WIRELESS INFRASTRUCTURE IN THREE REGION

United States, Europe and Japan

 

INDEX

EXECUTIVE SUMMARY
INTRODUCTION
WIRELESS STANDARDS
    GSM (Global System for Mobile Communication)
    CDMA (Code Division Multiple Access)
    TDMA (Time Division Multiple Access)
    W-CDMA (Wideband CDMA)
MAJOR SUPPLIERS OF WIRELESS INFRASTRUCTURE IN THREE REGION - US, EUROPE and JAPAN
    United States
    Europe
    Japan
WIRELESS MARKETS IN THE THREE REGIONS
    United States
    Europe
    Japan
CHALLENGES FACING WIRELESS NETWORK OPERATORS
    Aggressive Pricing
    Service Differentiation
    Evolving to Data-Centric World
    Changing Customer Requirement
    Congested Spectrum
    Evolving Technology Standards
ROLES OF IS MANAGEMENT
    IS Management Roles in Wireless Network Provider
        Investment Protection
        Forward Evolution
        Backward Capability
        Scalability
        Network Interoperability
    IS Management Roles in Wireless Network User
        Top Management Supports
        Technology Alignment with Business Needs
        Planning
        Operations and Maintenance
        Human Resources and Training
        Outsourcing
CONCLUSIONS

 

EXECUTIVE SUMMARY

 

Walking into a new millennium, wireless infrastructure industry still looks prospective. Subscribers to digital mobile phones in the world skyrocket so do battles between different standards in wireless infrastructure. While the competitions among 2G standards such as GSM, TDMA, and CDMA, further intensify, 3G standards, i.e. W-CDMA and CDMA2000, have started to take off in several regions. As different standards and players dominate the world’s three major markets - U.S., Europe, and Japan, integrations and alliances are expected to grow intensely. On the other hand, wireless network operators are facing more and more challenges. Facing such a dynamic environment, IS managers, working for either equipment providers (Motorola, Nokia, and NTT) or equipment users (Microsoft, GM, and Amizon.com), have too many issues to take into account when making relevant decisions.  In this paper, we cover the overview of wireless industry and provide some recommendations for IS management to deal with those challenges.

 

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INTRODUCTION

 

In many respects the wireless industry has been in a steady state over the past year: a steady state of astounding growth (see figure 1).  While there has been tremendous attention paid to new services – wireless data leading the way, and new technologies – reeling in the time scales for 3G, and filling the interim period with WAP, GPRS and EDGE, the vast majority of new business – some 160 millions new subscribers were added worldwide in 1999 – all came in the plain old voice-related services.  Likewise, a surge in capital expenditure by wireless operators came in response to rising volumes of traffic on their networks. As tariffs falls, subscribers are calling more, cannibalization of fixed line services is beginning, and network capacity, especially for the GSM-900 operators, is getting stretched ever more thinly.  However, these trends bode well for the suppliers of wireless infrastructure: market leaders such as Motorola, Ericsson and Nokia are looking forward to the coming years with confidence that the demand side of the equation will remain heavier in balance with the supply side. 

In this report, we will explore market dynamics and challenges in wireless infrastructure, followed by the future trend of technologies and its implication to wireless players especially wireless network operators.

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WIRELESS STANDARDS

 

Our starting point is an overview of wireless standards. Today’s wireless infrastructures are mainly concentrated in digital technologies.  The allocation of subscribers is seen in figure 2 below, where GSM will surpass 250 million subscribers in 2000, and 49 million and 56 million in CDMA and TDMA, respectively.  Majority of GSM subscribers come from the rapid growth in Europe and Asia, specifically China, also in US GSM-1900.  Among top 25 markets, only Brazil, Argentina, Japan and Korea have not used GSM[1]. Japan is predominated by W-CDMA standard.  For all attention paid to CDMA systems by North America and Korea, the current worldwide subscriber base ratio (GSM:CDMA) stands at 5:1 in favor of GSM.   A brief comparison of the various popular digital wireless standards, namely GSM, CDMA, TDMA, W-CDMA, is discussed below.

GSM (Global System for Mobile Communication)

GSM stands for Group Special Mobile, now known as Global System for Mobile Communications, is the most common standard digital cellular phone service you will find mainly in Europe, Asia/Pacific, Australia and elsewhere around the world.  

To ensure interoperability between countries, these standards address much of the network wireless infrastructure, including the radio interface, switching, signaling, and intelligent network.  Since GSM is limited to technical standards, an association of GSM operators called the Memorandum of Understanding (MoU) ensures service interoperability, allowing subscribers to roam across networks.  Hence, GSM has gained widespread acceptance in several parts of the work, most notably Europe, with deployment in 52 countries by midyear 1994.  GSM subscriber data is carried on a Subscriber Identity Module (SIM) or so-called “smartcard” which is inserted into the phone to get it going.  As a result, the subscriber potentially has the option of either SIM card mobility or terminal mobility across multiple networks.


To facilitate the roaming on a global basis, GSM terminals incorporate one or more of the GSM frequency bands listed below:

GSM 400

·   450.4 – 457.6 MHz paired with 460.4 – 467.6 MHz or

·   478.8 – 486 MHz paired with 488.8 – 496 MHz

GSM 900

·   880 – 915 MHz paired with 925 – 960 MHz

GSM 1800

·   1710 – 1785 MHz paired with 1805 – 1880 MHz

GSM 1900

·   1850 – 1910 MHz paired with 1930 – 1990 MHz

 

CDMA (Code Division Multiple Access)

Code Division Multiple Access or Call Division Multiple Access (CDMA) is a name for a new form of digital cellular phone service.  CDMA is a spread spectrum technology that assigns a code to all speech bits, sends a scrambled transmission of the encoded speech over the air and reassembles the speech to its original format.  CDMA works by combining each phone call with a code which only one cellular phone plucks from the air.  The dispersed signals are pulled out of the background noise by a receiver, which knows the code.  This technology is pioneered by Qualcomm Inc., a San Diego company.  CDMA systems are designed to offer up to 10 times more call handling capacity than the conventional cellular systems by assigning a special electronic code to each call signal, allowing more calls to occupy the same space and be spread over an entire frequency band.  Several simultaneous conversations can therefore share the same frequency allocation.  As a result, CDMA technology becomes a very attractive solution to today’s congested spectrum environment.

 

TDMA (Time Division Multiple Access)

Time Division Multiple Access (TDMA) is one of several technologies used to separate multiple conversation transmissions over a finite frequency allocation of through-the-air bandwidth.  TDMA is used to allocate a discrete amount of frequency bandwidth to each user, in order to permit many simultaneous conversations.  It provides each user access to the entire frequency channel for a brief period, during which the user transmits data.  Each caller using TDMA is assigned a specific timeslot for transmission.  The users’ frequency channel is shared with other users who have timeslots allocated at different times.  A digital cellular telephone system using TDMA assigns 10 timeslots for each frequency channel, and cellular telephones send bursts, or packets, of information during each timeslot.  These packets of information are then reassembled by the receiving equipment into the original voice components.  TDMA promises to significantly increase the efficiency of cellular telephone systems, allowing a greater number of simultaneous conversations. Despite the higher capacity, TDMA faces similar issues in GSM that it will easily congest the limited frequency spectrum. Thus making it unattractive to expand into a higher capacity required by data traffic.

 

W-CDMA (Wideband CDMA)

W-CDMA is CDMA that operates on a wider bandwidth platform.  It is one of the major standard used in Japan.  The voice, images, data, and video are converted into a narrowband digital radio signal.  Then the digital radio signal is assigned a marker (spreading code) to distinguish it from other users, and is then spread over a frequency band that is anything from tens to hundreds of times wider.  


Comparing to CDMA, W-CDMA uses variable rate techniques in digital processing and it can achieve multi-rate transmissions.  This allows the construction of mobile multimedia networks that can cover from low to high speeds.  The major benefit is that even when transmitting at high speeds large volumes of data indispensable for mobile multimedia, such as video data, it can avoid the complexity of system configuration.  Therefore, it provides low costs and smooth full-motion video.

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MAJOR SUPPLIERS OF WIRELESS INFRASTRUCTURE IN THREE REGIONS

– United States, Europe and Japan

 

As background for assessing the wireless infrastructure markets, subscriber growth has been an important indicator – more subscribers mean more infrastructure sales to accommodate more customers.  However, the number of subscribers pales in importance to the volume of wireless traffic each subscriber generates. On the contrary, traffic volume figures will soon replace subscribers as the key metric in assessing the industry growth.  The key growth driver behind wireless infrastructure becomes the handling of a constant surge in wireless traffic as voice minutes shift over from the wireline networks and as data services add to the pie.  The relative market share among major wireless suppliers can be found in figure 3.  The clear message is that there are significant economies of scale for larger suppliers, and that smaller could face an uphill struggle to develop next-generation technologies on a small base. 

From the last 5 years, the market shares in wireless infrastructure as fairly stable, and the line-up of major suppliers is expected to consolidate further in coming years[2].  The reasons for this steady market shares can be attributed by the longevity of the installed base of equipment, high switching cost, huge capital investment in R&D and the scarcity of critical resources across the industry.

One of the major wireless infrastructure suppliers from each region is described briefly below. We will be looking at Motorola from the US, Nokia from Europe and NTT Docomo from Japan to illustrate the dynamics of the industry.

 

United States of America

MotorolaIn US market, Motorola is a major key player with their various innovative technologies and high quality. The company supports many standards. For analog cellular, they provide AMPS/NAMPS, TACS/ETACS and JTACS/NTACS. In digital cellular technology, they support TDMA, CDMA, and GSM/DCS1800.

Motorola reported that wireless infrastructure sales increased 11 percent to $1.8 billion, which is 19% of Motorola’s total sales.  Figure 4 below shows the sales revenue for Motorola’s network system segment.

To stay in the leading role in wireless technology, Motorola announced an effort to begin the standardization process for a new technology, which will offer operators a migration path to provide integrated voice and data speeds of more than 5 megabits per second on their existing CDMA infrastructure.  Clearly, competition for future wireless technology will be converged towards voice and data combination.


 

Europe

Go to www.nokia.comThe Finland’s company is the world's largest manufacturer of mobile phones and a leading supplier of digital cellular networks. The company is concentrating in Europe that contributes 53% of the company’s net sales while US market does for 25%. Figure 5 below shows the net changes of sales over the period from 1998 – 1999.  During this period, the company's sales increased at a faster rate than all three comparable companies. While Nokia enjoyed a sales increase of 48.4%, the other companies saw smaller increases: Telefonaktiebolaget LM Ericsson sales were up 16.8%, Motorola increased 11%, and Lucent experienced growth of 27.1%.


Nokia supports GSM standard, which is most common in Europe, and TDMA. The company is also expanding their business into EDGE (Enhanced Data rates for Global Evolution) and W-CDMA. Their challenge for keeping current market share and further growth would not so different from Motorola’s. The d
ifficulties in integrating the operations of newly-acquired businesses and achieving strategic objectives, cost savings and other benefits, and continued gains in the digital wireless telephone market and market acceptance of new products would remain for their future success.


 
Japan

In Japanese market, NTT Docomo Inc. (Formerly NTT Mobile Communications Network, Inc.) is the key player. It provides cellular and other wireless services including cellular phone services (PDC-Personal Digital Cellular System), PHS, dual-mode handset-Doccimo, which can combine the benefits of using cellular and PHS network in a single unit. Now NTT DoCoMo is expanding their service into Wideband CDMA (W-CDMA).


The company has a significant market share in cellular service as well. In 1999, the company marked 57.5% of Japanese market share. However, market share of PHS service is slowly decreased by 1.4% from 1997 to 1998, and decreased again by 5% from 1998 to 1999. It’s due to the high competition in the segment.

While the mobile communications market in Japan has grown remarkably, its wireless infrastructure market had started to show signs of slowing down due to economic sluggishness in recent years as Japan is facing the major challenge of emerging from the long-lasting effects of a slow economy. To enjoy the continuous growth, NTT DoCoMo finds ways to stimulate new market demands by investing its R&D efforts in new technology like W-CDMA and I-mode and many other derivative standards.

 
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WIRELESS MARKETS IN THE THREE REGIONS

 

United States

The United States is the world’s largest market for mobile phones, with almost eighty million subscribers. But at 26% of the population, the proportion of people with mobiles is lower than Japan (37%) and the Scandinavian countries (over 50%).  The low penetration rate (see figure 7 for the detailed penetration rate) could be attributed to abysmal service, and exorbitant “roaming” charges. Also, wireless networks have also been slow to upgrade to digital, largely because in the first half of the 1990s Congress dragged its feet over auctioning off spectrum.  Meanwhile, the majority of subscribers in Europe have migrated to use digital.


Although US have the strongest economy in the world, it lags behind in wireless industry. Some experts consider that many of the problems stem from its refusal to establish a national standard for digital. This may be true given the fact that Europe has the same digital standard for the entire continent while the United States is a battleground among technologies: TDMA, CDMA, and GSM (see figure 8 for details). These incompatible standards are irritating to consumers because they make it more difficult to roam across the country or to switch to a different service; they make it harder for manufacturers to achieve economies of scale they need to justify investing in infrastructure; and they sometimes lead to shortages of vital equipment. CDMA-based companies such as Bell Atlantic, GTE, and AirTouch were slow to sell digital service because, for most of 1997 and the first part of 1998, the appropriate handsets were too expensive and too hard to get hold of.


 

Figure 8: Standards Used By U.S. Major Wireless Carriers in 1998

Company

Revenues ($)

U.S. POPs Licensed to Serve*

Standard

Omnipoint

NA

126.6 million

GSM

BellSouth Mobility

2.6 billion

NA

GSM

Western Wireless

NA

58.1 million

GSM

AirTouch

3.9 billion

64.3 million

CDMA

Sprint PCS

1.2 billion

234.0 million

CDMA

Bell Atlantic

3.7 billion

56.9 million

CDMA

GTE Wireless

2.7 billion

NA

CDMA

AT&T Wireless

5.4 billion

314.6 million

TDMA

Nextel

1.8 billion

165.3 million

GSM**

* This listing by the population of the U.S. markets (or U.S. POPs) that a firm is licensed to serve differs markedly from market share rankings by revenues. Pops rank the major wireless players as far as prospective customers are concerned. This list suggests potential market position as the industry enters a phase of accelerated development, expansion, and in all probability, consolidation.

** Nextel operates on an enhanced specialized mobile radio (ESMR) platform with GSM principles.


 

The issue is further aggregated by the influence of political and economic motivations, which do not always keep in the best interest with technology reasons.  For instance, the North American GSM Alliance and the Universal Wireless Communications Consortium - the group that represents TDMA technology - announced that they will work together to promote a multiple-standard approach to the third generation development while backers of CDMA technology advocated the convergence of the GSM-based wideband CDMA standard and CDMA-based cdma2000 version under the so-called family of systems concept.  Obviously, the debate between multiple standards versus single standard is an intriguing one. With a single standard, competition is generally restricted to how vendors implement the specification; with multiple standards, there is more incentive to improve the specification.  However, it is hard to expect these battles among standards come to an end within several years.


 

Europe

Following the World Trade Organization’s (WTO) agreement to liberalize the telecommunications markets came into force in 1998, the European telecommunications industry is being reshaped, not by telecommunications alone, but also by a new breed of emerging carriers, mergers and service providers. It is growing incredibly fast. Subscriber growth for Europe as a whole has been about 60 percent annually. During 1997-1999 alone, average penetration for the European countries rose to 40 percent from 10 percent in 1993, and it's headed higher. While a number of factors contributed to that growth, the rapid decrease in per-minute costs played a major role.  Plus, an increase in competitors--from 20 to 46 operators--fueled that downward price spiral. By 2003, Europe's cellular market could top 140 million subscribers with $179 billion market worth (see figure 9).  The growth level will likely to be continued by the falling cost of mobile services, increased competition, seamless roaming service, and launches of GSM 900/1800 networks.  Future wireless market growth in Europe will also likely to be expanded by the introduction of 3G technologies.


 
Japan

NTT Mobile Communications Network, Inc. (NTT DoCoMo), Japan’s giant mobile communications operator which provides a comprehensive range of wireless service including cellular phone, paging, satellite mobile communication, maritime telephone, and in-flight telephone dominates the market with more than 30 million subscribers in March 2000 and consolidated sales of 3.1 trillion yen in fiscal 1998. The Company is now actively involving in domestic standardization, aiming at an early realization of a third generation mobile communications system based on Wideband Code Division Multiple Access (W-CDMA) in 2001.

While Japanese wireless carriers are ready to embrace W-CDMA, U.S. suppliers of upcoming CDMA-2000 cellular phone systems begin to fear that Japan is back to its old tricks of blocking competition by using its own, incompatible standard. The giant NTT DoCoMo will use W-CDMA, which means virtually all competitive Japanese wireless carriers will be forced to adopt NTT’s standard to interconnect with the Sumo network. That locks U.S. suppliers out of the competitive Japanese market, where carriers and traditional domestic suppliers are providing chips, handsets, and base-station equipment.  U.S. companies are instead developing new wireless equipment based on the alternative Qualcomm CDMA-2000 standard that will be deployed by the United States, Korea, and possibly China.  By contrast, many Japanese W-CDMA vendors, especially handset makers, intend to develop CDMA-2000 products to compete in the huge U.S. market.  Their U.S. counterparts complain this is just the same old story: Japanese rivals build up a strong sales base in their protected home market, and leverage this muscle to penetrate the open U.S. market.

Whether or not the same old story will appear on the stage of the world’s wireless industry as Uncle Sam’s worries, Japanese wireless industry seem to agree that a worldwide standardization of the next-generation mobile communications system is moving forward with International Telecommunication Union (ITU) as its core. As a result, Japan just submitted a proposal to the ITU based on W-CDMA. Of course it’s still too early to say which standard will be the winner of the next generation all over the world. It is pretty sure that W-CDMA will prevail over any other 3G technologies in Japan within several years, however.

 

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CHALLENGES FACING WIRELESS NETWORK OPERATORS

 

For wireless network operators with businesses to run, there are plenty of challenges ahead at the embarkation point to the next millennium. Amongst the most significant ones are:


 

Aggressive Pricing

The aggressive pricing has been a by-product of increased competition – has reduced the average airtime revenue per subscriber, for one. To increase revenue, it is imperative to attract new customers, encouraging subscriber MOU (minutes-of-use) growth, and deploying value-added, revenue-generating features such as unified messaging and network-based intelligent agents, as well as support for data applications.

 

Service Differentiation

How to challenge one’s service is another challenge for wireless network operators in this highly competitive industry.  Quality of service, including superior network availability, seamless roaming services, and customer care, are specifically important factors for new providers who need to offer service on par with or better than established providers. Other ways to achieve differentiation require an open service creation platform that cuts the interval for developing and provisioning compelling services that attract new customers and increase loyalty – such as virtual private networks for corporate customers, convenient unified messaging offers, and location-service. 

 

Evolving to Data-Centric World

With more than 150 million new people expected to jump on the Internet over the next two years, data communications is poised for explosive growth. Inevitably, these users will come to expect their on-ramp to Internet-based information to be accessible from almost anywhere, and wireless affords this convenience like no other technology.  This is also the reason why incumbent and new operators are beginning to plan accordingly.  Even as they manage current growth in voice and sophisticated calling and billing features, prudent network operators can now be prepared for the coming data onslaught with networks that combine the quality and reliability of today’s circuit-switched services with the improved data-handling capabilities of packet technology. To realize the economic benefits of packet technology as data traffic increases, however, operators need to have a solid course of action that will enable them to seamlessly evolve and migrate to packet-based networks from existing networks.

 

Changing Customer Requirement

Mobile users expect data applications to be available anytime, anywhere, and with the same convenience, speed, quality and flexibility that they have at the office or home. With a market that has grown accustomed to flat monthly rates for data, the question remains as to whether or not people are willing to pay as much for data on a per bit basis over the air as they are for voice.

 

Congested Spectrum

Operators in constrained spectrum must implement a transition plan to free enough spectrums and to support data applications while simultaneously serving voice customers. Many next generation operators have the added task of securing new spectrum as they plan their next generation path. For instance, in the highly congested spectrum environment like GSM, it is probably very difficult to secure additional channels to accommodate new data services. Therefore, alternative ways to reuse existing spectrum will be an attractive and immediate solution.

 

Evolving Technology Standards

The mission for the world’s wireless industry has been identified: it is to deploy high-speed high bandwidth wireless systems.  However, before one standard singles out as a winner, there are still competitions to churn out the worldwide acceptable wireless standard.  Wireless network operators will face higher uncertainties today in deciding the right technology to accommodate market needs in future except to pay much attention to its flexibility to migrate to another platform which deems relevance in future.  On the contrary, although much effort has been put in to bring wireless technologies to a higher ground, there has been little deployment of high-speed services to wireline customers. Will there be another wave of r/evolution to converge wireless/wireline technology remains questionable.  The migration of the technology generations towards the so-called third generation systems is shown in figure 10 along with likely introduction dates for the interim technology stages.

 

Figure 10

* GPRS = General Packet Radio Service

 

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ROLES OF IS MANAGEMENT

 

The factors mentioned above have direct impacts not only on wireless network operators but also on organizations that intend to implement wireless network system for internal use.  IS management within these organizations play an important role to identify the key concerns facing the implementation of wireless technology.  Therefore, there are two dimensions to look at.  The first one is the role and consideration for an IS manager in a wireless network operator or service provider, and the other one is for an IS manager in a wireless user company.

 

IS Management Roles in Wireless Network Provider

As a wireless network provider, the company’s IS management level should be concerned about the investment protection, forward evolution, backward capability, scalability, and network interoperability.  More details are described below.

 

Investment Protection

The last thing the wireless network operators want to hear is that there are going to a complete overhaul to get their networks ready for the next generation services.   Therefore, in selecting the appropriate wireless technology, one of the important criteria is to select network that allows step-by-step migration to next generation services that, to certain degree, enables lower cost of implementation.  Along the same line, the selected architecture should allow wireless network operators to selectively deploy the new generation technology – 3G technology – in areas where there is sound business justification, and to use their existing 2G network to supplement 3G coverage for ubiquitous service.  This argument holds true for new operators as well.  New licensees will selectively choose wireless architecture that builds core platforms that are compatible with today’s digital platforms, yet allow flexibility an offer revolutionary choices for selecting next generation solutions.

 

Forward Evolution

For incumbent operators, a path for incremental evolution to IP-based models that deliver higher capacity and advanced services is imperative to avoid obsolescence. A wireless network architecture that is designed to evolve to provide the next generation voice and data capabilities subscriber will demand in the future seems to be a winner.

 

Backward Capability

In order to create networks that offer seamless coverage and compatibility with today’s widely-deployed, commercially-successfully networks, regardless of embedded technology standards, a wireless architecture must preserve backward compatibility with contemporary digital technologies.

 

Scalability

Perhaps scalability is one of the most important factors to influence on wireless operators decision on selecting the right wireless technology. In order to ensure the existing networks can support the growing subscribers base, the technology platforms chosen must be proven to be upgradeable and scalable to accommodate higher traffic.

 

Network Interoperability

For years to come, today’s networks – incumbent and new, wireline and wireless – will have to co-exist. Creative ways are needed to make them work together seamlessly.  For this reason, wireless system providers have invested in the capabilities necessary to offer the leading network options for IP and packet-based networks.  For instance, Lucent enthusiastically supports the Operators’ Harmonization Group’s framework of backward compatibility between alternative modes of CDMA radio technology and today’s mobile networks – regardless of current standard. Lucent is also well-positioned to build on the commonalities between evolved TDMA and GSM networks through General Packet Radio Service (GPRS) and the Enhanced Data for Global Evolution (EDGE). This example demonstrates the importance of interoperability not only applicable to wireless-to-wireless, wireless-to-wireline, but also applicable to wireless/wireline and future generation of networks.

 

IS Management Roles in Wireless Network User

Apart from the challenges faced by the wireless service providers, some major concerns for the IS management level of the wireless network users are top management support, technology alignment with business needs, systems planning, operations and maintenance, human resources management, and outsourcing decisions.

 

Top Management Supports

Wireless technology involves extensive capital and human resources investment. Benefits to the company by deploying such technology must be communicated clearly to top management.  This is to ensure that commitment and supports from top management will be given to implement a successful project, given a full capital and resources coverage. Furthermore, commitment from top management also guarantees minimal interruption during the process to introduce changes or new technology.

 

Technology Alignment with Business Needs

The successful technology connects the user convenience to the business needs.  IS management plays an important role here to analyze the current business requirement and find out the feasibility of wireless systems to fill the gap and to provide improvement to existing operations, if it is necessary at all. This alignment will help organizations to protect their investment by making appropriate decisions based on business requirement rather than following the trend. 

 

Planning

During the network planning process, IS management must recognize the potential risk of technology advancement that has in part makes current platforms obsolete. Therefore, much emphasis must be put on the flexibility, scalability and upgradeability of the wireless systems when making recommendation.  In addition, if integration with existing platforms is needed, the higher the interoperability of the new system, the better it provides seamless integration. However, it also means higher complexity.

 

Operations and Maintenance

Although interoperability allows multiple systems to work together as a complete system, telecommunications application become much more complicated when different technological standards exist concurrently. Most importantly, the system would be not only too complex to operate but also expensive to maintain under these circumstances. Since readiness and cost of operations and maintenance are both vital issues in terms of IS management, eventually IS managers are often forced to make tradeoffs between service coverage that supports multiple standards and the serviceability of these platforms.

 

Human Resources and Training

Like many other technology intensive industries, the critical resources are scarce especially in wireless arena. One point evident over the past years is the difficulty of building critical mass and experience in software and radio frequency engineering skills. These pools of expertise do not crop out overnight.  Comprehensive training program may help to fill the gap but it is far more important find ways to retain existing talents once they have developed these unique skills.

 

Outsourcing

The complexity of wireless technology might outweigh the capability of existing IT resources within the company. Given a tight implementation schedule and limited resources, company may consider outsourcing as an alternative solution to overcome its shortcomings in terms of skilled labors to implement the systems.  However, much effort needs to be carried out carefully by the company before engaging with outsourcing. Issues such as relationship management with outsourcers, human resources allocations, cost, communications involves outsiders, protection of proprietary information and so on should be addressed.

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CONCLUSIONS


Today several wireless standards are available in the market and technology continues to evolve.  Even though each standard has dominated different regions, it is trying to expand and offer better roaming services.  Because of the competitive and dynamic characteristics of the wireless industry, it is a challenge for both wireless network providers to stay competitive in the market and wireless users to choose, operate, and maintain the standard that best fits the company’s need.  IS management plays important roles to serve those purposes and only after carefully evaluating and considering different dimensions in the industry can they make the best decisions.

 

 

- Authors

MBA Class 2001:     Yihuei Chan - Hasbay Kadri - SukYoung Lee - Laksana Ratanasiriwilai - JengBin Tsai
Date: May 8, 2000


[1] 1999 ITU Telecommunications Review. www.itu.org

[2] Morgan Stanley Dean Witter Equity Research, June 1999. www.msdw.com