfers speeds up to a peak of 144kbps, to CDMA2000 1xEV-DO which has a theoretical bit rate of 2mbps.

Cdma2000 is considered by the ITU to be 3G compatible, but this would require the implementation of a version of the technology called cdma2000 3xRTT. As only cdma2000 1xRTT, a narrowband version of the technology has in practice been implemented, the cdma2000 systems fall short of the requirements for 3G set by the ITU. The practical implementations of cdma2000 are comparable to GPRS and EDGE. Because of this, the forthcoming not yet commercially available 1xEV-DV is really the 3G equivalent to WCDMA as it utilises new spectrum.

This important difference means that the world’s first commercial 3G network was in fact based on WCDMA. NTT DoCoMo, one of the world’s most farsighted operators, launched Foma (Freedom of Mobile Multimedia Access), based on an early 3GPP standard version, commercially in Japan in October 2001 after many years of testing and development. Hot on DoCoMo’s heels was J-Phone, which opened its network in December 2002 based on the latest 3GPP standards.

It can appear at times that CDMA2000 is not facing the same teething problems with interoperability as WCDMA. But this is a misconception based on one of WCDMA’s qualities. As the largest mobile technology community, where open standards are a prime directive, it can take longer for the multiplicity of technology developers to agree all the specifications and their equipment to interoperate effectively, between networks, between handsets and between countries. And on top of 3G WCDMA interoperability there is also 2G-3G interoperability. WCDMA networks do not replace GSM networks, but interwork with them, preserving the huge investment made in 2G networks during the last decade.

WCDMA together with other GSM family of technologies GSM, GPRS, EDGE, is likely to account for over 80 per cent of the world’s 3G networks so global interoperability is a boon, and getting it right first time is imperative. Economies of scale will let developers drive costs down, while users will be able to roam as easily with their 3G phones as they do today with their GSM phone but with the addition of next generation data services.

CDMA2000 – an alternative route to 3G

1998 1999 2000 2001 2002

First 3G call/NTT DoCoMo

First WCDMAcall throughPSTN

3GPP definesbuilding blocksfor a 3G service

First L3 3G AMRcall (R99/Dec ’00standard level)with commercialnetwork andterminal

Nokia upgradesits 3G WCDMAnetwork tocommercialstandard level,Rel99/Jun ’01

First 3G WCDMAcall based on3GPP standard

World’s first dualmode handset forWCDMA andGSM/GPRSnetworks(Nokia 6650)

Nokia and VodafoneOmnitel carry outthe world ’s first callin 3GPP R4compliant corenetwork

WCDMA call handoverdemonstrated tocommercial VodafoneOmnitel GSM network

First 3G WCDMApacket data call(Rel99/Jun ’01standard level)

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