Commercially launching in 1992 and eventually spreading over 200 countries, GSM had 970.80 million subscribers by 2003. Adding 180.30 million customers and posting 22.80 percent annual growth, GSM achieved 73 percent penetration in the worldwide digital mobile market last year. Touching the milestone of billionth customer made their evenings more sparkling in the exotic French Riviera.

GSM is considered as a second generation mobile technology. It offers secured conversation with limited data transfer through short message service (SMS). GSM crawls with 9.6 kilobits per second (Kbps) while third generation W-CDMA zooms with 2 megabits per second (Mbps) data speed. Transformation from GSM to 3G happens step by step.

General Packet Radio Service or GPRS is an important intermediary step in GSM's journey towards 3G. The industry has named GPRS as 2.5G technology. This packet-based technique transfers data up to 115 Kbps, using standard industry protocols like TCP/IP and X.25, in the GSM network. It is an evolution from "text only" SMS to Multimedia Messaging Service (MMS).

GPRS users, with their camera phones, exchange MMS - bundled with picture, audio and video contents. GPRS also allows accessing the Internet followed by handling real time professional applications like news-feeds, stock quotes, stock charts, portfolio tracking threshold-crossing alerts etc. Downloading new ring-tones and entertainments like mobile games for single and multiple players are also being offered by GPRS.

What are the impacts of GPRS? According to Håkan Eriksson, research and development vice-president of Ericsson, ring-tone alone became US$3 billion industry in 2003. Paul Merry, research analyst at ARC Group, said mobile music download was almost US$4 billion business last year and it will increase by 75 percent in 2008.

Industry analyst Datamonitor predicts MMS will generate US$11.30 billion revenue in 2006. Camera phones are playing a vital role in the growth of MMS. Strategy Analytics, another market research outfit, said 25 million camera phones were sold during the first half of 2003 and this figure will hit 65 million by the end of this year.

It may be noted that GSM/GPRS operates in 900 megahertz (MHz) frequency while W-CDMA runs on 2000 MHz band. Therefore, the migration of GSM to 3G requires different radio spectrum as well as new equipment for the radio network. An operator also needs separate license to provide W-CDMA service.

That has prompted the industry coming up with EDGE (Enhanced Data rates for GSM Evolution). It supplements the data-centric GSM/GPRS network with up to 384 Kbps speed. This is also the speed being offered at the early stage of 3G service.

Shortage of handset has been a setback for EDGE. But Texas Instruments, a US-based semiconductor provider, has announced the release of TCS 3500 chipset, which supports GSM, GPRS and EDGE altogether. It also works with Symbian, Microsoft, Linux and Palm platforms. Therefore, one handset with unified standards is hitting the market soon.

Using a GPRS/EDGE-enabled PCMCIA card, a laptop user can have high-speed access to internet from any outdoor location. It is a giant leap towards productivity in mobility. It is also where the mobile industry has locked horn with WiFi.

However, the W-CDMA or Wideband CDMA technology offers more futuristic services in addition to the above. Watching flawless live video image of the counterpart, while conversing, is its prime feature. Exchanging video clips, accessing to live audio and video with numerous multimedia features are the salient features of 3G. It promises to deliver 2 megabits per second (Mbps) broadband connectivity to your grip, laptop and desktop!

NTT DoCoMo, Japan's largest operator, has become the global flagship of 3G success using W-CDMA technology since 2001. More than 40 million Japanese, almost 90 percent DoCoMo customers, routinely access the internet with cellphones. DoCoMo posted 3.2 percent annual sales growth with US$ 45.30 billion in 2002-03 fiscal year. Its Freedom of Mobile Multimedia Access (FOMA) is the world's first high-speed data service for cellphones using W-CDMA standard.

DoCoMo had more than two million FOMA subscribers until January and it hopes to double that number within four months. Vodafone, the UK rival of DoCoMo, is still struggling with just 111,700 customers and 5.60 percent penetration in Japan until 2003.

Five new FOMA handsets -- made by NEC, Panasonic, Fujitsu, Mitsubishi and Sharp -- will be the driving the growth. Each of this handset has 300 hours standby battery life, weighing from 115gm to 130gm. This is a monumental example of addressing the handset crisis by DoCoMo.

Carl-Henric Svanberg, president and CEO of Ericsson, underscored the importance of vendor-operator partnership. While addressing the media in 3GSM Congress, Carl-Henric said, "The vendor must work closely, as a committed business partner, to the operators from a very early stage".

Ericsson has the largest market share in mobile network equipment and it also holds most of the portfolios of essential patents for 2G, 2.5G and 3G technologies. Its CEO said the crucial prerequisites are now in place and 3G is taking off this year. "It is a vision about communication needs, satisfied with advanced technology and it is encouraging to see that this vision is now becoming a reality," he remarked.

Victoria Eklund, Ericsson's director of Marketing, said 10 percent of the worldwide GSM users are ready to use 3G. She said is not just selling connections rather customising the customer's needs in terms of high-speed multimedia communications.

Eklund said her company has provided the highest number of 3G infrastructure worldwide. "We consider the operators as our partners and we make sure they don't lose money while rolling out the 3G networks," she said.

Mats Olsson, president of Ericsson South East Asia, said, "The Malaysian and Singaporean regulators have been very methodical while issuing 3G licenses." He said Japan is already leading the global 3G race and other leading Asian economies will be equally successful. Mats said the affluent clients will initially use 3G but very soon it will proliferate.

W-CDMA is more than telephony. It is personalised multimedia communication with mobility. A market has to have a knowledge-based clientele to exploit the features of 3G. An operator has to have the required know how to segregate its network according to the market's diverse profile. That is the key issue to make a successful business case out of 3G.

The writer is a telecoms analyst