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Mobile Subscribers Yearwise comparision

Craig Ehrlich, Chairman, GSM Association

October 15, 2006
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GSM has crossed the 2 billion user mark globally and accounts for nearly 80 per cent of the global wireless market.As chairman of the GSM Association (GSMA) and member of GSMA's strategy and finance committees, Craig Ehrlich represents more than 679 network operators across 210 countries globally. In a recent interview with tele.net, he defines key strategies for mobile wireless growth, the importance of emerging markets and the evolution to 3G...

What are the worldwide trends in GSM?

GSM has been going from strength to strength across the world in terms of customer growth, migration of networks to the GSM path, and the ongoing evolution of that path. Since we announced 2 billion users in June, a further 100 million new connections have been made in just three months. India is continuing to play a leading role in this growth, with 5.8 million users added in August –­ that's faster growth than in China. Around 80 per cent of the second billion GSM users have come from emerging markets, so this has become a very significant trend for the industry.

We are also witnessing a huge shift towards the GSM evolution path, as operators who were formerly wedded to CDMA determine that there are greater advantages in following the global technology path provided by GSM. CDMA networks that have switched focus from CDMA to 3GSM this year include Telstra and Hutchison in Australia, KTF in Korea, Vivo in Brazil and, of course, Reliance in India.

The launch of high speed mobile broadband, or 3GSM enhanced by HSDPA –­ a 3G software upgrade that delivers up to five times the data speed of standard 3G –­ means that users are now beginning to experience the true multimedia potential of the mobile. Of the 123 commercial 3GSM mobile networks now live in 55 countries, almost half are HSDPA ready across 40 countries. This is a very significant and highly cost-effective step in our 3G evolution roadmap.

Which regions, according to you, have experienced high GSM growth during the last one year?

Of the 300 million new GSM connections in 2006, 43 per cent were in the Asia-Pacific region. Eastern Europe accounted for 15 per cent and Latin America for 18 per cent. Africa took 12 per cent and the relatively mature markets of Western Europe, North America and the Middle East together took the remaining 12 per cent.

The leading countries for volume of net additions were China, India, Russia and the US. Concentration is high, with the top ten countries accounting for just over half of the world's cellular market growth.

In your opinion, which markets are likely to be the key growth regions in the future?What will be your main thrust areas in these regions?

GSMA has two agendas for growth. In the emerging markets, the focus is on working with governments and industry to extend mobile communication access to as many people as possible, mainly by lowering the entry barriers, in terms of cost. Clearly, there is so much potential still to come from China, India, Africa and Latin America in terms of subscriber growth. In mature mobile markets, our drive is to extend the benefits of new multimedia services via high speed mobile broadband to as many people as possible.

What are the key advantages of GSM?

The first major advantage of GSM is scale.With more than 2 billion users connected to GSM services, the economies that have been generated by a market of this size are unprecedented. Such economies have come as a result of GSM being an open, fully interoperable standard. For operators and users alike, this has enabled massive choice and lower costs of equipment.Global roaming is also a key benefit of GSM. As a result of interoperability built into the standard and its family, 700 networks in 215 countries become one connected mobile network across which users can roam seamlessly.

What are some of the milestones achieved in the last one year?

There are several. The 2 billion user landmark is one of the major highlights, especially if you consider that it took 12 years to achieve the first billion, and just two and a half years to reach the second.Importantly, the momentum for 3G is growing rapidly, with 71 million users today. Deployment of HSDPA, which is already commercially available on half the world's 3GSM networks, will have tremendous impact on user take-up and use of new media-rich services.

In developing markets, the success of our Emerging Market Handset programme can be seen in many ways, not just in the 20 million handsets that will be sold under this programme before the end of the year, but also in the attention the industry is now paying to the ultra-low-cost handset sector. All the leading vendors now have a strong emerging market focus, as do the major players in the handset supply chain –­ this has been a terrific achievement.

What are the issues that are likely to hamper the growth of GSM?

I would point to regulatory barriers and policies as the main ones, especially shortsighted taxation, regulatory and spectrum policies that could potentially harm growth, particularly in the developing world.Taxation on mobile handsets, for example, might seem like a great idea for raising tax revenues, but in the long term such policies hold back people and economies.

CDMA is commonly perceived as a better technology for migrating to 4G. How does GSM intend to address this issue?

This question of which technology is superior has been around since the beginning of the 1990s. In the meantime, GSM has achieved 2 billion connections while CDMA has recently passed the 300 million mark. The market has decided which technology it prefers. The GSM evolution path has a clear route to 3G with wideband-CDMA –­ which we refer to as 3GSM –­ and beyond that to HSDPA. The industry is still working out what is the best route beyond 3G. However, in my view, there is too much emphasis on "generations" of technology. Let's be clear, this is and will be a continuous evolutionary process rather than a sudden introduction of the next best thing.

Do you believe that GSM is better suited to the needs of low-end, emerging markets worldwide?

GSM is suited to all markets. The economies of scale referred to earlier certainly mean that cost-wise, it is a very attractive technology for emerging markets; it is very simple and cost effective to deploy, and there is a rapid return on investment.

What do you perceive will be the future of GSM in India?

The future looks very bright in India. GSM is in great shape and is growing faster than any other mobile technology. We are looking forward to the award of 3G licences in 2007, when Indians will get the chance to taste the mobile broadband experience enjoyed in many other parts of the world today.

Has the current rate of 3G acceptance or popularity been in line with your expectations? Do you believe that emerging markets such as India, where voice communication is yet to reach the masses, will benefit significantly from the adoption of 3G?

The growth of 3G is actually ahead of where GSM was at the same stage in its deployment in the 1990s. With HSDPA, I believe we will see even faster growth, once a variety of HSDPA handsets are available in volume. 3G isn't just about mobile multimedia, or video or web browsing, as it is commonly portrayed. 3G spectrum provides tremendous capacity or bandwidth advantages for networks, which means that users get a far better voice experience alongside exciting new services.

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