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Fonville, Cosmas, Erasmus University Rotterdam, The Netherlands,
Van de Heuvel, Eveline,, Erasmus University Rotterdam, The Netherlands,

There have been many different generations of data communication standards in the telecom
industry throughout the years. Nowadays we are in the third generation. With the introduction of
2G, the second generation, digital phone calls could be made and that was the beginning of
mobile internet. In this generation an extra generation has come up, called 2.5G. GPRS and
EDGE are mobile data standards in this generation. In the third generation we are using Internet
services like UMTS and HSDPA. The fourth generation is coming up and it is estimated that it
will start in 2010. In this generation mobile users will be using new standards, like WiMAX or
UMTS revision 8.
The mobile internet speed has already reached 2 mbps, a speed which is enough for viewing web
pages and running most applications on a mobile device. Why is the bandwidth being improved?
New applications are being developed to add more functionality to a device. However, most new
applications require more bandwidth. We discuss whether the applications drive the innovation
of new technologies or vice versa. We found out that most of the available bandwidth is far from
being fully used. It is hard for telecom companies to come up with a killer application which uses
enough bandwidth and is used by many people. A killer application is an application that is
ingeniously coded or unexpectedly useful. When the bandwidth was not fast enough, the
applications were a driver for the technology but now the technology meets the application
demands with ease. We can conclude that in the beginning (2G) the application was the driver
but with the evolvement of 3G and the speculation of 4G it is something else driving the
We have also found that fixed networks are driving the innovation of mobile networks. This might
sound a bit confusing because fixed networks and mobile networks seem to be very different.
However, there is a constant comparison of mobile and fixed network capabilities. The fixed
networks exist longer than the wireless networks and have always been faster. Some factors can
slow down the innovation of mobile networks. The factors found in this paper are: device
limitations, investments in hypes by telecom companies and the lack of good applications.

1.1 Research question

The research question that we are going to answer in this paper is:
What are innovations of mobile communication standards and their applications for telecom
We have also formulated two sub questions, namely:
• What is the past, present and future of different mobile communication standards?
• Why does innovation of mobile communication standards take place?
For answering these questions we have searched for a lot of information on the Internet and asked
questions at Vodafone and Ammeon, two telecom companies. There are many definitions of the
word innovation. We will use Schilling’s definition: ”The practical implementation of an idea
into a new device or process”.

1.2 Structure

Chapter 2 gives an overview of different mobile communication standards in the past, the present
and in the future. These standards give an appropriate perspective from which to view the
innovations and help to understand how they will be developed. Chapter 3 gives a view of factors
driving and limiting innovation of mobile communication standards. The effect of applications
and fixed networks on the innovation of mobile networks will be discussed. Finally, in Chapter 4
conclusions will be drawn and an answer is given to the research question and the sub questions.


Although this paper is about innovations for telecom companies, it is important to give an
overview of different communication standards in the past, next to the standards in the present
and the future. The overview of these standards gives an appropriate perspective from which to
view the innovations and help to understand how they will be developed. It will be easier to
understand where we are going if we understand where we have been. To help in that
understanding, this chapter will give an overview of mobile data standards and different
generations. Because there has been, and still is a large amount of different standards all over the
world, only the standards that we think are relevant will be discussed. We have also tried not to
focus too much on the technical details of the mobile standards, otherwise it would become too
extensive. For extra information it is possible to take a look at the sources in the last chapter of
this paper.
Before we had cellular phones there used to be mobile radio telephones like MTS (Mobile
Telephone System), launched in 1946, and IMTS (Improved Mobile Telephone System),
launched in 1962. Contrary to normal closed radio telephones, like radio telephones used by the
police or emergency services, these phones were connected to the public switched telephone
network and had their own telephone number[1]. Using this system was very exclusive. IMTS had
waiting lists of three years for those who wanted to make use of this service. These potential users
were literally waiting for other users to disconnect their subscription in order to get a mobile
telephone number and mobile phone service. This resulted in low sales of IMTS phones and
therefore they were very expensive: 2000 to 4000 dollars. The price of phone calls varied from
0.70 to 1.20 dollar and the monthly subscription charge started at 100 dollars[2]. These phones are

typically called the zero generation (0G) of mobile telecommunication. The mobile radio
telephones were mainly used by estate agents and celebrities.
In the early 1980s the first analog cellular phone made its entry, the beginning of the first
generation (1G). It could only carry voice traffic. However, each country developed its own
system. In America AMPS (Advanced Mobile Phone System) was developed, and in some
European countries, such as the UK and Ireland, TACS (Total Access Communication System)
was being used[3]. But in many countries the developed system was incompatible with the system
abroad. Once European inhabitants realized this, they started the Conference of European Post
and Telegraphs (CEPT) in 1982. During this conference they formed a study group called Groupe
Spécial Mobile (GSM). This group had the mission to develop a mobile system that was
compatible in Europe. Later on the acronym GSM would be changed in ‘Global System for
Mobile communications’[4].

2.1 2G

As stated in the introduction of this chapter, GSM study group was formed to develop a pan-
European mobile service. The system had to meet certain criteria such as support, compatibility,
low costs, speech quality and more. The first public operation of GSM started in 1991 and this
introduced the second generation (2G) or in full: ‘Second Generation Wireless Telephone
Technology’. The main difference between 1G and 2G is that 1G uses analog networks and 2G
uses digital networks. Because of the digital networks, voice data could be compressed in a much
more effective way compared to analog networks. Also did the digital systems emit less power
from the phones, which not only made it possible to create smaller cells, with antennas and
electronic communications equipment, but made phones also use less energy and cause less
health concerns. Some other advantages of digital networks are digital error checking and the
possibility to send and receive SMS and e-mail[5].
Next to 2G also the terms 2.5G and 2.75G have come up, but these terms are not officially
defined. 2.5G services enable data transfer over upgraded existing 2G networks because they use
package switched domains, which is normally used in 3G services, in addition to the circuit
switched domain. GPRS is an example of 2.5G. A protocol like EDGE is technically a 3G
network technique, but referred to as 2.5G or sometimes even 2.75G[6] because it has a data rate
of over 144 kbps but has slower network speed than usual 3G services.

2.1.1 GPRS

GPRS (General Packet Radio Service) is a mobile data service which improves wireless access to
networks like the Internet. Data packages are efficiently being transferred between mobile phones
and external data networks. GPRS data rates can go up to 128 kbps, so it is much faster than
conventional GSM which has a rate for data transmission restricted to 14.4 kbps[7]. GPRS is a
package switched service, so the data transfer is charged per kilobyte, contrary to the circuit
switched services which is charged per second. This means that the user can be online for a long
time and will only be billed for the transmitted data[8].

2.1.2 EDGE

EDGE (Enhanced Data GSM Evolution) has an increased data transmission rate and reliability. It
provides up to three times the data capacity of GPRS, namely 384 kbps. It allows for example
downloading video and music clips and e-mail on the move. Basically it is an add-on for GPRS
networks, that is why it is sometimes called EGPRS (Enhanced GPRS). Each phone with GPRS
can also use EDGE, but beyond GPRS, EDGE looks a bit more like UMTS. The difference

between GPRS and EDGE is that EDGE has a new modulation technique and new channel
coding which improves throughput and capacity, so higher data rates are possible[9].

2.2 3G

3G is the third generation of mobile phone standards and technology. The first 3G services were
introduced in 2002 in Japan and in Europe in March 2003. Because in many countries the 3G
network did not have the same frequency as the 2G network there were a lot of problems: many
countries had to build new networks and license new frequencies. A user should now be able to
have a wireless connection with the following rates:
• 144 kbps for vehicular traffic (driving speed)
• 384 kbps for pedestrian (walking speed)
• 2048 kbps for fixed environment (indoors)[7]
The EV-DO, W-CDMA (including UMTS) and HSDPA are the major technologies in use. With
the introduction of 3G also the IMT-2000 (International Mobile Telecommunications for the year
2000) has been set up by ITU (International Telecommunications Union). It provides a
framework which makes worldwide wireless access available by linking different systems. It
combines mobile technologies and fixed and mobile wireless systems.
W-CDMA (Wideband Code Division Multiple Access) is used in the UMTS system. It expands
CDMA, but is faster and supports more users. These systems are also unified in the IMT-2000.

2.2.1 UMTS

UMTS (Universal Mobile Telecommunication Systems) is faster than previously mentioned

services. UMTS enables Internet, e-mail, fax, e-commerce, music, video clips, and
videoconferencing, although user demand for video calls does not seem to be very high. Due to
the high speed rate this sometimes has a quality comparable to normal Internet. To enable
worldwide coverage there is wireless telephone for at home, on the office and satellite
communication. The 3GPP (third generation partnership project) has standardized different
classes for four types of traffic, sometimes referred to as Quality of Service (QoS) classes:
• Conversational class (voice, video telephony, video gaming)
• Streaming class (multimedia, video on demand, webcast)
• Interactive class (web browsing, network gaming, database access)
• Background class (email, SMS, downloading)[10]

The 3GPP explains the operation of the classes as follows:

“The main distinguishing factor between these QoS classes is how delay sensitive the traffic is:
Conversational class is meant for traffic which is very delay sensitive while Background class is
the most delay insensitive traffic class.”
Conversational and Streaming classes are mainly intended to be used to carry real-time traffic
flows. The main divider between them is how delay sensitive the traffic is. Conversational real-
time services, like video telephony, are the most delay sensitive applications and those data
streams should be carried in Conversational class.
Interactive class and Background are mainly meant to be used by traditional Internet applications
like WWW, Email, Telnet, FTP and News. Due to looser delay requirements, compare to
conversational and streaming classes, both provide better error rate by means of channel coding
and retransmission. The main difference between Interactive and Background class is that
Interactive class is mainly used by interactive applications, e.g. interactive Email or interactive

Web browsing, while Background class is meant for background traffic, e.g. background
download of Emails or background file downloading. Responsiveness of the interactive
applications is ensured by separating interactive and
background applications. Traffic in the Interactive class has higher priority in scheduling than
Background class traffic, so background applications use transmission resources only when
interactive applications do not need them. This is very important in wireless environment where
the bandwidth is low compared to fixed networks.”[11]

Table 1 shows an overview of the QoS classes.

Conversational class Streaming class Interactive class Background class

voice, video multimedia, streaming web browsing, e-mail, SMS,
telephony, video video, webcast interactive e-mail, downloading
gaming database access
most delay sensitive delay sensitive delay insensitive most delay insensitive
 better error rate  better error rate
- preserve time - preserve time - arrival of data is not
- request response
relation between data relation between data expected within a
entities of the stream entities of the stream pattern certain time
- preserve payload - preserve payload
content content
Table 1. Overview of different UMTS classes and their properties.

2.2.2 HSDPA

HSDPA (High-Speed Downlink Packet Access) is a high-speed data service feature introduced in
Release 5 of the UMTS standard, launched by 3GPP[12]. It is a technology which improves the
downlink performance of W-CMDA networks. This will result in higher downlink speed and
greater system capacity for GSM operators. HSDPA is a software based enhancement, it has a
more efficient way of implementing the Interactive and Background QoS classes, mentioned
above[13]. In April 2006, the first operator in The Netherlands started offering this service. Here,
HSDPA can reach a download speed of 1.8 mbps, three times as fast as UMTS, and this year it is
expected to double the download speed to 3.6 mbps. In a few years a speed of 14.4 mbps is
expected[14]. These increased data rates make it possible for providers to launch media-rich
applications and services. Consumers will be able to download high resolution digital images and
advanced multi-player games, for example. HSDPA is actually an element of HSPA (High Speed
Packet Access), alongside with HSUPA (High Speed Uplink Packet Access). Downlink and
uplink refers to the link from a satellite down to a ground station or receiver, or from a ground
station up to a satellite. In the future networks might be upgraded to Evolved HSPA, which
provides 42 mbps downlink speed[15].

2.3 Pre-4G

4G, an acronym for Fourth Generation Communications System denotes the next generation of
wireless communications. 4G will be the generation of wireless networks that will replace 3G
networks some time in the future. Although there is no formal definition of 4G, it is clear that it

will provide voice, data and streamed multimedia at any place and any time with higher data rates
than before. One of the terms used to describe 4G is MAGIC: Mobile multimedia, Anytime
anywhere, Global mobility support, Integrated wireless solution, and Customized personal
service. Because 3G is having some trouble getting deployed and meeting its promised
performance, 4G is developed by academic R&D labs to move beyond the limitations of 3G. 4G
will consist of various networks using IP as common protocol. It will have broader bandwidth,
higher data rate and the main concept is integration with all of the existing mobile technologies.
Adaptability of the applications and being highly dynamic are the main features for users. Some
of the pre-4G technologies are: UMTS revision 8, with LTE and HSOPA being part of it, and

2.3.1 WiMAX

WiMAX (Worldwide Interoperability for Microwave Access), a radio technology, is a new

standard, based on IEEE 802.16. It has recently (19 October 2007) been approved as an IMT-
2000 technology by ITU. The decision to approve WiMax as an IMT-2000 technology creates
opportunities for global implementation, to deliver mobile Internet. There are two different
versions: D and E. The D version is the fixed version, and is used to connect UMTS masts and
Wi-Fi hotspots wireless to a fixed network. In ideal circumstances it can reach a distance of 10 to
15 kilometers. The E version, also called mobile WiMAX, has a reach of only a few kilometers,
but if more consumers are living in one area, more masts are installed to offer good quality. It
also creates the possibility to travel more freely than with the fixed version, receiving it on a
phone, PDA or computer without losing the connection. Just like with phone calls it is possible to
enjoy uninterrupted communication in a moving car or train[17].
WiMAX is not yet applied on a large scale. There are some experiments running but there are no
large scale networks yet. On the countryside in Knegsel, between Eindhoven and the Belgian
border the first public network has been launched in May 2007. Earlier on the Kop van Zuid in
Rotterdam a commercial system was being used. Once the WiMAX market matures, WiMAX
and UMTS will be direct competitors. Consumers will have a wide range of broadband services
that offer an unlimited reach, such as mobile internet, VoIP and mobile television. The first
product that uses WiMAX has been made available. This is the Venture Fetish by Venturi
Automobile from Monaco[18].

2.3.2 UMTS revision Eight

3GPP LTE (Long Term Evolution) is a new project which improves the UMTS standard so that it
will achieve its future requirements. This includes improved efficiency, lower costs, improved
services and better integration with other standards which are being used at that moment. LTE is
not a standard but will result in a new version of the UMTS standard: UMTS revision 8. It has
mainly got extensions and adaptations of the UMTS system. Some targets of LTE are download
rates of 100 mbps, and upload rates of 50 mbps for every 20 MHz of spectrum. Another target is
co-existence with other standards, so a user can start a phone call or data transfer using an LTE
standard and when the coverage is unavailable continue on another standard, for example GSM,
GPRS, an older version of UMTS or other non-UMTS networks. The focus of LTE project is on
simplifying the architecture of the system, and making the transition from the existing UMTS,
which is a circuit and packet switched combined network, to an all-IP system[19]. It also improves
efficiency in using frequencies, so the system capacity will increase[20].

2.4 Standards in use

Nowadays we are still in the third generation, but it probably will not take long until we are going
to reach the fourth generation. Today, services like UMTS and HSDPA are the most common
standards for mobile Internet. Unfortunately it can never be sure if a technology will really be a
success, since some services, like UMTS do not have the results that were expected. The chance
of success is probably to a large extent determined by the number of applications which can apply
the technology, the price of the service and the applications, the brand awareness of the service,
user-friendliness, quality, ease of use and ease of switching to the new technology. Above this,
the desirable standards are sometimes hard to put into practice due to external factors, such as
legal, environmental, economical, social or technological circumstances. Even when these factors
are eliminated and the service has launched, it may not have optimal operation because it is
infeasible to gain perfect circumstances. E.g. the Line-of-Sight problem: electro-magnetic
radiation can only travel in straight lines, otherwise it leads to deviation or dispersion of the rays.
As it is possible for different mobile devices to receive Wi-Fi some users might not be interested
in these services.
Because WiMAX has recently been approved as IMT-2000 technology, it may not take long until
telecom companies will adopt this technology and apply it on a large scale.

2.5 Outline

There have been many different generations in the telecom industry throughout the years. The
mobile industry has started around 1946, when the first mobile radio telephone was launched. In
the early 80s the first analog cell phone made its entry. These periods are retrospectively being
called 0G and 1G. With the introduction of 2G digital phone calls could be made and that was the
beginning of mobile internet. In this generation there has been defined an extra generation called
2.5G. In this extra generation GPRS and EDGE came up. Nowadays we are in the third
generation in which we use internet services like UMTS and HSDPA. The fourth generation is
coming up and it is estimated that it will start in 2010. In this generation mobile users will be
using WiMAX or HSOPA as Internet standards. Table 2 is showing the evolution of the

Technology 1G 2G 2.5G 3G 4G
First design
1970 1980 1985 1990 2000
1982 1991 1999 2002 2010?
Analog Digital voice, Packaged Broadband IP-oriented
voice SMS data data up to 2 unlimited
Mbps multimedia
1.9 kbps 14.4 kbps 384 kbps 2 mbps 200 mbps
Table 2. Overview of different generations and their characteristics.

This part of the paper discusses why innovation takes place. The sub question answered here is:
“Why is there innovation of the mobile communication standards?” Considering the previous
chapter answers like ‘higher internet speeds’ and ‘higher application demands’ seem obvious.
However, the mobile internet speed is already at 2 mbps, a speed which is more than enough for
viewing webpages on a mobile telephone. What about the higher demands of applications? Are
there really applications demanding that much bandwidth?
During our stay in Dublin we visited two telephone companies who have knowledge of mobile
communication standards and they gave interesting views on why the standards are being
improved. This chapter discusses these answers and finally we give our view on this. Now follow
a short description of the two companies visited in Ireland.
Vodafone is the biggest supplier of mobile telecom world wide. Vodafone is derived from Voice
data fone. The company was founded in 1982 and yet in 1985 the first mobile phone calls were
made in England. In 2006 the company announced a big reorganization and defined three
divisions: upcoming markets, Europe, and new technology.
Ammeon, one of Europe's fastest growing technology companies, is a privately held consultancy
company headquartered in Dublin, Ireland. The company was formed in 2003 by a group of
telecommunication industry experts who held senior management roles within LogicaCMG,
Ericsson, Siemens, Nortel, PA Consulting Group and other leading companies. Ammeon is a
preferred supplier of services to a number of operators and has offices in the UK and US.
The first answer discussed is: “The applications drive the innovation of new mobile
communication standards”. New applications are developed to provide new functions to mobile
devices. A possible reason for this is to meet the demands of the customer or to add more
functionality to a device and see if the customer likes it. Most of the new applications require
more bandwidth. We research whether the applications drive the innovation of new standards or
vice versa.
The second answer discussed is: “The comparison of fixed networks to mobile networks drive the
innovation of mobile communication standards”. This can be a bit confusing because what do
mobile networks have to do with fixed networks? There is a constant comparison of mobile and
fixed network capabilities. Fixed networks have always been faster but the mobile networks are
developing at a high rate.
At Vodafone Ireland, we found out that the application of the innovation, like new mobile
communication standards, can be restricted. Higher speeds are good but most mobile phones,
even the new ones, cannot handle the maximum speed of the network. Also, most new standards
are not backwards compatible, meaning that you have to buy a new device to make effective use
of the new standard. So the mobile device itself can be to be a limiting factor. In this chapter the
limiting factors will also be discussed.

3.1 Applications

New applications are developed to provide new functions for mobile devices. The reason for
these functionalities to be added is because of a creative idea of developers or to meet demands of
customers. Most new applications have higher requirements of the phone and the bandwidth. The
phone has to be faster and there has to be more bandwidth. For the main topic it is useful to know
whether the demands of the applications drive the innovation of the mobile communication

In order to answer that question, first the applications made possible by the mobile
communication standards are. The vision is limited to the common applications only. The
following items show the common applications per standard.

3.1.1 2G: GSM

As mentioned in the previous chapter, the first digital network for mobile communication is
GSM. At the time it was launched, there were not many applications for mobile devices. The first
non-voice application made possible through this network is SMS. It offers the possibility to send
short text messages from one phone to another. SMS did not require a lot of bandwidth, its
maximum of 12.2 kbps was enough to send and receive text messages. A different application of
the GSM network is to use the mobile phone as a modem for a pc, making it possible to dial the
number of a server. This is exactly like the ‘old’ dial-in network for home personal computers.
However, direct access to the internet with the telecom provider acting as an Internet Service
Provider (ISP) was not available until GPRS.

3.1.2 2G: GPRS

With the arrival of GPRS direct internet access via the telecom company became possible. The
telecom company acted like an Internet Service Provider. GPRS is a technique developed only for
data transfer, not for voice traffic. As stated earlier, GPRS was a lot faster. The increase in speed
made Internet access possible on mobile devices through WAP (Wireless Access Protocol). WAP
is not the Internet as experienced on a personal computer. A description of WAP[21]:
“WAP is an open international standard for applications that use wireless communication. Its
principal application is to enable access to the Internet from a mobile phone or PDA. A WAP
browser provides all of the basic services of a computer based web browser but simplified to
operate within the restrictions of a mobile phone.”
WAP was the first step to Internet access on mobile devices. However, a WAP browser could
only show the webpages which were converted to the WAP standard. Thus, there was a
restriction in the pages that could be visited. This was necessary regarding the limitations of
mobile phones. They were incapable of viewing large webpages with a lot of pictures. The
phones were not fast enough and the screens were too small. Although the bandwidth of GPRS is
much better than the GSM network, it was not fast enough for the full content on most web pages.
SMS is also possible via GPRS and at that time another message service was introduced: MMS
(Multimedia Messaging Service). MMS provides the possibility to send pictures, sounds or even
a movie from one mobile phone to another.
Despite the fact that regular cell phones could not handle the Internet, other mobile devices like
laptops could. As mentioned in the previous sub-paragraph, it was possible to use the Internet on
a laptop by using a phone as a modem. The GPRS network is connected to the Internet. The
advantage of this, is that dialing-in is not necessary anymore. The telecom company is the
Internet Service Provider. There even were GRPS modems for direct connection for computers
and laptops. GPRS was not very fast, but Internet and e-mailing was possible through it.
GPRS has created a lot of possibilities. It met the minimum requirements in terms of speed to use
the Internet. A lot of other applications on mobile phones were introduced.

3.1.3 2G: EDGE

The annotation EDGE stands for Enhanced Data GSM Evolution, also called EGPRS (Enhanced
GPRS). As the EGPRS term suggests, it is an improvement of the existing GRPS network
increasing the transmission speed and reliability. EDGE tripled the speed of GPRS and hereby
making mobile data transfer faster. There are no specific applications that came with EDGE, but
it made the mobile Internet easier to use because it downloaded files faster. The pages still had to
be converted to WAP.

3.1.4 3G standards

The previous chapter mentioned that 3G offers several techniques providing higher speed and
reliability. HSDPA can reach a theoretical maximum download speed of 14.4 mbps and the
uploading speed has a maximum of 5.76 mbps. The practical speeds are lower but it gives an
indication of the capabilities. This is an important milestone, because it is now fast enough for
almost every Internet related application. These speeds are fast enough to surf the Internet, watch
streaming video, run applications like video calling, mobile TV and music downloading. The list
of applications is growing, and so is the data rate of the 3G network. The applications of 2G were
discussed per technique, but the applications of 3G standards are combined in this paragraph. The
bandwidth that 3G offers is fast enough for most mobile applications so there is no need to
discuss the applications per standards.
A successful application of the 3G speed is the mobile version of the YouTube website. YouTube
is a video sharing website where users can upload, view and share video clips. Vodafone Ireland
uses a link to YouTube mobile on the Vodafone mobile portal, this is the start page of the internet
browser of Vodafone mobile phones.
Mobile TV broadcasts are also popular. Football matches and soaps are broadcast most viewed by
the users.
Google recently announced they will launch a software package for mobile phones. It is a
package similar to an operator package. For example, a phone form Vodafone has several
applications installed for browsing the web or making video calls. The package from Google
includes several Google applications from maps to social-networking features to video-sharing
The speed that 3G offers is not only fast enough for mobile Internet, it is fast enough for Internet
on a computer or a laptop. Vodafone Ireland recently launched a 3G USB broadband modem [23].
USB stands for Universal Serial Bus, meaning that it is possible to connect this device to any
personal computer or laptop having an USB-port. It has a competing price and has the advantage
of being wireless. Using the Internet is possible wherever there is a mobile signal and Internet is
possible in areas without a good cable connection. Big cities in Ireland are well-connected but on
the countryside there is not always a good connection. A 3G USB broadband modem can offer a
solution for this. This application is very useful Africa, where there are poor quality fixed line

3.1.5 Pre-4G

Although it is a technology in development, it is worth mentioning the pre-4G technology

because it says something about where the technology is going to be. UMTS revision 8 is a pre-
4G technique and offers amazing data rates. However, 3G part already offers high speed internet
access so why should there be a further improvement?

The goal of 4G is to provide mobile internet access at high speeds without worrying about the
costs. 3G does offer high speed mobile internet access but it is, in most cases, expensive and the
consumer gets charged for the data use. 4G offers flat rate internet access, meaning the payment
is once every month and the use of the service does not influence that rate.
There is no killer application for 4G yet. A killer application is an application that is ingeniously
coded or unexpectedly useful. Applications that were not possible with the previous technology
due bandwidth usage will be possible now. There is a big increase in bandwidth that 4G offers.
An application for these high speeds is HDTV streaming and high speed file downloading or
The previous sub-paragraph mentioned Vodafone is acting as ISP, offering 3G internet access for
home and mobile use through a 3G broadband modem. A 4G broadband modem can be a good
application of the 4G technique.

3.1.6 Overview

Table 3 is showing an overview of the generations. This table is similar to table 2 but the
‘Service’-row has been replaced by the ‘Application’-row. As the bandwidth gets higher, there
are more possibilities in advanced applications.

Technology 1G 2G 2.5G 3G 4G
First design
1970 1980 1985 1990 2000
1982 1991 1999 2002 2010?
Application Analog Digital voice, MMS, WAP True internet, HD-TV
voice SMS video calling, streaming?
mobile TV,
high speed
1.9 kbps 14.4 kbps 384 kbps 2 mbps 200 mbps
Table 3. Overview of different generations, their characteristics and applications.

The bandwidth use of the applications differ. The following figure shows an overview of the
bandwidth usage per application.

Figure 1. Comparison of downlink data consumption of cellphone applications. [24]

The figure shows an example of the usage of the applications and their bandwidth use per month.
Mobile TV uses the most bandwidth and has the potential of being a killer application.

3.1.7 Conclusion

Now that the development in speed and possibilities are discussed, it is possible to answer the
question of the paragraph: Are the bandwidth demands of new applications a motive for
innovation of mobile communication standards?
The answer of Vodafone Ireland answer to this question is that there first will be an application
demanding more than the current standards can offer. By the demands of the application, a new
standard will be introduced meeting the demands. However, they recognize the difficulty of
coming up with a killer application.
Ammeon answered that the technology leads the applications. The applications do not make use
of the capabilities of the network. There is enough bandwidth but the available capacity is not
used and this is an issue for telecom companies. The telecom companies want their users to use
more data and less voice. Ammeon also recognizes the problem of coming up with a killer
application. To make use of the available capacity the killer application should stimulate the user
to use its bandwidth and a lot of users should use the application.
Our answer to the question is in between the previous answers. With the second generation we
saw the mobile internet speed was not fast enough for unconverted pages. In that time there
probably were already ideas about mobile TV but the bandwidth was just too low. Now we see a
shift: the available bandwidth is very high but the applications do not use it. So at first application

was the driver but with 3G standards and the speculation of 4G it is something else driving the

3.2 Fixed Networks

In Ireland, Ammeon pointed us at another possible reason why innovation of the mobile
communication standards takes place. According to Ammeon, the comparison of the mobile and
fixed networks capabilities cause the innovation of the mobile technologies. The mobile network
is continuously being compared with the fixed network. The fixed network has always been
faster, increasing its capabilities. To keep up with these capabilities, the mobile network has to
continue innovating.
Fixed networks have always been faster than mobile networks. However, with the innovations of
3G and the speculation of 4G capabilities, the mobile network has reached a competitive speed.
At the beginning of mobile Internet, with GPRS, the speed of the mobile network in comparison
with the fixed network was very low. A part of this is caused by the later development of the
wireless network. Mobile data speeds were beginning to develop while fixed internet connections
were already established and improving at a high rate. With GRPS there was a good technology
to build on for a few years and after that UMTS came. UMTS made much higher speeds possible
and is the most popular technology at the moment because of its speed and availability. As
mentioned earlier, UMTS (with HSDPA) makes download speeds up 14 mbps possible. This is
decent internet speed, regarding that most home internet connections are about 4 mbps.

3.3 Factors limiting innovation

So far we only talked about factors stimulating the innovation. There are also factors that can
slow down innovation. The current networks have a lot of bandwidth available. The applications
do not make enough use of the available bandwidth, which can be a limiting factor. If the network
is not utilized enough right now, why should we come up with a new network? If the bandwidth
gets higher, the mobile devices have to handle this. If they cannot, then the capabilities of the
network cannot be used. In this paragraph we discuss those limiting factors.

3.3.1 Popularity of applications

The 3G network offers a lot of bandwidth. There is so much capability unused. Ammeon says that
the current capabilities of the mobile network are not used because there are not enough good
applications for the users that use the bandwidth. The problem is developing the right application
to stimulate the use of this bandwidth. Telecom companies are facing that problem now. They
want to reduce voice use and increase data use.
The problem is visible in the statistics. Here is a citation of an article of July 2006[25]:
“Across the continent, 3G take-up has been underwhelming. Of nearly 720 million cellphone
connections in Eastern and Western Europe at the end of June, 38.6 million, or 5.4 percent, were
3G, according to Wireless Intelligence, a joint venture of the GSM Association and the market
researcher Ovum in London.”
According to the same news article of last year Vodafone made just 3.8 percent of sales in the
quarter ended March 31 2006 from 3G's supposed "killer application" - high-speed wireless

3.3.2 Investments of telecom companies

When a new technology is invented, telecom companies can bid on licenses to use the
technology. Besides this investment, the telecom company also has to deploy upgrade it’s
existing network. The licenses are very expensive. Vodafone has spent $34 billion buying
licenses and building networks for the 3G technology from 2000 up till 2006[25]. The license
prices and the costs of deploying a new network are very high. If the high investment prices result
in high prices for the customer, then this can be a limitation for customers to use the service. It is
important for telecom companies to distinguish whether a new technology is a hype or not. If the
wrong investment is made and the telecom company sticks with this technology, it can limit the
opportunities of new technologies.

3.3.3 Device limitations

The current capabilities of the mobile network are not fully used. Vodafone gave a
possible reason for this. Devices on the market cannot handle the full capacity of
the data standards. For example, the phone requirements of watching mobile
television. Vodafone UK set up a user test of Mobile TV in 2006. The device
limitations were one of the key barriers to adoption. These are limitations in screen
size and battery time[26]. Other limitations are computing capabilities and storage.
The users of mobile phones with a subscription usually get new phones from their telecom
company once every two years. The more people having a new phone means that more people
can use the new applications. In contrast to this, the techniques keep developing. If a user wants
to get the maximum out of the network, he or she should always have a brand new phone which is
compatible with the newest technology. This is an expensive thing and only few people will have
a brand new device regarding the adoption curve of innovation.

3.4 Our vision

This chapter discussed two possible answers to the question: “Why is there innovation of the
mobile communication standards?” We think that in the beginning the applications set the
demands for the technology of mobile networks. When 2G was launched, the applications were
still ahead of the technology. Internet could be a lot faster. At the moment, with 3G, the mobile
speed is fast enough for internet and the applications don’t use all of the capabilities of the current
mobile network. The higher speeds of fixed network are a motive to continue innovation.

The innovation of mobile communication standards has been a very active area over the last 10
years. The speed has increased rapidly and there was an increase in possibilities for applications.
Up to 2G the increasing speed was necessary to meet the demands of applications. Now that the
speed has reached levels of 2-14 mbps with 3G, the bandwidth is not an issue anymore. The
capacity of the 3G network is not being used. There are not enough users using bandwidth. A
possible reason is the limited number of applications that stimulate users to use their bandwidth.
The speed of the 3G network makes internet connections in poor connected areas possible
through 3G modem for pc’s and laptops. Even though the capacity of the 3G network is not used
completely, the innovation goes on. The mobile network is being compared to the fixed network.
The fixed network is increasing its speeds and so does the mobile network. The bandwidth
expectations of the 4G network make applications like HDTV streaming possible. There is a shift

from paying per minute (1G and 2G) to paying per MB (2.5G, 2.75G and 3G) to flat rate payment
Besides the factors that encourage the innovation of mobile communication standards, there also
are factors restricting the innovation. The popularity limited use of the applications for cell
phones that use bandwidth can cause telecom companies to not use a new technology and
remaining with older technology. It if important for a telecom company to recognize a technology
or a standard as hype. If the wrong investment is made and the telecom company sticks with this
technology, it can limit the opportunities of new technologies. The devices can be a limiting
factor. Small screen sizes and short battery operation times can cause a user to not use an

[1] Wikipedia, Mobile Radio Telephone,
[2] Wikipedia, Improved Mobile Telephone Service,
[3] Wikipedia, AMPS,
[4] TU Berlin, History of GSM,
[5] Wikipedia, 2G,
[6] Wikipedia, 2.5G,
[7] Book: 3G wireless networks, Clint Smith, Daniel Collins
[8] TU München, GPRS,
[9] Ericsson, EDGE,
[10]Frequentieland, UMTS,
[11]3GPP, QoS model,
[12]GSM World, HSDPA,
[13]Qualcomm, HSDPA,
[14]Telecomwereld, HSDPA,
[15]Wikipedia, HSPA,
[16]Mobile Info, 4G,
[17]Freeband, WiMAX,
[18]Wikipedia, WiMAX,
[19]Wikipedia, 3GPP LTE,
[20]Telecom ABC, 3G LTE,
[21]Wikipedia, WAP,
[22]Wall Street Journal, Can Google-Powered Phones Connect With Carriers?,
[23]International Herald Tribune, 3G cost billions: Will it ever live up to its hype?,
[24], Vodafone Live! Best Mobile TV Service,
[25]The Base Station Conference, Mobile TV and video may be a future killer application, but
how will it be delivered?,
[26]3G Newsroom, Vodafone launches 3G broadband USB modem in the UK,


VRiSBI International Research Project Ireland 2007

Study Association VRiSBI

Kamer H11-02
Postbus 1738
Tel: +31-10-408 8846

Emiel Caron
Assistant Professor
Room H10-19
P.O.Box 1738
3000 DR Rotterdam
The Netherlands

Tel. +31-10-4081342
Fax. +31-10-408 9162

VRiSBI is the study association for the study Economics & Informatics at the Erasmus University
Rotterdam. We have over 350 members and there are around 100 students currently in their final
year of the bachelor or master program.
One of our most important tasks is to connect students of Economics & Informatics with
companies to give them an inside look how it is in the field. We try to do this by regularly
organizing different kinds of activities in association with interested companies.
The development and the pleasure of learning for the student is important to us. We do this by
organizing all kinds of activities like company visits, study trips, symposia, etc. etc.
This report in front of you is part of the VRiSBI International Research Project Ireland 2007. The
CD-Rom contains all the reports and it also contains the presentations from the symposium
‘Innovation & ICT’.
ISBN of the complete report: 978-90-812660-1-7

VRiSBI International Research

“Innovation and ICT”

Comparing Ireland with The

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complete paper of this presentation.
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