The 3GSM World Congress currently ongoing in Singapore is the Asian counterpart of the 3GSM World Congress formerly held in Cannes, France which has now moved to Barcelona, Spain. In 2007 the Asian event itself will be on the move. After three years in Singapore the Congress will move to Macau, China next year.

The current event has been marked by a number of high profile announcements and Telecomredux is bringing readers a round up of news from the 3GSM World Congress.

Affordable 3G phone initiative
Twelve leading mobile operators spanning six continents are spearheading the GSM Association’s '3G for All' campaign, which aims to make third-generation mobile services accessible to a much wider user base. In the first phase of the campaign Cingular Wireless, Globe Telecom, Hutchison 3G, KTF, MTN, Orange, Smart, Telecom Italia, Telefonica, Telenor, T-Mobile and Vodafone will select a flagship 3G handset designed to appeal to the mass-market. The GSMA has invited handset makers to submit proposals for a 3G mobile phone that can support advanced services, such as high-speed Internet browsing, mobile TV and instant messaging, while costing significantly less than a low-end 3G handset today. The GSMA believes the endorsement of 12 of the world’s leading mobile operators, which collectively serve 620 million subscribers, will help the winning handset vendor achieve the economies of scale in manufacturing, logistics and marketing, necessary to make 3G phones much more affordable. Upon final selection, the ‘3G for All’ handset will be made available to all GSMA operators. Over the next few months, the 12 operators will evaluate and score the proposals submitted by handset vendors against the following criteria - functionality, usability, logistics, market acceptance, target price, service and support, strategic commitment and form factor.  The handset with the highest score will be endorsed as the official ‘3G for All’ phone by the GSMA. The winning handset will be announced at the 3GSM World Congress in Barcelona in February 2007.

Laptop connectivity
High-speed mobile broadband connectivity – powered by HSDPA - will soon become a standard feature of notebook PCs following the publication of guidelines, developed by a GSM Association-led initiative, that prescribe a common approach for PC manufacturers to fully integrate 3G functionality in their product ranges. Participants in the initiative include leading mobile operators: Cingular Wireless, O2, Orange, TeliaSonera, TIM, T-Mobile and Vodafone as well as major manufacturers and suppliers of mobile, software and PC equipment; Check Point, Dell, Fujitsu, Gemalto, Intel, Lenovo, Microsoft, Option Wireless, Novatel Wireless, Qualcomm, Sierra Wireless and Sony Ericsson. The comprehensive guidelines cover the essential elements of 3G integration from the functionality and features to security aspects, compliance and testing. These detailed guidelines also address the issue of the physical location of the 3G modem and the SIM that will enable automatic connection to global mobile networks.

Asian Instant Messaging
Mobile operators in Asia plan to enable their customers to exchange instant messages (IM) with friends across different networks as part of the global personal IM campaign run by the GSM Association. In Malaysia, all three GSM operators, Celcom, DiGi Telecommunications and Maxis have agreed to launch interoperable IM services during 2007, while M1, SingTel Mobile and StarHub in Singapore will start to plan the development of interoperable IM services. India’s GSM operators, which announced that they would adopt personal IM in February, are planning to launch commercial services in early 2007. The GSMA launched its personal IM campaign in Barcelona in February with the ultimate goal of making instant messaging on mobile networks as ubiquitous and popular as text messaging. The operators’ IM services in India, Malaysia and Singapore will all be based on a technical and commercial framework designed by the GSMA to maximise ease-of-use, interoperability and reliability, while minimising spam and viruses.

Mobile coverage will increase
Mobile networks will provide coverage to 90% of the world’s population by 2010, compared with 80% today, despite the misplaced policies of many governments, who continue to subsidise the rollout of fixed-networks, according to a study commissioned by the GSM Association, the global trade association for mobile operators. The study, covering 92 developing countries, examined the collection and use by governments of universal service fund levies. It found that governments had collected more than US$6bn from the telecoms industry, of which US$2bn has come from mobile operators. Of the US$1.5bn that has been distributed so far, just 5% (US$75mn) has been used to extend mobile coverage, despite the distinct cost advantages of mobile technologies. The World Bank has estimated that the capital cost of providing mobile coverage to an individual is one-tenth of the cost of installing a fixed-line connection. Universal service funds are typically designed to provide governments with the resources to extend basic telecommunication facilities to the least privileged in society and to those living in the most remote areas. Despite the critical role telecoms plays in developing markets, the study by Intelecon Research found that governments have yet to allocate US$4.4bn of the US$6bn collected by these funds. If governments allocated the unspent US$4.4bn to extending mobile networks, an additional 450mn people in rural areas of the developing world would have mobile coverage, the study concluded.

Community Information Centres
Mobile operator GrameenPhone is rolling out Community Information Centres across rural Bangladesh, giving up to 20mn people the chance to use the Internet and email for the first time. Following a successful pilot conducted with the GSM Association’s Development Fund, GrameenPhone is teaming up with local entrepreneurs to set up approximately 500 centres in communities throughout the country by the end of 2006. Run by local entrepreneurs, each centre will contain personal computers connected to GrameenPhone's existing GSM mobile network, which has been upgraded with EDGE technology to offer data transfer speeds of up to 128kbits/s. The centres will be located in each Upazilla, or sub-district, of Bangladesh so that they are each within reach of up to 15 villages containing up to 40,000 people.The computers in the 16 centres in the pilot are used by an average of 30 people a day, who pay a small fee to access email or Web pages. Bangladeshis use the centres for a wide variety of business and personal purposes, from accessing health and agricultural information to using government services to video conferencing with relatives overseas. GrameenPhone trains the entrepreneurs so that they can give people advice on how to set up an email account and best make use of the Internet.

Investment opportunities reviewed
At one of the keynote sessions at the Congress a number of speakers highlighted that mobile operators are revising how they view the investment opportunity represented by emerging markets. Presentations by three leading pan-Asian mobile operators – SingTel , Malaysia’s TM and Orascom Telecom, all of whom have invested heavily outside their home markets – demonstrated that a number of new risk factors are now in play when they consider moving into a new market. Most obviously was the lack of opportunities to bid for brand new licences, particularly greenfield ones where no existing cellular network is in operation. Such easy pickings have virtually disappeared. Instead, operators must look to buy existing licensees to find future growth. The price on such acquisitions has been driven higher by the entry into the telecoms market over the last few years of private equity players, they all agreed.

Data will be key opportunity
All voice calls in the future will be carried on mobile networks as a result of convergence but the more interesting opportunity might actually be in data services, predicts Neil Montefiore, CEO of Singaporean mobile operator M1, talking at the Congress. “The voice market is mature and fixed and mobile operators are fighting for a finite number of minutes. My view is that voice will eventually be completely on mobile,” according to Montefiore. Although mobile operators have made inroads into fixed operators’ territory with homezone initiatives which offer differentiated pricing for users in specific locations, the shift to an all-mobile voice market will be more the result of technical innovation, he reckons. The industry is currently engaged in a transition from circuit-switched to IP-based networks that will put voice on top. However, mobile and fixed operators are scrapping over a mature market. The upside in terms of future revenues from convergence is in finding the best way to add data to any bundle of services. Mobile operators have a number of options. 3G and then HSPA both enable them to move towards the kind of speeds available on fixed networks. Of course, operators can also link up with their fixed rivals to ensure access to comparable bandwidth speeds. A number already have unbundling or other wholesale arrangements with fixed operators. The quick-fix alternative is to buy an ISP to grab their readymade expertise and customer base. The competition is not standing still either, said Montefiore, with pure fixed operators looking to gain wholesale access to cellular networks or even buy a whole mobile business, sometimes reversing a previous decision that convergence did not represent the future. All are in pursuit of as many elements as possible of the triple or quadruple play. Conventionally, one of the reasons that users are supposed to embrace packages that mix voice, broadband and content is because of the simplicity of a single bill for all their telecoms services. Interestingly, this has not been M1’s feedback. But, unsurprisingly, it has found that users enjoy the discounts that accompany such packages. “Experience has shown that customers are not excited about single bills but are certainly drawn to discounts for bundled services.” Discounting is not great news for operators’ margins but does boost customer loyalty, said Montefiore.

Looking for the next billion
Operators should already be thinking beyond the next one billion subscribers and looking towards a time when GSM coverage reaches out over 90% of the world’s population. That was the message delivered to delegates by a panel of leading CEOs at a 3GSM World Congress keynote address. It took 12 years to reach the first 1bn GSM subscribers, then just 30 months to breach the 2bn milestone, which was passed in June of this year. The phenomenal growth rate is set to continue in the short term, however, carriers will need to innovate if they are to close the gap that exists between the current global mobile penetration figure of 38.9% and the current potential market of 4.8bn people. Smart Communications’ president and CEO, Napoleon Nazareno, was on hand to describe how his company looked beyond the more heavily populated urban areas and into rural communities. Smart has 99% coverage of the Philippines. Smart initially invested heavily in backbone and transmission, and combined that with its fixed network, but its success is down to more than infrastructure. “When we reached 25% penetration the analysts said we were hitting the wall, but we wanted to push the wall back. So we looked at making the service more affordable. In the Philippines people have daily earnings, so they have daily spending patterns. But when you sell smaller units it is not necessarily lower margins,” said Nazareno, making reference to his firm’s innovations around micro-payments.

Alexander Izosimov, CEO of Russian operator VimpelCom, suggested that his company managed to drive up subscriber numbers thanks not just to lower prices, but also a lack of over-regulation on the part of his country’s government. “There are no excessive taxes in Russia . None on any part of the operation, none on SIMs.” Russia now has penetration based on SIM cards of 101%.

Abandoning ARPU
India is one of the world’s fastest growing mobile markets, but cutthroat competition in the voice telephony space has left operators seeking new ways to drive revenues. In a country with a large youth population, India ’s leading operators see mobile content of all kinds as a strong channel for future growth. Speaking at 3GSM World Congress Asia yesterday, Ashok Juneja, corporate director and CTO at Bharti Airtel, said that Bharti, like many other Indian operators, had abandoned all financial models based on ARPU. “Instead we look at the cost per minute and revenue per minute. So increasing minutes of use per subscriber is key to us,” he said.

Although the country closely follows China as the fastest growing mobile market, now netting over 6mn subscribers per month, voice tariffs have dropped from the equivalent of US$0.15 to US$0.01 in just five years. “This level of competition is unsustainable,” said Juneja. “This has not happened in any other market and is largely responsible for a growth rate which has driven the country’s subscriber base to over 100mn.

“Cutthroat competition has made consumers happy,” he said. “But going forward, Bharti is looking to the country’s large youth population and increasingly focusing on value added services as well as music, m-commerce and mobile TV.

“If we can get the technology right to deliver something like Bollywood content – if we think smart and think about affordability – we have access to a billion strong market,” he said. But Juneja acknowledged that crucial to this strategy is making feature rich handsets affordable. “Bharti intends to bring handset prices down to US$10,” he added.