Impact of the UMTS Experience for Forthcoming Network Generations

Seminar Paper, 2003

27 Pages, Grade: 1,7 (A-)


Table of Contents


1. Introduction
1.1. Problem Definition and Goals of the Study
1.2. Outline

2. The Evolution Path to 3G Cellular Networks from a Historical Perspective
2.1. First Generation - The Stone Age of Mobile Communications
2.2. Second Generation - Entering the Mediaeval Times of Digital Mobile Communication

3. Third Generation - Stepping into a new Generation of Mobile Communications
3.1. User Expectations and Mobile Service Provider Promises of 3G Systems
3.2. Organizational and Technological Requirements of 3G Systems
3.3. Billions for Fresh Air - Licensing of Frequencies
3.4. Implementation and Roll-Out of 3G Systems
3.5. Comparison between User Expectations and the actual Experience

4. Fourth Generation - The Future of Mobile Communications
4.1. How to define 4G?
4.2. The Idea behind 4G
4.3. Credibility of Mobile Provider’s Promises
4.4. Current State of 4G Technology Research

5. The x.5 Generations - Technological Milestones or Human Failure at Technological Challenges
5.1. 2.5G - The next step towards Delivery of Multimedia Content to Handheld Devices or just “UMTS-light”?
5.2. 3.5G - Is an improved Version of 3G necessary to offer Features that we were promised by UMTS itself?

6. Using Seven League Boots to jump from 2.5G to 4G?

7. Conclusion

Index of Appendices




Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

1.1. Problem Definition and Goals of the Study

In the year 2000 when billions of Euro were spent for licenses to be used in Third Gen-eration (=3G) mobile phone networks, operators promised customers a large variety of new services and high speeds for mobile internet access in short future. Now, three years later, the big picture looks different. Even though the number of subscribers to mobile services increased to 1.3 billion users worldwide using primarily Second Gen-eration (=2G) networks (Cellular Online, 2003), there seems to be customer skepticism towards 3G due to several reasons that are going to be analyzed in this paper. Mobile operators estimated a huge demand in data services and consequently spend lots of money trying to provide these services, but customer demand lags behind. (Slodczyk, 2003) This might not only affect the launch of 3G, but also impact upcoming Fourth Generation (=4G) networks. 4G is “often referred as ‘digital convergence’ (Koljonen, 2001, p. 1) which means that it will be able to offer a unified communication platform for a large number of devices in heterogeneous environments at high speeds. 3G which is marketed as Universal Mobile Telecommunications System (=UMTS) in Europe, was regarded as a first step towards delivering multimedia content using a universal standard around the world. However, current development shows some stumbling blocks that might negatively impact the acceptance of UMTS. This paper will analyze the evalua-tion of mobile services from the beginning on with a special focus on 3G and 4G.

1.2. Outline

This paper evaluates the impact of the UMTS experience for forthcoming network gen-erations. Therefore, it is necessary to show the development of mobile networks from the beginning on. During the evolution process, formerly analogue networks trans-formed to digital ones with more and more services that added value to customers’ life and consequently became very popular. In these days, mobile operators are trying to migrate their second generation networks to third generation which was supposed to be a globally accepted standard offering high data transfer speeds. However, an in-depth look at the technical and financial background of the 3G implementation shows that provider promises and user expectations differ. This will not only affect 3G, but also upcoming network generations like 4G. In the following, continuous delays in the 3G launch and advanced research in 4G technology in combination with upgrades to exist-ing 2G network infrastructure are discovered as threads questioning the success of 3G.

2. The Evolution Path to 3G Cellular Networks from a His- torical Perspective

2.1. First Generation - The Stone Age of Mobile Communications

The first generation of mobile networks (=1G) were established in the 1950s. These networks were not connected to a country-wide backbone network, but only covered a limited geographical area of one cell site. Roaming, which means using a mobile hand-held device in another network, was not possible in these days. Moreover, these isolated applications were not connected to each other and a human operator was required to manually establish connections between the caller and callee. This proved to be very costly and unsatisfying. Therefore, telecommunication companies started to connect those islands of mobile coverage. In Germany for example, the so-called “A-Netz” (1958 - 1977) was the first analogue mobile network which covered 80% of the Ger-man territory when it had been established. The “B-Netz” (1972 - 1994) was the next step in the development and allowed self-dialing which made operators redundant. In 1986, the “C-Netz” was launched which used first simple multiplexing techniques for more efficient frequency use and allowed data transmissions via modem of up to 2400 bits per second (=bps). In 1992, almost area-wide network coverage was achieved by using about 1900 transmitters. End of 2000, the “C-Netz” was finally switched off. (Schreiber, 2002, p. 36-40)

2.2. Second Generation - Entering the Mediaeval Times of Digital Mobile Communication

First Generation mobile networks offered a very valuable service in these days when they were set up but customer demands and ongoing globalization urged mobile service providers to offer new services and to cope with future growth. To achieve this, it was necessary to replace analogue transmission techniques that were used in 1G networks by digital ones which did not only offer higher voice quality, but also more efficient frequency use, compatibility with landline communication systems, error correcting, in-terference resistance and lower costs for installation and use. (Walke, 2001, p. 135-139) In 1982, major European telecommunication companies decided to develop a pan-European cellular network. The so-called working group ‘Groupe Speciale Mobile’ was established which set the standards for this network. In 1991, the first Second Genera-tion digital networks were set up in several European countries using a frequency of 900 Megahertz (=MHz). Telekom D1 (today: T-Mobile) and Mannesmann D2 (today: Vo-dafone) are two examples of 2G networks that were launched 1992 in Germany. However, the development of the Global System for Mobile Communication (=GSM) stan-dard continued. This led to the definition of the Digital Cellular System (=DCS) 1800 standard which was used by E-Plus and Viag Interkom (today: O2) to provide services similar to GSM 900 but using a frequency of 1800 MHz. (Duque-Antón, 2002, p. 63-64) To use the limited frequency band efficiently, a combination of the multiplexing techniques Time Division Multiple Access (= TDMA - using a very short time slot only on a certain frequency) and Frequency Division Multiple Access (=FDMA - using only a small band of the available frequency) was used.1 European mobile phone users were now able to use their devices not only in their home country, but also in other European or international countries which used the GSM/DCS technology. However, it was nec-essary to have a mobile phone that was capable of using the 900 MHz or the 1800 MHz band. Only so-called Dual-Band phones were able to use both network types with either of these European standards.

But there was also unattached research in 2G both in the USA and in Japan. Conse-quently, different 2G systems were installed in these countries which were not compati-ble with the European GSM standard. Even though some of them used similar multi-plexing techniques, the network infrastructure and frequencies are different. So it is not possible to use these handsets in other network environments. In the USA, the Code Division Multiple Access Revision One (=cdmaOne) standard is used which is specified in IS-95 using software codes to extend bandwidth whereas in Japanese Personal Digital Cellular (=PDC) only used TDMA in their mobile networks. Due to different identifica-tion processes (e.g. SIM-Card for GSM phones), it was not possible to built devices that could be used in all these different network environments. (Lescuyer, 2002, p. 1-49)

2G networks were designed primarily for voice communication. The internet boom in the late 1990s and new multimedia applications created a demand for more bandwidth for data communication not only on landline connections, but also for mobile devices. This could not be handled with the initial 2G definitions that only allowed a bandwidth of 9600 bps in GSM systems. Therefore, new ‘phases’ of GSM were developed which did not only offer more bandwidth using techniques like General Packet Radio Service (=GPRS) or High Speed Circuit Switched Data (=HSCSD), but also new services like Wireless Application Protocol (=WAP) for mobile internet access, Short Message Ser-vice (=SMS) or Multimedia Message Service (=MMS). The first and second ‘phase’ of GSM (1991/1994) mostly covered connection-oriented services whereas phase 2+ also defines connection-less (packet-based) services and transmission technologies which can be regarded as another step forwards the next generation in the evolution of mobile communications. (Duque-Antón, 2002, p. 63-74)

Amongst the competing 2G technologies, GSM is the most popular one with about 880 million users worldwide in August 2003 whereas only 164 million people subscribed to Code Division Multiple Access (=CDMA) based networks and another 120 million people used TDMA-based technologies for mobile communications. GSM was intended to be a European-wide standard but it was that successful so nowadays it is used in 187 countries worldwide (Cellular Online, 2003).

3. Third Generation - Stepping into a new Generation of Mo- bile Communications

3.1. User Expectations and Mobile Service Provider Promises of 3G Systems

2G mobile systems have proved to be a real success and gained wide acceptance amongst people both in developed and in developing countries. Declining prices and a large variety of services, especially the so-called killer-application SMS contributed to the success of mobile phones and raised expectations of future generations and services. Data services are supposed to be the new cash-cows of mobile service providers in the next decade. According to research by the UMTS-Forum (2002, p. 3), data or non-voice services will account for 50% of mobile operator’s revenues in 2005/6 in comparison to 2001 where 90% of their revenue was generated by voice services. The number of SMS sent per user rocketed and made SMS to the so-called killer-application in 2G systems with 366 billion messages sent in the year 2002 worldwide (Cellular Online, 2003).

This leads to the question of which types of services users expect in 3G systems and what the future cash-cows of mobile service providers will be.

Being asked about the most important service consumers would like to use with 3G is surprisingly still SMS. SMS were mentioned by 81% of all people asked followed by local news like weather or traffic that were useful to 71% of them. About 70% of all surveyed people are looking forward to use their 3G cellphone for picture messaging and video conferencing followed by messaging and news. Watching TV or Hollywood movies on the mobile phone does not seem to be what people are willing to pay for (45%). (Hutchison 3G Austria, 2003)

This might be slightly surprising for mobile operators since most of these services are also possible using existing 2G network infrastructure. When evaluating whether to in-vest in 3G or not, mobile service providers focused on technical solutions to deliver broadband content to mobile devices. When landline broadband internet became avail-able, experts saw the “destiny of the Internet […] to transmit Hollywood movies into our homes” (Thackara, 2001, p. 48). Consequently, mobile service providers expected a huge demand for small video clips or even complete Hollywood movies on small screens of cellphones as well. Many of their cost estimations were based on large data transfer volumes. That is why the key to success of 3G technologies like UMTS will be applications with bandwidth requirements at the upper end of the available range and those which use the new technologies that are offered by 3G. (König, 2001) Figure 1 shows the different services that were available in different network generations in a roadmap.

Electromagnetic radiation of cellphones and transmitters has been an issue of controversial discussion in the past. On the one hand, customers expect high voice quality and large area coverage but on the other hand, they fear the radiation of electronic devices. In Germany, four 2G service providers set up about 50,000 transmitter stations, another 40,000 will be required for the 3G migration. However, 3G uses another technology which minimizes the impacts of mobile communication, both when establishing a connection and during the call.2 (Gneiting & Demmelhuber, 2002)

3.2. Organizational and Technological Requirements of 3G Systems

To offer new 3G services, a new network had to be implemented that added another layer to the existing 2G networks. This was done as a fallback to 2G services wherever 3G coverage was not available. The basic framework for 3G services has been defined in the International Mobile Telecommunications at 2000 MHz (=IMT-2000) standard by the International Telecommunication Union (=ITU). Since there had been difficulties with many different frequencies used in 2G and different multiplexing methods, the aim was to completely standardize 3G services. (Schreiber, 2002, p. 79-111) However, this proved to be difficult as some frequencies were still occupied for other purposes (see Figure 2), especially in the USA.

In addition to that, three different ‘types’ of 3G evolved:

- In Europe, Wideband Code Division Multiple Access (=W-CDMA) has been chosen as the evolution path from GSM to 3G services and adds another layer using Fre-quency Division Duplex (=FDD) and Time Division Duplex (=TDD) multiplexing techniques. W-CDMA based 3G networks are marketed under the brand name UMTS. x In Asian countries, Time Division Code Division Multiple Access (=TD-CDMA) has been favored to be used in 3G systems using only TDD multiplexing techniques in a narrowband CDMA environment (called Universal Wireless Consortium UWC-136). x In the USA and other countries that formerly used CDMA-based 2G services, Code Division Multiple Access - Revision 2000 (=CDMA2000) has been chosen as the new air interface instead of W-CDMA because it can co-exist with existing systems using FDD and TDD multiplexing techniques as well. (Nicopolitidis, Papadimitriou, Obaidat & Pomportsis, 2003)

Nevertheless, about 90% of the 110 operators having granted a 3G license until August 2002 decided on W-CDMA technology for their core networks. (UMTS-Forum, 2002) In addition to different technologies, cell site sizes in 3G environments differ from 2G networks. 3G uses four types of cell site covering areas of different sizes:

- Pico-Cells have a radius of only some 10 meters, but offer a data transfer speed of up to 2 Megabit per second (=Mbps) at low mobility like at hot spots
- Micro-Cells have a radius of some 100 meters. They offer data transfer speeds of up to 2 Mbps at hot spots or within business districts in large cities
- Macro-Cells have a radius of approximately 5-20 kilometers. Data transfer speeds are up to 384 Kilobit per second (=kbps) which is also available at high traveling speeds. x World-Cells, Umbrella-Cells or Hyper-Cells have a radius of up to several hundred kilometers, but only offer relatively slow data transfer speeds.

In the GSM world, sizes of cell sites differ between 900 MHz (GSM-900) based net-works and those using a frequency of 1800 MHz (DCS-1800). GSM-900 cells have a radius of 35 to 100 kilometers whereas DCS-1800 cells can only cover an area having a radius of 8 kilometers. (Wang, 2003; Teltarif, n.d. b) Consequently, a large number of new cell-sites have to be set up to offer 3G services which cause high costs for mobile service operators, in addition to technological challenges of the new system.

3.3. Billions for Fresh Air - Licensing of Frequencies

To start 3G services, mobile operators had to get permission to use the respective fre-quencies in countries all over the world. In most of the countries, there were more applicants than available licenses. To cope with that, some countries started a ‘beauty-contest’ but most of them auctioned the licenses. In Germany, licenses were auctioned in August 2000 to six (T-Mobil, Vodafone, E-Plus, O2, Quam and Mobilcom) auction-eers for almost 50 billion Euro, whereof the first four companies had an existing 2G network running in Germany.3 (BWCS, 2003) Having paid about 8 billion Euro, mobile operators in Germany found themselves in a difficult economic situation and the auc-tioning system and the requirement to cover a certain amount of the German population at a given date was heavily criticized. To avoid that in future, licenses for upcoming wireless technologies will be sold at ‘administration costs’ in all European countries. (Jaeger, 2002) However, the president of the ‘Regulierungsbehörde für Telekommuni-kation und Post’ that hosted the auction in Germany seems convinced that in the long run UMTS pays off for the companies. (König, 2002)

3.4. Implementation and Roll-Out of 3G Systems

The first commercial 3G network was launched in Japan by NTT DoCoMo in October 2001. At first, there was a run on 3G handsets, but sales dropped soon after the launch. (Teltarif, n. d. a) One of the reasons for such a slow start was the lack of sophisticated mobile phones, especially for those that supported a hand over between existing area-wide 2G networks and areas with 3G coverage. (Kuri, 2003) This might also be a rea-son, why the globally operating mobile service provider Hutchison only attracted about 520,000 customers in its five active 3G networks (Italy, UK, Australia, Sweden, Aus-tria) until mid of 2003. At first, Hutchison estimated one million customers just in the UK until end of 2003, but now the company forecasts the same target for all their exist-ing networks together. (Sokolov, 2003)

Another reason why consumers still await further development is because many services that were promised by 3G have become available in existing 2G networks with only minor upgrades. The impacts of this issue will be discussed in chapter 5.1.

3.5. Comparison between User Expectations and the actual Experience

By now, UMTS and the other 3G technologies turned out to be very disappointing to customers.


1 Further reading about Multiplexing Techniques: Walke, B. (2001). Mobilfunknetze und ihre Protokolle 1 - Grundlagen, GSM, UMTS und andere zellulare Mobilfunknetze (3rd ed.). Stuttgart: Teubner.

2 Further reading about electromagnetic radiation: Gneiting, S. & Demmelhuber, S. (2002). Strahleninferno oder Öko-Funk? UMTS und die Strahlendebatte. c’t. (CD-ROM).

3 Further reading about 3G licensing worldwide: BWCS (Pub.). (2003). 3G Status Report. Retrieved Sep-tember 08, 2003, from

Excerpt out of 27 pages


Impact of the UMTS Experience for Forthcoming Network Generations
European Business School - International University Schloß Reichartshausen Oestrich-Winkel  (Department of Information Systems)
Seminar, 7th Semester
1,7 (A-)
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ISBN (eBook)
ISBN (Book)
File size
583 KB
Impact, UMTS, Experience, Forthcoming, Network, Generations, Seminar, Semester
Quote paper
Claudius Benedikt Hildebrand (Author), 2003, Impact of the UMTS Experience for Forthcoming Network Generations, Munich, GRIN Verlag,


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