3G and Telecom Market

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4. 3G TECHNOLOGY AND BANGLADESH
4.1 3G Service
3G is the third generation of wireless technologies. It is also the general technology for mobile
networking, passing the recent 2.5G. Introduction of this technology has given a new impetus
to the mobile phone concepts making the device an advanced multifunctional instrument. It
now offers the user, a wide range of facilities. The most important among them is the spectral
efficiency. Faster and improved efficiency in the system has contributed to the availability of
broadband internet in the mobile phone. The technology is founded on the ITU. It comes with
enhancements over previous wireless technologies, like high-speed transmission, advanced
multimedia access and global roaming. 3G is mostly used with mobile phones and handsets as
a means to connect the phone to the Internet or other IP networks in order to make voice and
video calls, to download and upload data and to surf the net.
Figure-3: Diagram of 3G Technology
3G networks allow network operators to provide users a bigger range of the latest services, as
it gets bigger network capacity via heightened spectral efficiency. The included services are
video calls, wide-area wireless voice telephone and broadband wireless information, all
included within the mobile environment. More features included are HSPA data transmission
capacities that can send data rates 14.4 Mbit/s on the downlink and the uplink at 5.8 Mbit/s.
Figure-4: Technical differences of 1G, 2G, 3G Technology
Internship Report Page 37

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4.2 Evolution of 3G:
Evolution of 3G describes updating cellular telecommunications network around the world to
use 3G technologies. Japan was the first country to commercially launch 3G in 2001. The
transition to 3G was completed during 2005/2006 in Japan. In 2005, there were 23 networks
world wide, operating 3G technology. Some are only for test use and some operators are
providing services to consumers. The main reason for the evolution of 3G was due to the
limited capacity of the 2G networks. 2G networks were built for voice calls and slow data
transmission. But these services were unable to satisfy the requirements of present wireless
revolution.
International Telecommunication Union (ITU) has defined the demand for 3G in the
International Mobile Telecommunication (IMT)-2000 standards to facilitate growth, increase
bandwidth, support diverse applications. The development like 2.5G or GPRS (General Packet
Radio Service) and 2.75G or EDGE (Enhanced Data rates for GSM Evolution) technologies
resulted in the transition to 3G. These following technologies act like bridge between 1G&4G.
4.3 Features of 3G:
The ITU (International Telecommunication Union) has proposed 3G telecommunications
standards to provide cost efficient high quality, wireless multimedia applications and enhanced
wireless communications. The features of 3G can be divided into two categories. One is data
rates and the other is security.
· The main feature of 3G technology is that it supports greater voice and data capacity
and high data transmission at low-cost. 3G mobiles can operate on 2G and 3G
technologies.
· The second major feature is the security: 3G offers greater security features than 2G
like Network Access Security, Network Domain Security, User Domain Security,
Application Security.
· This technology provides localized services for accessing traffic and weather updates.
Video calls and video conference is another major feature in 3G mobile technology.
These features reduces the communication barriers between people, that were not
sacked even with mobile phones.

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Figure-5: 3G application & services
Date transfer rates are high and can support even live TV channels over phone. Online media is
another exciting feature in 3G mobiles. 3G mobiles highly attract the music lovers as they can
listen to music and watch videos online and can download huge files with in less time.
a. 3G Technical Specifications:
The transfer rate for 3G networks is between 128 and 144 kbps for devices that are moving fast
and 384 kbps for slow ones(like for
pedestrians). For fixed wireless LANs,
the speed goes beyond 2 Mbps. 3G is a
set of technologies and standards that
include W-CDMA, WLAN and
cellular radio, among others.
b. 3G different from 2G and 4G
While 2G stands for second-generation
wireless telephone technology, 1G
networks used are analog, 2G
networks are digital and 3G (third-generation)
technology is used to
enhance mobile phone standards.3G
helps to simultaneously transfer both
voice data (a telephone call) and non-voice
data (such as downloading
information, exchanging e-mail, and
instant messaging. The highlight of 3G
is video telephony. 4G technology stands to be the future standard of wireless devices.

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4.4 3G Services and Applications
The following services/applications available in 3G technology:
· Broadband Connectivity
· Video Calling
· Mobile Music
· Online Gaming
· Mobile TV
· M-commerce
· Video Conferencing
· Universal Roaming
· Localization base services
· Messaging services
4.5 Advantages of 3G:
3G has provided a new way of life among mobile phone and handset users. Consumers are
quickly getting on the bandwagon and investing in 3G-powered devices and tools. All the
functions performed in a normal 2G
mobile device can be performed in 3G
at a higher speed. There are now a
number of 3G terminals with
advanced functionalities in the
market. With 3G networks, consumers
will have access to mobile Internet,
faster browsing, streaming and
downloading and business
functionalities. In a rapidly
globalizing economy, broadband
networks are essential basic
infrastructure, as vital to economic
and social development as networks
like transport, water and power. 3G
will see a wave of utility options in
marketing and distribution of
agricultural produce, as it would result
in having access to the nearest
markets, real time updates of market prices, and elimination of middlemen and thereby
rendering their business commercially more viable. Few applications of 3G are:
· 3G provides faster connectivity, faster internet access and music with improved quality.
· 3G technology provides high quality voice calls and video calls.
· 3G also includes mobile office services, like virtual banking and online selling.
· Getting information is one of the best features of 3G technology. Users can also watch
the latest news and headlines, getting data like the weather, sports and economic
details.
· The 3G mobile can be used as a modem for a computer which can access internet and
can download games and songs at high speed.
· View live TV broadcasting in mobile. Get weather updates and news headlines in
mobiles.

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· 3G increases bit rate which helps the service providers to provide high speed internet
facility and many applications to its customers.
· 3G allows users to be online all the time.
· 3G devices can provide data transmission speed upto 2Mbits/s when used in stationary
mode
· Provides multimedia services such as sharing of digital photos and movies.
· This technology provides real time multi player gaming and location-based services.
4.6 Drawbacks:
Though there are many advantages with 3G technologies, there are few drawbacks like
· Upgrading the base station and cellular infrastructure to 3G incurs very high costs.
· Service provider has to pay high amount for 3G licensing and agreements.
· Problem with the availability of handsets in few regions and their costs.
· High power consumption
4.7 Summary
3G technology provides high data rates and improved call quality, video calling facility and
much more. This technology
provides huge benefits to
mobile users. The major
drawbacks are from the regions
where 3G is in initial stages of
launch. These drawbacks can
be minimized when 3G
services are used extensively.
Mobile phone market is
functioning in a highly
competitive environment. The
consumers have wider choices
in the selection of the right
device. As an expensive utility,
the shopping requires care and
caution. It is a well known fact
that online shopping is a
convenient and cheaper option
of the day. The consumer can
browse internet and locate a
reliable and reputed online
dealer to buy the product.
Mobile phones with 3G technology incorporated in them are available in different brands and
models. Other areas that have benefited from this aspect are; online entertainment, online
messaging, online news network and online security. Among the lot, the entertainment savvy
folk exults, for their breaking free from stodgy GPRS and EDGE to download large files in
quick time. Finally, messaging sector also experiences a boom with more and more brands
furnishing their flagship models with enhanced applications like Instant Messaging etc

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4.8 INTRODUCTION OF 3G TECHNOLOGY IN BANGLADESH
4.8.1 Introduction
The total number of mobile subscribers in Bangladesh at the end of 2011 was slightly higher
than we had previously estimated. According to data provided by the BTRC and mobile
operators, there were 92.570mn subscribers, a penetration rate of 61.5%. in the country in 17th
position out of the 18 Asia Pacific countries covered in our reports. The underdeveloped
situation is also present in the fixed-line and broadband markets as we envisage only 1.069mn
fixed-line and 448,000 broadband subscribers in the country at the end of 2012. While we
expect growth in all three sectors, the pace is likely to result in Bangladesh further lagging
behind its peers. The introduction of 3G services could threaten Bangladesh's WiMAX
industry, which had 323,307 subscribers at the end of February 2012. Despite the imminent
threat, there is a positive that could emerge from the launch of 3G services. Operators are
expected to aggressively market their services, thereby raising the profile and awareness for
mobile broadband technologies. While we expect customers with basic needs to be attracted to
3G services, consumers and businesses that demand higher speeds could turn to WiMAX..
4.8.2 Present Market Scenario of Bangladesh
The mobile market scenario of Bangladesh is different in many aspects with outside world.
The key points are as follows-
· High growth but low ARPU (probably the lowest in the world).
· Licensing 6 mobile and 12 PSTN operators question about regulator’s vision.
· Huge unnecessary investment has been made in absence of policy of resource sharing.
· Absence of policy against SMP (Significant Market Power).
· WiMAX licensing questions 3G licensing at present stage.
· PSTN operators are in the question of survival.
Exhibit-2: Internet purpose in Bangladesh

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The key potential of the market is the high population density. Probably this factor has dared
the operators to be aloof of resource sharing.
4.8.3 Challenges and opportunities with 3G Technology in Bangladesh
For emerging markets like Bangladesh, India, China or Brazil, where teledensity is still below
50%, the business case for 3G is even weaker. In Bangladesh , 3G is not expected to be
pervasive from the word go. It will be introduced in pockets based either on geography or on
user segmentation. Operators are talking about covering the metros, then urban areas and
finally moving to rural areas. But immediately, businesses and sectors like education and youth
need bandwidth. If and when 3G rolls out, the focus will still be on voice applications for some
time to come, before the data applications, including video, take off. The first thing operators
would do, post the 3G rollout, is to improve quality of voice services in metros and large cities.
Users with a high billing per month would be moved to the 3G network and entry-level users
with low billings will remain on 2G networks. Once the quality of service (simply meaning
less call breaks) has been addressed, other applications will roll out slowly. Some such
applications are easily evident such as Person to person video call may not be the right thing.
But customers accessing content from the video portals would take off.
Mobile operators will get technology neutral spectrum licences for high-speed internet
operations through an auction in September this year. The auction will begin with a floor price
of Tk 240 crore for per megahertz (MHz) airwave in 2100 band to award five licensees,
according to draft guidelines prepared by the telecom regulator. 50 MHz from 2100 MHz band
(2110 MHz to 2160 MHz) has been selected for auction. Due to the technology neutral
spectrum licensees, the operators will be able to go for either 3G or 4G operations. Three
licensees have been suggested for the existing five private operators, while one is for a possible
new entrant and the other is for state-run Teletalk, However, if the new entrant does not take
the licence, an existing local operator will get it. Each of the winning companies will be given
10 MHz spectrum. The floor price for per MHz spectrum will be BDT 240 crore (USD 30
million) and the difference between each call will be USD 0.5 million at the auction. The
regulator has suggested the floor price of the auction on the basis of the experiences of 2G
licence renewals for mobile operators in Bangladesh and the 3G auction in India.
Grameenphone has given almost BDT 240 crore for per MHz spectrum to renew its 2G
licence, and so the amount of the floor price is not very high, according to BTRC chairman.
With 3G technology, users can make use of both speech and data services simultaneously,
without much compromise on data transmission rate. Also, the above mentioned features are
apart from normal voice calling, SMS and MMS services found in a typical mobile handset.
3G mobile broadband typically refers to the delivery of end-user downlink data rates of 500
kbps or more while providing full mobility. High Speed Packet Access (HSPA) technology is
already enabling the delivery of commercial 3G mobile broadband services in excess of such
speeds, and is proving itself as the logical choice for operators wanting to offer mobile
broadband services to both urban and rural consumer and enterprise users. 3G mobile
broadband usage is expected to grow exponentially over the next four years, bringing the
Internet to 1 billion people globally by 2012. Limited fixed-line infrastructure in many
developing countries means limited fixed broadband growth capacity. 3G HSPA is the
government’s best bet to improve broadband internet access. Developing countries already
shown that mobile broadband penetration can overtake fixed broadband penetration in a matter
of months.
None of this is happening yet. But consumers are hoping it will be possible soon, when the
much-awaited 3G and 4G networks are rolled out. But there is one problem. Two big
stakeholders in the 3G ecosystem—the government and, strangely enough, telecom operators

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—seem to be in no hurry to get 3G networks running. Telecom companies, one would imagine,
will be impatient with the delay. But they aren’t. The cash crunch is one reason why, but it’s
not the only one. Some operators are busy rolling out new 2G networks and they want 3G
auctions to be delayed, so that they could avoid an immediate additional capital expenditure
burden. Existing 2G networks are still seeing 1 million subscriber additions every month. So,
why rush into 3G? Especially since it calls for substantial investments—besides the minimum
BDT 2400crore licence fee (that the BTRC is demanding), an operator may have to spend
another BDT 3,000 crore to roll out a countrywide 3G network. The fact is operators, with the
possible exception of Grameenphone, aren’t geared up for such spends now.
Globally, many governments have struggled to solve the 3G puzzle. Europe hyped up 3G,
charging well over USD 100 billion in licence fees earlier this decade, only to find companies
that won the bids struggle under the burden. But China simplified the puzzle, China issued
licences to three operators—China Mobile, China Unicom and China Telecom—to roll out
high-speed wireless services at a very nominal spectrum fees. It is estimated that almost USD
41 billion would be pumped in to build the third-generation networks and, in turn, give some
stimulus to a slowing economy. Bangladesh as usual, complicated the process even further.
After the European disaster, most other countries in Asia-Pacific have been content with far
lower licence fees. BTRC suggest that the auctions for 3G licences could raise minimum BDT
12,000 crore. That money could come in handy for the government in a difficult economic
environment.
Globally, profits have been elusive for 3G operators. A pure-play 3G operator like Hutchison
is yet to make money after almost six years of operation in Europe. British Telecom ran into
trouble due to higher 3G licence fees and, ultimately, had to quit the mobile business. 3G
return on investment has not been attractive enough globally, Many operators have even given
up all hopes of recovering the big investments made and have started writing-off the licence
fee payments they had made.
In Bangladesh, it will take at least three to four years after the rollout for 3G revenues to take-off
and 3G does not make much difference to revenues in the initial years. But big investments
will have to be made upfront. Contrary to popular perception, a shift to 3G is not just a
hardware or software upgrade on the existing infrastructure. It demands a new network and a
high bandwidth backhaul (the backbone on which the long distance voice and data traffic is
carried) either on fibre or microwave link. A majority of the investment might go in creating
the backhaul. Actual investments will depend on what speed they are looking to offer. The
auction price will also impact the rollout plans.
High initial investments, policy uncertainty, long gestation period and very few business
successes in 3G have all spoiled the party. So, is there a business case at all for 3G? The
financial model of 3G is built around high-speed data connectivity that helps in increasing the
average revenues per user of the operator. In addition to increased network bandwidth, 3G
promises better spectral efficiency. This means more subscribers can be serviced—both on
voice and data side—simultaneously in the same amount of spectrum, leading to better quality
of service. The business case will be a function of how operators exploit the market demand,
get their cpex/opex right and achieve economies of scale as fast as possible.
Therefore, there is no urgency to invest big money in a countrywide 3G rollout. Operators will
go slow. The 2G growth story is still compelling for them. Theoretically, this is attractive for
Bangladeshi operators, who have seen their average revenue per user (ARPU) slide from
almost BDT 600 a month to less than Rs 200 in just five years. Although volume growth has
offset the drop till now, over time, as the use of data-intensive applications increases, 3G can
increase revenues for operators. The challenge, therefore, is to bear the cost of the licence fee
and infrastructure investments over a long gestation period, before profits can come. In the

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current environment, only few cash-rich players, like Grameen Phone, will want to take the
bet.
4.9 TELETALK 3G INTRODUCTION
4.9.1 Background
The state-owned Teletalk mobile company will introduce 3G services for its subscribers. The
company on Monday signed an agreement with China National Machinery and Equipment and
Export Corporation (CMEC) for introduction of 3G services in the company and expansion of
its existing 2.5G services.3G networks enable faster data transmission and advanced services.
It supports a diverse range of applications. Download speed is much higher in 3G networks.
Subscribers of 3G services could easily enjoy TV programme.The project will be implemented
at a cost of Tk 2,000 crore, of which China Exim Bank will give Tk 1,500 crore as loan
assistance. The initial target of the 3G mobile service launching is the divisional cities as about
one million subscribers use 3G-enable cell phone there across the country. Initial price for a
3G-enabled SIM will be Tk. 1,500 while existing users will get preference. Primarily, 3 lakh
subscribers will get 3G SIMs through lottery and another 4 lakh in next December, the industry
insiders confirmed. The 3G mobile service, technically called high-speed packet access
(HSPA) is mainly wireless broadband facility. A user can easily get access to the facility via
3G-enabled mobile handsets, smart phones or 3G-modems. Primarily, Dhaka-based users will
avail the 3G service, which will be enlarged gradually.
4.9.2 3G Data Service Market for Teletalk
A. Mobile Internet
Handheld mobile Internet access is very popular in emerging markets because handsets are
much more prevalent than PCs. It
is enjoying rapid uptake due to
multiple factors, such as: (1) fast
3G connections – statistics show
twice the uptake of browsing
services with 3G versus prior
technologies, (2) reasonably
priced access plans, (3) the arrival
of easy to use, fast-loading micro-browsers
that run on little
memory, and (4) widgets and
quick launch icons. One example,
Tata India’s Mobile Internet is
targeted to mass consumers. It
takes advantage of small footprint
browsers (100-160KB) from
Opera & Novarra optimized for
use on low end phones. At the
same time, they offer full HTML
capability in addition to WAP, and
support text, image, and video
with fast loading. Mobile Internet
browsing will be enjoyed fast
uptake in Bangladesh and a data
market in business.

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TELETALK
Offering
B. Mobile Music
Music is a highly desired service in every culture, and with the advent of technology and
business model refinements, a broad range of mobile music services have enjoyed success in
emerging markets. Some of the technology advances include cost reductions of audio enabled
devices, the introduction of higher speed 3G networks capable of downloading and streaming
rich media to many users at once economically, and UI improvements that ease music
discovery and purchase. By 3G technology, Teletalk provides mobile music services to its
users. It lets users download free music related contents like full-track songs, ringtones &
wallpaper in exchange for viewing Ads embedded in the contents. Clearly there is a wide range
of compelling music services and business models that are taking root in emerging markets.
C. Wireless Broadband
Wireless Broadband is one of the most fundamental
services and core revenue drivers in many countries.
It has been highly successful as a Fixed Broadband
alternative given the lack of such infrastructure in
many places and the high cost of laying new copper.
By 3G technology, Teletalk provide warless
broadband to its users. These include such elements
as focusing on particular customer segments
(typically including SMB), being early to market,
gaining good coverage, offering compelling 3G data speeds, providing economical and easy to
use devices and offering affordable, value priced services.

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D. Social Networking
Social Networking services are highly successful in all markets, emerging and developed. In
2012, Intel estimated that 37% of all Internet traffic was Social networking related. Such
services typically include creating mobile Internet portals where members can find and connect
with past colleagues or new acquaintances based on common interests. Teletalk users usually
interact by blogging text, photos and videos to a personal site, and then communicating via
email, IM, SMS, etc. Despite appearing as luxury services, they have proven to be fundamental
communication vehicles that even people with very little disposable income are willing to pay
for. Facebook Mobile has extended its dominant wireline Internet services to the mobile. It is
being deployed by over 150 operators worldwide, including many in emerging markets, and
many of the largest in the world: e.g. Vodafone, etc. Facebook’s service is the typical blog and
chat format with instant alerts so members will know there are blog updates or messages.
Success of social networking in emerging markets has been linked to a variety of factors such
as: (i) extending proven wireline sites to the mobile Internet, (2) providing tools that allow one
to easily build mobile websites, and (3) ensuring that the sites are readable on many devices.
E. Mobile Advertising
Mobile Advertising has proven effective in many markets, emerging and developed. With its
exceptional reach, immediacy and relevancy, mobile advertising enjoys higher response rates
than most other advertising media (e.g. 3-5% click through rates are common), and
consequently higher Ad rates (e.g. CPM up to $50). Teletalk Mobile Advertising exists in a
variety of forms, such as messaging (e.g. sending coupons by email or SMS), ad banners on
the mobile web, ads returned with search results, and ads embedded in contents like music,
videos & games.
F. Mobile Commerce
Mobile commerce and banking also pose large opportunities for operators in emerging
markets. Juniper To date hundreds of operators are engaged in a broad range of mobile
commerce activities, including mobile banking, P2P payments, M-Ticketing, POS payment,
Mwallet, etc. These services not only provide new revenue streams but are also known to
reduce churn by increasing switching costs. One extremely successful M-banking category to
date has been P2P payments. These include the fact that a large fraction of its population is
without bank accounts, yet needs to send money to friends, relatives and business associates,
often at substantial distanceTeletalk is planning next generation, browser based services with
broader payment and banking capabilities which will leverage the higher speeds and lower
latencies of its 3G network. Moreover, operators who are trialing mobile couponing and Ad
embedded content (like music & gaming) aim to gain from 3G’s lower cost of delivery and
higher speeds.
G. Video related services
With the introduction of EV-DO Rev A and HSPA to
emerging markets, Teletalk now have sufficient
capacity and low latency to implement video services
and are actively deploying them. Of greatest interest to
most are streaming services given their ability to work
on devices with little memory and thus enable more
users. Services like Teletalk TV, News, Entertainment
and Sports etc. Many other operators are leveraging
video in a similar fashion to enhance ASPs of voice and
data service bundles.

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H. Social improvement services
Social improvement services involve those that are intended to improve the health, education
or welfare of a population, and because of this are often subsidized by government agencies or
non profit organizations. They are important for operators because they represent ways to do
good for the community as well as to build goodwill with government and regulators, and to
gain financial support. Such initiatives also let Teletalk economically explore new business
models with reduced risk. With the goal of making broadband accessible to rural populations
that lack wireline infrastructure and where the residents were generally too poor to afford such
services individually, Teletalk can created a business model that focused on lowering the cost
of delivery to consumers and small businesses. By amortizing HSDPA capacity over many
users concentrated in rural Kiosks, and charging more for business services than consumer
ones, Kiosk owners could make the services affordable to both constituents and obtain enough
volume to make a good living. Further, by offering a full complement of data, voice and fax
services, Kiosk owners became a ‘one stop shop’ for users and were able to vitally supplement
their ARPUs. In the process, it was able to create much needed jobs for remote communities
and connect them to the rest of the world.
4.9.3 Conclusion
Emerging markets like Bangladesh are highly attractive and rewarding to wireless operators.
Although dominated by low income subscribers, operators have crafted diverse business
models that enable profitable operation, including ones with low entrance tariffs, Ad subsidies
and government/non-profit support. Using such models and exploiting the cost and
performance gains of 3G networks, operators have deployed a broad range of data services that
vitally improve ARPU and profit. Such services already include mobile Internet, mobile music,
wireless broadband, social networking, mobile advertising, mobile commerce, video related
services and social improvement services. Many others have been deployed and warrant
separate and detailed discussions. Through these innovative 3G data services and business
models, operators like Teletalk continue to improve the quality of life for citizens of emerging
markets.

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