Consumers to drive need for 4G networks

Mobile consumers will steer the direction of next-generation mobile networks with their demand for personalized mobile services and multi-user applications.

COMMUNICASIA, SINGAPORE--Even as the industry tussles over which technology will drive next-generation mobile networks (NGMNs), one market player reminds that ultimately, it is the consumers who have the final say.

Donglin Shen, vice president of wireless technology at ZTE USA, put it: "Do not forget that it is the consumers who finally pay the bills for NGMNs. Hence, it is a consumer's market." ZTE USA is a subsidiary of ZTE, China's largest listed telecoms manufacturer.

Speaking at a conference track at this week's imbX show, Shen said consumer demand for a variety of mobile services will drive the need for NGMNs, which will be powered by technologies faster than today's 3G networks. That is, going beyond current, and competing, 3G technologies including HSPA (High Speed Packet Access) and EVDO (Evolution Data Optimized), he said.

The mobile phone, or what Shen termed "mobile terminals" will become more like "personal assistants for consumers", where their mobile phones will be used as a mobile office, for business purposes, to engage with communities, and to serve as an entertainment channel.

These mobile consumers will need personalized network services and require wider bandwidth to support multi-user applications.

Finding a market in rural communities

Hanis Harun, Asia-Pacific executive director of telecommunications industry practice group at The Nielsen Company, said 70 percent of the next 1 billion mobile customers will be from rural communities.
In China, for example, 750 million people (58 per cent of the population) live in rural China, with a corresponding mobile penetration rate of 12 percent. India's rural community clocks at 800 million (73 per cent of its population), with a mobile penetration rate of only 5 percent.
Harun said companies must keep in mind that rural consumers should be treated differently from urban users. Rural consumers usually have low awareness of value-added services offered by mobile operators, and may need more assurance from service providers as they are committing a higher portion of their incomes to subscribe for mobile phone services.
There are also likely to be language and cultural diversities across rural regions, Harun said, adding that Nielson's insights are based on interviews with 20,000 mobile phone owners in each country every year.
Industry players looking to tap rural markets should offer applications and services that compensate for the poorer infrastructure and resources in these areas, she said. For instance, Nokia worked with the Bhaskar Group in India to deliver vernacular news portals with content in four dialects.

Shen predicted that 3G LTE SAE (Long term evolution, System Architecture Evolution) will be the network technology to deliver these mobile services desired by consumers. "LTE SAE is backed by the mobile industry. It will be the mainstream of broadband data in future," he said.

He added that HSPA+, an enhancement of HSPA now under trials, is not a mandatory step for evolution to 4G networks.

While it meets intermediate needs of the market, Shen said it requires an unnecessary level of investment for operators, which will need additional hardware upgrades to support MIMO (multiple input, multiple output) antenna technology.

Shen also downplayed the prospects of mobile WiMax and UMB (ultra mobile broadband). WiMax, he said, was a "vendor-driven technology that is good for fixed wireless applications", while UMB was "similar to LTE but has [garnered] no commitment from operators".

He explained that several mobile industry players and operators are making moves to migrate to LTE/SAE technology--even though the standards have not been completed. Japan's NTT DoCoMo, for example, has begun testing its Super 3G network for mobile communications based on LTE.

Shen also highlighted the role of the NGMN Forum, an industry alliance dedicated to addressing technological and regulatory roadblocks en route to building a NGMN eco-system. These include cover coordinating spectrum utilization, intellectual property rights reforms, and mobile handset development and certification process.

But, just as they will drive the move to next-generation mobile networks, consumers will also a big challenge for operators moving into these 4G networks.

Describing the predicament as a de-coupling of traffic and revenues, Shen said high traffic on networks--as mobile users access more wireless data services--does not necessarily translate into high revenues.

"People want to use more mobile services, but they don't want to pay a high price," he said.

Billy Teo is a freelance IT writer based in Singapore.

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