Evolution to 3G still bring opportunities to the changing industry

The Western European and some Asian markets have reached a very high level of mobile usage penetration. The same is true for the American market when considering moderate- to high-level spending customers. However, this does not necessarily mean that the growth in number of subscriptions will end, since there is still a large untapped subscriber potential in new markets as well as emerging applications such as machine-to-machine communication. To enable growth in already saturated markets with high penetration figures, the focus for future growth must be on making current subscribers use their telephones more, either by increasing the minutes of use from current voice-centered services or by offering new attractive data services.

Evolution to 3G still bring opportunities to the changing industry. Because the need for capacity and bandwidth will drive the requirements for efficient resource utilization, Ericsson asserts that the seamless network of GSM and WCDMA as one of the most valuable solutions for the future.

Existing GSM operators have several advantages. These include existing network and spectrum, as well as distribution channels. And above all, existing operators already have their own subscribers. Acquiring new subscribers is a huge expense to all operators, and the cost of churn is large. It is much less expensive to keep an existing subscriber than to acquire or “buy” a new one.

Today, most existing subscribers are GSM subscribers. The challenge for an existing GSM operator is how to evolve its 2G network to provide 3G services to subscribers. The key issue will be the ability to implement a quick, cost-effective 3G rollout while retaining profitability with current GSM business. Because based on the enormous success of GSM and the large number of customers using existing GSM networks, GSM investments will continue to be profitable for years to come.