September 2000
A White PPaper
Hughes Software Systems
Plot 31, Electronic City,
Sector 18, Gurgaon 122 015,
INDIA
Website: www.hssworld.com
E-mail: info@hssworld.com
aper from
Adax Europe Ltd
1 Southview Park, Caversham,
Reading RG4 5AF,
UK
Website: www.adax.co.uk
E-mail: sales@adax.co.uk
 GSM TO 3G: EVOLUTION OR REVOLUTION?

With the finalisation of 3G licences, and the massive investments made by the
successful bidders, there is now a race to generate a return on investment.
Operators must strike a balance between cost of infrastructure, value of
services and time to market, or face failure.

Operators without a licence have alternative opportunities to deliver services,

albeit at potentially reduced bandwidth.

This paper examines the technical options open to operators, with or without
3G licences, to evolve or replace existing infrastructures.

Introduction
Network operators have been spending mind-numbing amounts to acquire 3G licenses, with more than
80 operators throughout the world forecast to be committed to 3G by the end of 2000. In the UK, for
instance, licenses of $35 Billion have been sold. To this must be added the estimated $7 Billion cost of
rolling out a national 3G infrastructure. Given that any particular network is never finished, because it is
continually upgraded, no one can accurately peg the “final” cost of new 3G infrastructure.
Many industry commentators have voiced doubts over the viability of the major players. “There are
significant concerns emerging over the future performance of telecommunications companies BT and
Vodafone,” says Paul Donovan, analyst at UBS Warburg. “Markets are getting worried about the costs of
investment that these companies are going to have to make – and also about just how high future revenue
streams are going to be.”
Other analysts are more optimistic about the revenue streams, but remain downbeat about the timescales
– this is not an overnight technology. For example, it has been suggested that although 3G revenues will
grow rapidly, GSM will remain the basis of carrier technology for at least the next five years.
There is little doubt that 3G revenues will be big, forecast to pass the $500 Billion mark by 2010. But as
always, the player that hits the market soonest and hardest will emerge the victor. The ability of 3G licence
holders to implement an infrastructure quickly becomes vital in this scenario.

Subscriber growth figures for GSM and 3G

1999 2000 2001 2002 2003 2004
GSM 125.6 170.9 192.4 213.8 224.1 254.2

3G 0.0 0.1 1.6 3.4 7.0 12.8

2
What ’s wrong with GSM?
What’s
First introduced in 1992, and now standard
across Europe and Asia, GSM is running out of
bandwidth. Within GSM networks the data traffic is
increasing enormously, and is expected to grow 40-
50 per cent this year. This growth in demand for
Internet access and services has paralleled the ex-
plosion in demand for mobile data communica-
tions. Users want access to the Internet while they
are away from their offices and homes.
The success of I-mode, NTT DoCoMo’s mobile
Internet service, demonstrates there is a market for
wireless Internet access and increased demand for
services, and thus bandwidth, promised by 3G. One
million subscribers sign up to I-mode every month,
drawn to services such as email, online banking
and Internet browsing capabilities.
So what choices are available, right now, to op-
erators wanting to introduce new data services?
GPRS “2.5G
“2.5G””
The General Packet Radio Service (GPRS) is a
new packet-based bearer that is already being in-
troduced on many GSM and TDMA mobile net-
works. It is an exciting new bearer because it is
immediate (there is no dial up connection), rela-
tively fast (up to 115 kbps in the very best theoreti-
cal extreme) and supports virtual connectivity, al-
lowing relevant information to be sent from the
network as and when it is generated.
GPRS technology is part of a first step toward
3G. Primarily a software upgrade to the GSM wire-
less networks that provide mobile phone service in
much of the world, GPRS provides mobile users
with access to Internet information. It is a natural
part of the migration path to 3G and uses the same
base stations as GSM with a modification of soft-
ware and the addition of support nodes, plus a
link to a packet data network.
Cellular operators will have to add at least two
new types of nodes to their existing cellular net-
works to provide packet-based services. The nodes
are:
1. SGSN – Serving GPRS support node
2. GGSN – Gateway GPRS support node
The cost of these nodes will be significant but
operators can roll out these nodes in phases. The
operators will also need to upgrade their existing
BSS software to support GPRS. GPRS will enable
the network up-to 21.4KBPS data rate per time slot.
3
 GSM TO 3G: EVOLUTION OR REVOLUTION?
GPRS Limitations
While GPRS indeed is an evolutionary technol-
ogy, field trials also have demonstrated some limi-
tations.
There are signals that the early versions will pro-
vide mobile users a nominal 64Kbits/sec wireless
link – a speed that in fact may be as low as 14Kbits/
sec as users compete for bandwidth.
GPRS impacts a network’s existing cell capacity.
There are only limited radio resources that can be
deployed for different uses- use for one purpose
precludes simultaneous use for another. For exam-
ple, voice and GPRS calls both use the same net-
work resources. The extent of the impact depends
upon the number of timeslots, if any, that are re-
served for exclusive use of GPRS. However, GPRS
dynamically manages channel allocation and al-
lows a reduction in peak time signalling channel
loading by sending short messages over GPRS
channels instead.
Achieving the theoretical maximum GPRS data
transmission speed of 115 kbps would require a
single user taking over all eight timeslots, without
error protection. Clearly, it is unlikely that a net-
work operator will allow all timeslots to be used by
a single GPRS user. Additionally, the initial GPRS
terminals are expected be severely limited- sup-
porting only one, two or three timeslots. The band-
width available to a GPRS user will therefore be
severely limited. The reality is that mobile networks
are always likely to have lower data transmission
speeds than fixed networks.
Relatively high mobile data speeds may not be
available to individual mobile users until Enhanced
Data rates for GSM Evolution (EDGE) or Universal
Mobile Telephone System (UMTS) are introduced.
4
EDGE “2.5G+” –
End of the line for GSM?
EDGE (Enhanced Data for GSM Evolution), which
is currently being standardised within the European
Telecommunications Standards Institute (ETSI), rep-
resents the final evolution of data communications
within the GSM and IS-136 standards. EDGE uses
a new modulation schema to enable theoretical
data throughput of up to 384kbit/s using existing
GSM infrastructure. Clearly, this surpasses GPRS
and could offer an alternative route for GSM op-
erators who will not have third generation licences.
To support EDGE the operator has to upgrade
its transceivers as the modulation scheme changes
along with software upgrade.
EDGE uses 8PSK modulation at higher data rates
and standard GMSK modulation at lower data
rates. Operators can roll out EDGE in networks in
phases. Since 8 PSK will also be used for UMTS
(Universal Mobile Telecommunications System),
network operators will need to incorporate it at some
stage to make the transition to 3G mobile phone
systems.
3G – The Holy Grail
To date, the main driver for mobile communica-
tions has been voice telephony. However, the intro-
duction of new high-speed data capabilities, in-
cluding GPRS and EDGE, and the evolution to
UMTS, will give new and existing GSM operators
the potential for a whole range of mobile multime-
dia services. Electronic postcards, web surfing, ac-
cess to corporate LANs and Intranets, and e-mail
from a mobile terminal, to name but a few.
UMTS is the standard for delivering 3G services
being developed under the auspices of ETSI. It builds
on the world’s most widely deployed mobile tech-
nology – GSM – and offers the prospect of a truly
global wireless standard for personal multimedia
communications.
To introduce 3G in existing networks the cost is
going to be enormous. Many new nodes are to be
introduced in the existing networks like NODE-B,
Radio Network Controller (RNC) and Core Network
(CN) consisting of the SGSN, GGSN and the MSC/
VLR. The MSC/ VLR would also need to be modi-
fied to be able to communicate with the 3G Radio
Network over ATM. These nodes have to inter op-
erate with existing 2G or “2.5G” nodes. The mo-
bile phones also have to inter operate with 3G and
2G modes.
The challenge – “Managing ROI”
It is clear from the subscriber projections for 3G
that the return is not going to be fast enough on
their investments. In other words there has to be a
significant services pull factor to attract new sub-
scribers and grow services revenue from existing
ones. The value added services like faster email
browsing, video conferences on the move, internet
browsing and extending corporate intranet appli-
cations will attract the business subscribers. There
is a possibility that 3G networks also may support
Voice over Packet and this should only help its bet-
ter penetration.
Much of the revenue required to build the net-
works of tomorrow must come from GSM / GPRS
services of today. The two networks will co-exist and
inter-operate for much of the next decade. It is es-
sential therefore to support seamless mobility be-
tween the two.
Evolution, Not Revolution
All operators agree the path to 3G is evolution,
not revolution, with GPRS being Step One.
Like the GSM standard itself, GPRS will be intro-
duced in phases. Phase 1 is expected to be avail-
able commercially in the next year. Point to Point
GPRS (sending information to a single GPRS user)
will be supported, but not Point to Multipoint (send-
ing the same information to several GPRS users at
the same time). GPRS Phase 2 is not yet fully de-
fined, but is expected to support higher data rates
in addition to Point-to-Multipoint support.
The existing operators who have not got 3G li-
cense must follow the EDGE path to its conclusion
to provide 3G services like Video conferencing,
Multimedia, fast data transfer etc. Operators who
have 3G licenses will start introducing these new
nodes in their network to provide the 3G services.
With 3G data rates per channel being up to
1.920 MBPS, EDGE-based network operators will
need to support multi-slot terminals to compete.
5
 GSM TO 3G: EVOLUTION OR REVOLUTION?
Conclusion
Availability of services and early subscriber take-
up will be the key to survival for operators. Vendors
who build these into their 2G/3G equipment offer-
ings will be well placed to lead the market at the
end of the decade.
Lower infrastructure costs will further help in early
break even and profitability for network operators.
Equipment vendors should therefore focus on mak-
ing available cost-effective solutions for providing
a wide range of services to attract both business
and non-business users.
Evolution, not revolution, is the only way to get
to market early, with the lowest cost. Operators must
strive to implement technical solutions that can be
migrated to new standards easily and quickly.
HSS and Adax –
P roviding a Migration Route
HSS has extensive experience in
engineering solutions for Wireless
network equipment vendors. Utiliz-
ing this rich experience set, HSS is building com-
ponents and software frameworks for SGSN and
GGSN for both GPRS and 3G networks. HSS ad-
ditionally provides components for the RNC and
the MSC for the 3G networks to help the equip-
ment vendors build carrier class solutions. HSS is
also a recognized player in Voice over IP domain
and is leveraging this strength to spearhead the
convergence of the 3G Wireless and Voice over
Packet domains. HSS is working with leading equip-
ment vendors in this space and helping them re-
duce their time to market.
HSS offers ready-to-use software frameworks for
equipment vendors and assists in porting /
customisation to reduce overall time to market. HSS
builds the stack components (which are integrated
within the framework) as per the current (and rap-
idly changing) versions of the ETSI / 3GPP specifi-
cations so that the offering remains competitive at
6
all times. Additionally the HSS frameworks provide
a Network Management subsystem, a Fault Man-
agement subsystem and an Initialisation and Plat-
form Services subsystem as optional components.
Equipment vendors can thus focus on building
advanced services/applications on their Network
Equipment, which are the key differentiators from
Operators perspective.
The HSS framework for GPRS is engineered as a
scalable solution that can be configured as an
SGSN, GGSN or a combined GSN and has inter-
faces to the HLR, Charging Gateway, MSC/VLR and
the PDN. The framework is also being extended to
incorporate support for 3G specifications for SGSN
and GGSN.
The HSS 3G Core Network and RNC Frame-
works enable building of carrier class 3G network
solutions. The Core Network Framework consists
of components for the SGSN, GGSN or an MSC,
and has standard interfaces to the RNC, HLR, other
SGSNs and the PDN. The RNC framework con-
sists of pre-integrated transport layers for trans-
porting the user signalling and data to and from
the SGSN and MSC.
HSS has an ideal set of solutions for High Speed
wireless infrastructure today that are based on open
systems standards, modular design and a common
look and feel APIs. HSS has the solution whether
you want to migrate existing systems to GPRS and
then to 3G or leapfrog to 3G directly. Using HSS’s
2.5G components, customers can be assured of
migration to 3G using other components from HSS,
thereby maximizing the return on investments, with
solutions from a single vendor from GPRS to UMTS.
The immense signaling
requirements of the modern
wireless system means the
effective protocol control and bandwidth manage-
ment at the foundation of the wireless network is
crucial to its performance. With an in-depth knowl-
edge of these protocol requirements and neces-
sary performance, Adax has the products to en-
able manufacturers and operators to build efficient
and effective networks for GSM, GPRS, 3G and
beyond.
As specialists in the foundation layers of network
infrastructure, Adax understands the protocol re-
quirements needed in the rapidly evolving telecom-
munications environment. Adax products provide
the ability to reduce the cost of ownership of mo-
bile applications, whilst delivering high perform-
ance and efficiency without burdening the main
system CPU. Adax solutions ensure ease of inte-
gration, smooth migration and total scalability for
telecommunications companies, network operators
and manufacturers. .
The Adax HDC card is the ideal product to fa-
cilitate the development of the new class of Signaling
Transfer Points, Base Station Controllers, Mobile
Switching Centers, Next Generation Network Gate-
ways and Base Transceiver Stations demanded by
today’s wireless networks. The HDC is a high den-
sity, fully channelized, multiple protocol platform
that provides a powerful and flexible single slot
solution for next generation IN systems. Multiple
HDC cards can be installed together for a totally
scaleable and cost effective foundation for X.25,
Frame Relay, SS7, HDLC, LAPD and V5. It was de-
signed with more capabilities than the market re-
quires today, allowing for the addition of new func-
tionality without being removed from service and
to allow for the increasing growth in signaling re-
quirements for SS7/IP integration such as VoIP and
VoATM. Therefore the HDC is the ideal solution for
the increasing demands as networks evolve to 3G,
which will protect the investment cost for network
operators and manufacturers.
For smooth product migration from narrowband
(SS7) to broadband (ATM) signaling networks, the
Adax ATM product is compatible with the Adax SS7
products, protecting the current investment in
signaling infrastructure and ensuring effective
narrowband and broadband signaling interaction.
Adax provides network interface cards for TI/El and
0C3/STM-I, ATM protocol controllers and SSCOP/
SSCF/SSCS software to provide a complete foun-
dation for broadband signaling networks, used
within GPRS and 3G network infrastructure. Adax
has a complete set of products for wireless
technology infrastructure today that are based on
open systems standards, modular design and a
common API.
The combination of HSS together with Adax of-
fers wireless network developers and operators high
performing and cost effective solutions, whether
your product is for GSM, GPRS, 3G or beyond.
7
 GSM TO 3G: EVOLUTION OR REVOLUTION?
The comprehensive set of
software building blocks
from Hughes Software
Systems consists of both
frameworks and protocol
stacks for the high-speed
mobile data domain.
Frameworks
3G Core Network Framework
3G RNC Framework
2.5G-GPRS Framework
Stacks
BSSGP, BSSAP+, RANAP, GMM/SM,
MM/CC, SCCP, GTP-U/C/PRIME,
M3UA, MTP-3B, MAP, SCTP, ALCAP,
SAAL-NNI
Hughes Software
Systems is a key supplier
of communication
technologies for Voice
over Packet, Intelligent
Networks and High-
speed Mobile Networks,
and is fully focussed on
the needs of its
customers to build Next
Generation Networks.
For clarifications, answers to queries
or more information, please contact
Hughes Software Systems
Plot 31, Electronic City, Sector 18,
Gurgaon 122 015, INDIA
Tel: +91 (0) 124 634 6666
Fax: +91 (0) 124 634 2925
Website: www.hssworld.com
E-mail: info@hssworld.com
8
For nearly 20 years, Adax
SS7, ATM, X.25, Frame
Relay, HDLC, LAPD and V5
products have been
providing the foundation for
the world’s leading fixed
and mobile networks.
Products
Adax Protocol Controllers (APC)
Adax Network Controllers (ANC)
Adax Protocol Software (APS)
Specializing in layers 1, 2
and 3 of the OSI model,
Adax provides high
performance, industry
standard communication
controller products and
associated software, which
meet and exceed the
current and future wide
area networking needs of
the modern telecom
company. The products
are based on open
systems standards,
modular design and have
a common set of APIs.
For clarifications, answers to queries
or more information, please contact
Adax Europe Ltd
1 Southview Park, Caversham,
Reading RG4 5AF, UK
Tel: +44 (0) 118 948 4444
Fax: +44 (0) 118 946 4922
Website: www.adax.co.uk
E-mail: sales@adax.co.uk