Lothar Pauly has been a member of the managing board at the Siemens Information and Communication Mobile Group since April 2000. He has helped Siemens to gain worldwide success with its mobile phone standard GSM. Today, the group has more than 180 customers in 90 countries. Under Pauly’s supervision Siemens mobile managed to reach third place amongst mobile networks suppliers. Pauly, who was born in Bad Homburg, belongs to those pioneers who initiated the UMTS era in the late 1990s by talking with regulatory authorities. The business studies graduate has been with Siemens since 1987. Pauly worked as sales director for various telecommunications segments in Indonesia and Poland before managing the business segment Mobile Networks between 1996 and 2000.
In some parts of the world mobile phone ownership is close to saturation. China, though, with its 1.26 billion population, is expected to have 500 million mobile users by 2008, many of these using third – generation (3G) ‘UMTS’ technology. UMTS is the 3G international standard that will provide ‘always on’ mobile voice and data for interactive applications and mobile business. China is betting upon TD-SCDMA technology to implement UMTS and provide important benefits to customers, operators and the economy.
The Future of a Mobile Civilization The triumph of the mobile phone is rooted in people’s basic need for immediacy and contact. Mobile phones meet this need by allowing users to make calls at any time and wherever they happen to be, without having to consider the distances separating them. The digitization of our private and working lives is one of the most radical changes to have taken place in recent times. Mobile telephony and the Internet are leading technologies symbolizing a massive, epoch-making transformation. What a few years ago only gladdened the hearts of experts and oddball enthusiasts now reaches deep into people’s everyday lives across the planet. The mobile communication wave has engulfed us, gaining a level of acceptance and spreading at a pace that has exceeded even the most optimistic predictions. And things are only just beginning. While in some parts of the world mobile phone ownership is already close to saturation point, elsewhere – in China, for instance – there is still enormous market potential to tap into. As the biggest national telecommunications market in the world, with a population of 1.26 billion, it goes without saying that the People’s Republic of China is a country of no little significance when it comes to discussion of mobile radio. Over 185 million GSM (Global System for Mobile Communications) customers already make up the largest GSM population in a single country, and by 2008 the number of mobile customers in China is expected to reach over 500 million. The mobile radio sector in China is therefore one of utmost importance, not just for operators and service providers but also for the regional economy. 3G and UMTS Building upon the success of GMS, the new generation of mobile radio is already a reality. Voice is now joined by data and image transmission. The key element here is the mobile accessibility of the Internet. Operators are faced with the challenge of migration from voice to data centric technology. It is thus a crucial period for the whole sector; the excitement and potential of the mobile Internet brings with it fresh challenges and new difficulties. Technology has had to adapt in order to meet the needs of the consumer, and the needs of today’s mobile radio consumer are constantly changing. Within the 24 – hour daily cycle we spend an average of 8 hours working, 8 hours sleeping and 8 hours on leisure activities and other things we like to do; during these periods we’re often out and about, on the move or, to put it another way, mobile. Making a firm distinction between business and private life is no longer possible. Mobile communication therefore no longer has the one-dimensional meaning of not being tied to individual locations for voice telephony. A performance enhancement is in the offing that will lead to more convenience and greater efficiency. As a transmission standard of 3G mobile radio, UMTS (Universal Mobile Telecommunication System) will free us up from resource bottlenecks in network infrastructures, give us access anytime and anywhere to flexible voice, data and video communication, and so generate added value through innovative services. UMTS and the third mobile radio generation are in the process of establishing no more and no less than a new, mobile civilization able to liberate itself from the restrictions of time and space. Present-day communication technologies however, are not up to the task of meeting the future provisioning needs of a mobile society. Second - generation mobile communication has its limits even in its so-called ‘2.5G’ expanded form. 3G communication and UMTS will make mobile business a reality with an innovative uniqueness. UMTS/TD-SCDMA: China at the Forefront UMTS (Universal Mobile Telecommunication System) is the generic name given to a totally new performance dimension in mobile radio. This 3G standard, developed in Europe and approved by the European Telecommunication Standards Institute (ETSI), offers (depending on the equipping level) transmission rates that are 40 to 200 times faster than today’s digital mobile radio networks. To achieve global harmonization in 3G mobile communication, the International Telecommunications Union (ITU) has combined the 3G systems proposed by Europe, Japan, and the USA into IMT-2000, as a ‘family of 3G standards’. Using UMTS, the speed of transmission can reach up to two megabytes a second. At the end of 2001, the first two UMTS networks were put into operation. One is located on the Isle of Man, the other in Monaco. In this way, UMTS can be tested under real conditions, whilst further commercial development means that the level of testing the two networks receive will increase. In the case of UMTS, the overall goal was to create the most unified, global standard possible for mobile communication to enable travellers with UMTS telephones to be able to use these phones anywhere in the world. The new standards have also been designed to ensure that network operators can migrate to the new standard as inexpensively and simply as possible. In terms of devices, the goal has been to make it possible to continue to use today’s mobile phones for as many years into the third generation as possible. Since 1998, the China Academy of Telecommunications Technology (CATT), a research institute of the Chinese Ministry for Information and Industry which employs 20,000 people, and Siemens have been working on an original 3G mobile network transmission system. The result of the development cooperation is a new mobile standard called TD-SCDMA, short for Time Division Synchronous Code Division Multiple Access. It combines the SCDMA technique developed by CATT with TD-CDMA/TDD developed by several manufacturers. TD-SCDMA is, like W-CDMA (Wideband Code Division Multiple Access), an integral part of the UMTS-Standard. TD-SCDMA and W-CDMA, which have both been developed from the GSM standard, complement one another and are fully compatible. The new standard gives direct access to 3G mobile radio. The International Telecommunication Union (ITU) has already acknowledged the standard as an official, fully-fledged 3G technology. TD-SCDMA has also been adopted by 3GPP as air interface for UMTS, securing compatibility and continuing development within 3G. More than 300 companies, including manufacturers like Siemens, Huawei, Motorola and Nortel, as well as providers China Mobile and China Unicom, are lobbying for its promotion. The recent (November 2002) allocation of frequencies (a total of 155 MHz has been scheduled for TD-SCDMA) by the Ministry of Information Industry (MII) was an important step as capacity, or even maximum speed, is generally dependent on the frequency range available. This, clearly, is positive proof that TD-SCDMA will play a major role in China’s 3G market. The recently formed Chinese industry alliance for the development of TD-SCDMA products is regarded as equally positive. This was set up, also in November of this year, at the instigation of the MII, the Ministry of Science and Technology (MOST), and the State Development Planning Commission (SDPC). Therefore, with China as the pioneers, TD-SCDMA has the potential to develop into a worldwide standard. Benefits for customers The benefits to customers of a ‘wireless world’ consist in the intelligent context-related combining of previously separate functionalities. There is no limit to the multiplicity of applications. A few examples should suffice here: machines can automatically report faults or the need for a maintenance check to the responsible service units, while empty photocopiers, for example, could trigger a process for reordering toner cartridges. By linking up meteorological data and the auto-location systems used in mobile radio networks it will be possible to warn mountain hikers, people engaged in hobby sports and drivers of convertibles about an approaching local storm on their mobile phones. People listening to music on, for instance, an Internet radio broadcast can have the title and details about the artist shown on their mobile phone’s display. At the same time, appropriate music CDs can be offered or songs purchased and downloaded at a click. A ticket service can display the artist’s next tour dates and allow users to book concert seats straight away. The travel ticket to get there can be ordered online through a travel agency or transport service office. Mobile radio users can enjoy new click-through experiences. Users are only clicks away from the ticker service giving share price details about a company that has placed a notice in the financial press, and from there to a broker’s trading desk. It will be possible for mobile phones, handsets, and mobile terminals of the UMTS generation to be kept permanently ready for operation – ‘always on’. In the coming years, paying with a mobile phone will develop into a billion – euro industry. Specialists say that ‘Mobile-Payment’ has a bright future and are convinced that it will soon be as easy and natural as paying with a credit card. Handsets are already equipped with basic technologies for secure user authentication (SIM card, PIN identification). Mobile phones are considered the terminals predestined for cashless shopping and a wide range of transactions (ordering, booking, banking and brokerage, signing and authorizing). Mobile phones of the third mobile radio generation are uniquely qualified for use as personal devices that can be used anytime and anywhere for universal, secure, and legally binding transactions. What we have, up until now, has been areas of the ‘real world’ that we have had to deal with separately, namely obtaining, arranging, and transacting information, which have come together in the UMTS infrastructure and revolutionize the mobile world. Benefits for the operators The new transmission standard has clear advantages: TD-SCDMA offers a smooth and seamless way of introducing 3G mobile networks and services. The TD-SCDMA systems can be added onto existing GSM-networks, which allow the simple and cost – effective transfer from 2G to 3G network services. The two services are fully compatible and will operate in tandem during the transfer to 3G. The technical risk when starting from an existing and well-known GSM network is considerably reduced. Combining a 3G air interface with a stable and established GSM infrastructure shortens time to market for 3G services. This speeds up implementation of new user applications and quickly makes Mobile Internet a reality. The total migration cost from 2G (GSM) to 3G is considerably reduced, compared to other 3G standards. In addition, the investment is spread out over a longer period of time. The total investment risk is reduced and at the same time investment in already purchased GSM infrastructure is secured, while the GSM-like principle of operation leads to fewer operational costs. This is especially useful for countries which have newer GSM networks and are either not willing or incapable of making the huge investments necessary with other 3G technologies. Areas with geographically large networks, making simultaneous and transparent operation of 2G and 3G networks a basic requirement, will also benefit from this feature. These certainties and reductions in risk and cost are important, especially at a time when operators are being forced to cope with high debt, price reductions and consolidation. Benefits for the economy Several hundred million euros have been invested in developing TD-SCDMA and a further 50 million will be invested in the current fiscal to vigorously advance the standard’s development. A TD-SCDMA test network operated jointly by Siemens mobile and CATT/Datang in Beijing since October 2001 is working perfectly. Two more test networks are now being set up in the Chinese cities of Chongquing and Chengdu. The partners have demonstrated the smooth functioning of both data and voice transmission in a number of test runs presented to representatives of the Chinese government and mobile radio operators. Chinese mobile radio operators could be equipped with a TD-SCDMA network infrastructure as early as mid – 2003. The successful introduction of 3G technology will, of course, attract new business interest, encourage regional development and generate huge revenues for the local economy, especially given the potential of the Chinese market. The value of the 3G equipment in China is estimated between $3.2 and 8.9 billion for the year 2002 to 2005 cumulated – the potential for social, economic and regional growth, based on the success of the third generation of mobile radio in China, is huge and we are committed to seeing that potential blossom, and become reality.