(China Mobile's) GPRS system hits roadblocks
Author: (JIAN JUN)
February 05,2002
China's top mobile carrier has hit a road block in its development of the GPRS network system, also known as 2.5 generation (2.5G).
China Mobile, the world's biggest mobile carrier with over 100 million users, has been rudely awakened to the fact that the market for 2.5G in China is not quite mature yet.
The 2.5G, technically called GPRS or general packet radio service, provides high-speed Internet browsing services on mobile phones. It is widely regarded by mobile carriers to be the new revenue pool.
The company's management believes that the GPRS system, which features data applications, including e-commerce, e-mail and data transfer through the network, will be the next stage in the development of mobile networks and the first stage in the move towards third generation (3G) networks.
The company started GPRS commercial trials in 25 major cities last July, with a total of 2,900 trial users chosen from 400,000. Two months later, China Mobile launched GPRS commercial trials in 16 provinces and municipalities.
The total expansion had reached 1.5 million GPRS subscribers by the end of 2001, the company said on its website.
At present, the typical data transmission rate of China Mobile's GPRS service is 30 kbit/second. Billing is based on the actual volume of data traffic rather than air time since GPRS uses packet switching.
China Mobile drew up a rosy blueprint last year for the "smooth transmission" to 2.5G networks and said many customers would start to adopt that service.
Yet the disappointing results from the trial commercial operation of GPRS have left the company wondering if widespread adoption of 2.5G network transmission is still a long way off.
China Mobile launched its initial trial services in relatively affluent cities in various provinces, municipalities and autonomous regions.
The customers chosen to receive free GPRS-enabled mobile phones were high-end users that had average monthly mobile phone bills of over 1,000 yuan (US$120). They were also targeted according to age and profession.
Yet as months have passed since the beginning of the trial run, China Mobile has started to realize a cruel fact: its network and related engineers, content providers, mobile phone makers and customers still are not ready for the 2.5G system.
Technology is not the challenge, officials from China Mobile said, adding that they were more concerned with several other major issues that could ultimately affect the success of the GPRS service.
These issues include the availability and affordability of GPRS-enabled terminals, including handsets and PCMCIA cards for notebook computers. The user-friendliness of GPRS terminals with respect to the services and applications that are provided and the availability of content and applications on the portal are also top concerns.
In eastern Beijing's Central Business District, which has a large concentration of white-collar workers to whom China Mobile is marketing GPRS, the network is far from ready.
The trial users complained that they could not make or receive phone calls with their mobile handsets during busy hours, such as 6 pm.
A shortage of communications channels is the cause, telecoms engineers said, adding that China Mobile must set up more base stations to solve the problem.
GPRS, which combines several communications channels to provide high-speed Internet browsing, demands many more channels and hence much more investment for the base stations.
Engineers said China Mobile must install many more new base stations to support GPRS.
Content is another important matter. Without specially designed content for GPRS, people will have no use for their GPRS mobile phones. Content development is lagging, despite requests made by China Mobile.
Content providers, most of which are website portals, are positive but cautious about GPRS. They want to see good market response for the system before they invest more money in GPRS-enabled contents.
The cost of GPRS-enabled mobile phones is also likely to stop many customers curious about the new technology.
To enjoy GPRS services, customers must use a GPRS-enabled handset, which usually costs 1,500-4,000 yuan (US$180-480). Just how many people are willing to pay the high costs is still unknown.
Although the present GPRS-enabled handsets are not as widely available as ordinary GSM handsets, the company's officials said they are confident that the situation will be greatly improved in the first half of 2002.
Nearly all major international mobile phone makers have introduced GPRS handsets in China.
Motorola introduced its A6288 handset in China last year. Based on GSM technology, the model supports POP e-mail, can receive short messages and has certain PDA functions.
Ericsson, Nokia, Alcatel and Siemens also have introduced their own GPRS handsets.
Chinese manufacturers Datang Telecom, Zhongxing Telecom and Konka Electronics have joined the GPRS handset race as well.
Despite mobile phone makers' enthusiasm for GPRS, lack of related application software and difficulties establishing a charging system have become barriers for China Mobile.
The company has kept a low profile on the issue and refused to comment on its slow steps towards implementing GPRS.
"We want to avoid unrealistic customer expectation. Unrealistic expectation inevitably leads to disappointment, which will not be conducive to the sustainable growth of a new service like GPRS in the long run," said Lu Xiangdong, vice-president of China Mobile.
Industry experts said more time is needed for widespread adoption of GPRS.
GPRS, which has received support from many European mobile operators, is undoubtedly a development trend in transmission to 3G telecoms, said Yang Peifang, an expert with the China Academy of Telecoms Research.
"The problem is when the technology is mature but the related services need more following up," he told Business Weekly.
Lu earlier said that his company would consider launching real commercial operation of GPRS in 2002.
Since the cold response of the trial runs though, there has been no official announcement from China Mobile. Like Yang with the China Academy of Telecoms Research, many industry experts still regard GPRS as the most efficient technology between 2G and 3G. But in China, GPRS still needs time to mature, they said.
"As the competition between China Mobile and China Unicom intensifies, they will rival each other to provide better services," said Jim Lin, chief telecoms analyst with US-based research house Frost & Sullivan.
China Mobile, which controls 78 per cent of the domestic mobile market, now has over 145 million global system of mobile communications users.
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