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GSM means fast, reliable data services

Commentary: Basex analyst Jonathan B. Spira says now that carriers are backing GSM in the U.S., business users will have more access to faster, more reliable data services.

With the exception of the United States and Japan, mobile telephone users can roam near and far thanks to the success of GSM (Global System for Mobile Communications) and the GSM family of services, including GPRS (General Packet Radio Services), EDGE (Enhanced Data for GSM Evolution), and 3GSM (3GSM represents third generation services delivered on an evolved core GSM network). 3GSM services are delivered at a technical level on third generation standards developed by 3GPP, which utilize air interfaces for W-CDMA (Wideband Code Division Multiple band Access) and, in some specified markets, EDGE.

The U.S., however, is endowed with not one but five major mobile communications standards: TDMA (Time Division Multiple Access), CDMA (Code Division Multiple Access), IDEN (Integrated Dispatch Enhanced Network), GSM and AMPS (Advanced Mobile Phone Service, which is analog).

About the author

Jonathan B. Spira is CEO and chief analyst at Basex, an analysis firm that specializes in collaborative business knowledge in the enterprise. Click here to contact Basex.

Although GSM has been available in the U.S. since the mid-1990s by such pioneering carriers as Omnipoint and Voicestream, until recently it was found only in major metropolitan areas. GSM actually accounts for over 70% of the world digital market for mobile communications and has been adopted by over 150 countries as a national standard.

In the first quarter of 2004, more new customers in the U.S. and Canada selected GSM than any other service. GSM's success in Europe is largely attributable to the unparalleled cooperation between mobile operators in areas ranging from infrastructure to billing systems. The GSM system was designed to meet the needs of business managers in the European Union, who often travel great distances by car for meetings. A mobile user can move seamlessly from one operator to another, from one country to another, without losing signal or dropping a call.

In recent years, AT&T Wireless and Cingular Wireless (a joint venture of SBC Communications and Bell South) began a migration to GSM strategy in order to offer GPRS and EDGE services, a necessary move in order to capture the mobile enterprise business. Oddly enough, Cingular ended up as the winning bidder for AT&T Wireless in a fierce contest earlier this year.

Although the transaction won't close until the end of year, change is already in the air. Deutsche Telekom announced a strengthening of its presence via its T-Mobile USA subsidiary, which was once thought to be in danger of being swallowed up by either AT&T Wireless or Cingular, by purchasing portions of Cingular's network in California and Nevada for $2.5 billion (and simultaneously dissolved a joint venture with Cingular, which resulted in a $2.3 billion payment after subtracting a compensatory payment of $200 million in connection with the dissolution of the joint venture).

The companies had originally formed the joint venture in 2001 as a way of expanding their penetration in markets where they were weak. Cingular ended up with improved access in the New York metropolitan area, while T-Mobile gained greater geographic coverage in California and Nevada.

T-Mobile will also acquire additional spectrum from Cingular in the San Francisco, Sacramento, and Las Vegas markets for $180 million, with an option to acquire additional spectrum during the next two years.

The deal is contingent on the approval of Cingular's purchase of AT&T Wireless by federal regulators. Through the transaction with Deutsche Telekom, Cingular may end up easing antitrust concerns about the acquisition as regulators might have frowned upon the fact that Cingular, with the addition of AT&T's spectrum, would control an inordinate amount of spectrum in major markets.

In short, all of this is good news for the road warrior and the mobile Collaborative Business Environment. The family of GSM services has the potential to dramatically impact where and when information is accessed. With strong and experienced GSM operators such as Cingular T-Mobile leading the way, the end user should see greater access to faster and more reliable data services.

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