South America is latest focus for growth

Two weeks from now in Cannes, France, the giants of the mobile phone industry will gather at one of the biggest and most prestigious events on the cellular phone calendar - the GSM World Congress. Deals may be done, but the bottom line of the event is a celebration of the dominance that global system for mobile (GSM) enjoys. There are more than 130 million GSM subscribers - predicted to grow to 300 million by the end of next year. The mainland boasts the highest number of GSM users of any country, with most of its 23 million subscribers using the technology, and it may not be long before every mobile-phone subscriber there uses GSM. The popularity of the system is in no small part due to the way it was developed as a system from the beginning, designed to 'roam' countries and service operators. At the centre of ensuring the smooth process of roaming and helping to feed back into the development of the standard is the GSM Memorandum of Understanding (MOU) Association, which has 323 members in 129 countries. It is an organisation that has seen big membership change since inception. Initially Europe dominated, but the bulk of the GSM users now are in Asia, while the manufacturers remain dominantly European. The chairman of the Dublin-based association is Richard Midgett, who works for Hongkong Telecom mobile services as general manager of international business development. 'It has been a challenge, as the organisation grows, to maintain communications between the members and enable us to identify common goals and objectives,' he said. The association exists primarily as a conduit between service providers and manufacturers. By feeding back ideas into the organisation's different bodies, service operators can tell the likes of Ericsson, Nokia, Motorola, Alcatel, Lucent, Nortel or other equipment providers what they want in terms of new functions. Increasingly though, the organisation is looking to promote GSM as the world standard. 'Until the past year or two we had zero activity in promotion. GSM sold itself. It spread and grew quickly,' Mr Midgett said. 'All we had to do was provide information to new operators.' But one of the developing earnings streams for GSM providers is revenues from 'roaming' charges. The more countries that have GSM, the greater the ability to increase roaming revenues, Mr Midgett said. 'What the membership wants is the spread of global roaming. We want at least one operator everywhere in the world; and we prefer more than one operator so we have competition within each country.' The organisation's latest focus is on South American countries, where regulators and operators are considering which technology to choose for the next phase of cellular deployment early in the next decade. The thorn in the GSM side has been the United States, which was late to switch to digital technology and doggedly maintained a preference for US developed D-Amps or CDMA technology. The US always has been looked on as a black spot in global roaming terms because of this, but the situation is changing. Mr Midgett said the MOU association had 26 members in North America as operators chose to start deploying GSM at the 1900MHz frequency. Most key North American cities now are covered with GSM networks. Of course, this still means that GSM users in Asia, who predominantly use GSM at the 900MHz and 1800MHz range, cannot roam with the same handset as they can across Europe and Asia/Australia. However, dual-band or even triple-band handsets soon will be fairly commonplace, allowing seamless roaming between these frequencies and areas. One of the more prickly issues facing the mobile-phone world is the third-generation services, which will deliver high-speed data rates allowing speedy Internet and on-line access for mobile users. Many governments plan to issue these as a new round of licences as the spectrum on offer will be different to those now in use. Here, the association is active in trying to convince governments that third-generation services should not be seen as a new set of licences. 'It makes economic sense for the current operators to build the networks,' Mr Midgett said. 'Third generation is an evolution. For operators it represents new and better ways to deliver services which we could not do with the spectrum we have.' The argument is that customers will want both these new services and the existing coverage and roaming of GSM. The way to achieve this is to mix the existing GSM networks with third-generation services in the more densely populated areas and business centres where they are likely to be needed most.