3G, Why all the fuss?

UK currently has five 3G licence holders who all bid for these licences back in early 2000 during the Telecoms boom period. I remember working for one of the UK Mobile Operator who at the time said there existence and future livelihood depended on winning a 3G licence. This was before the Telecoms bust and hence you can see below the determination of all companies involved by the amounts they paid for these licenses.

Licence A: Three (Hutchinson 3G, TIW) £4,384,700,000
Licence B: Vodafone £5,964,000,000
Licence C: O2 (Cellnet) £4,030,100,000
Licence D: T-Mobile (One2One) £4,003,600,000
Licence E: Orange £4,095,000,000

Yes we are talking Billions of Pounds. Basically the companies felt at the time, the survival of their company was at stake if they failed to win a licence. Since then circumstances in the industry has changed and the market believes the licences were bought at far too higher rate. However the future of the technology is still believed to be a prosperous one and hence all of the companies awarded licences in the UK are investing heavily in building their 3G networks.

Three being a new comer to UK were also the first to offer third generation services but had a very disappointing start with poor network coverage, minimum handset availability and technical problems with the new UMTS operating systems. All the other operators weren’t in a rush as they had revenues coming in from their existing 2G services. However licensing requirements obligated each operator to deliver a network coverage of 80% population by end of year 2007.

Now that the licence obligations have been met by all with one operator receiving a fine, the focus is on offering data services and cost savings.

The next steps are offering good quality HSDPA/HSUPA services which will be the battle ground. The operators are looking at RAN sharing deals in order to save money and expand their data network coverage footprint.

Glossary of Terms
UMTS: Universal Mobile Telecommunications System
HSDPA: High Speed Downlink Packet Access
HSUPA: High Speed Uplink Packet Access
RAN: Radio Access Network