Now, minds carefully cleared of any clutter, let me tell you about this new technology I’ve come across. 140kbit/s-plus to your cellphone, always on so your email arrives (“ding”) and you can read it and reply at a speed that’s more than twice that of your sad, pathetic desktop dial-up connection. Two separate networks to provide a fair amount of blazing competition. Applications being developed all the time to allow you to run your business on the run, some of them designed and built here in New Zealand. Best of all, this isn’t some far-flung future project, this is here and now.
By the middle of the year both Telecom and Vodafone will have their 2.5G cellular networks functioning at warp speed and we will be the envy of the rest of the world. The New Zealand telecommunications market is about to burst into the lead worldwide even before the new spectrum acquired cheaply at the auction is needed.
2.5G is the stop-gap between now (9.6kbits/s data speeds) and the future (a drooling 2Mbit/s) but it shouldn’t be ignored as just a fill-in technology. It’s a powerful tool that should be of great interest to any business that has staff out in the field.
Vodafone is first out of the blocks with its GPRS network. GPRS takes the existing GSM network, best suited to voice and text messaging at 9.6kbit/s, and slaps on a radio layer underneath. This layer carries the data — initially at only 10kbit/s, which is hardly an improvement – but to be boosted to its full potential within weeks of the launch.
This is being touted as the world’s first national rollout of GPRS, which means many of the applications needed aren’t around yet. This is a good thing, because if your company develops apps that get licensed for Vodafone’s worldwide use, you’ll find yourself a millionaire overnight (so Vodafone is suggesting). 170 million users will begin migrating from GSM to GPRS in the next year. That’s a lot of tickets to punch.
Vodafone beats Telecom off the line by about three months, but its main advantage is that this is nothing more than a network upgrade. Users won’t have to change phone number; they just slot their existing SIM card into a GPRS-capable handset and carry on. It’s also good for Vodafone because the upgrade should cost only about 10% of what Telecom would be paying ($200 million is the quoted price) for its 2.5G network.
Telecom has a harder row to work in this instance. Its cellular network began as an analogue system, AMPS, had digital tacked onto it, D-AMPS, and now has to be completely replaced by its new technology, CDMA. Until it can migrate all of its customers away from AMPS and D-AMPS it effectively has to run two different networks — that can’t be cheap.
CDMA is as powerful a platform as GPRS and there seems very little to differentiate between the two. Real life may prove otherwise, of course. Both lead seamlessly into the 3G world with neither Telecom or Vodafone requiring a huge outlay of cash to move on from 2.5 to 3G. Could the two standards ever merge? I think that’s a possibility, but there is so much animosity developing between the European-led GSM standard and the US-led CDMA that any decision will be loaded with politics rather than technological good sense, certainly at that level.
But wait, there’s more. Having sold off the spectrum, we now have the potential for a third network and perhaps some true competition in the cellular market. Don't we have competition now, I hear you ask? Well, no. Telecom and Vodafone handsets don’t work on each other’s networks so if you decide to switch from one to the other, you get to buy a whole new phone and a whole new phone number. That’s not really going to happen on a regular basis. Perhaps with a third network it will drive some real pricing competition in the cellular market. Then, by the time 3G does get off the ground, we’ll be ready, willing and able to hit the ground running.
Oh, and if you do have any apps you want to sell to Vodafone, or Telecom for that matter, don’t forget to tell us about it. I won’t claim too large a finder’s fee.