MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | C.D. TAM
PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | C.D. TAM
Regional Vitality in the 21st Century
April 6-10, 2001 — Tokyo, Japan
Mr. CD. Tam
#1 Title Slide Mr. Tam’s introduction. #2 Re-Thinking the Internet Based on what we read and hear it seems these days that people have become a bit disillusioned with the Internet... and the Wireless Internet. Two examples: First there’s the collapse of the not-for-profit dot.com industry. People lost their shirts chasing profits that just weren’t there. Expectations were hyped that there was big, easy money to be made. There wasn’t. Many investors lost fortunes in Internet stocks. And they blame “Internet technology”... rather than greed. The second is the hype surrounding the Wireless Internet. Wireless Application Protocol... or WAP... was supposed to quickly deliver the world of the Internet via cell phones. Consumers had high expectations! Unfortunately the 2G GSM network just can’t deliver on the hype. Although practically every businessperson I meet carries a cell phone... .Wireless Internet Services are just too complicated and too time consuming to use. GSM WAP phones did not make it in Europe and Asia. The only bright spot was I-mode, pioneered in Japan by NTT DoCoMo. It showed a glimpse of the wireless data world that is yet to come. Because apart from the bust of dot.com shares, the Internet did create a new economy in the United States in terms of efficiency. #3 Wireless Internet I want to say that wireless devices and services will have an even greater impact in the next 5 years... than the Internet did in the past 5 years. This time... the Asia-Pacific region, including Japan, can reap this benefit! With our countries still recovering from the Asia-Pacific financial crisis and Japan trying to get out of a prolonged slow economy, we need this regional vitality. #4 Linking People’s Dreams with Technology’s Promise The Wireless Internet will be one of the major new conduits to feed our insatiable cravings for communications and information. It will link people’s dreams to technology’s promise. The key questions are:
#5: Wireless Internet: Technology. Apps. Spectrum cost. I think the answers can be found in three key factors that I’ll address this afternoon:
#6 Wireless Internet: Wireless Technology Landscape The wireless world, through the cellular phone, has developed a rock solid base in Asia-Pacific with huge growth momentum. #7 Subscriber Growth: 2000-2004 Last year there were over 200 million cellular subscribers in the region. In three years, that number is forecasted to grow to close to 400 million... about 40% of the projected worldwide total of 1billion. #8 2G in the Region 2G is designed for voice communications. The dominant technology for 2G in the region is GSM... followed by CDMA 1 and PDC/PHS are specialty technologies used in Japan. #9 2.5G in the Region The most expedient and economical answer to bringing Wireless to the Internet in this region is by upgrading existing voice-only 2G cellular networks to 2.5G which provides voice and fast data capabilities. More importantly, this also provides a packet-based environment that provides an “always-on” feature, without dial-up. NTT DoCoMo’s I-mode success in Japan has demonstrated this is a key requirement which 2G GSM and CDMA-1 did not provide, but 2.5G will. Fortunately it is quite easy to upgrade existing GSM and CDMA1 network in Asia to 2.5G with a relatively small investment in Asia-Pacific. Thus, you can see in the world of 2.5G... GSM, through GPRS, will continue to be the dominant cellular technology once the upgrade is done.. #10: 2.5G 2.5G will enable us to communicate, transact and get information faster, easier and better with high speed, always-on Wireless Internet Here’s a brief look at the technologies which enable the upgrade to 2.5G #11 2.5G: GPRS & 1X; 2.75: EDGE
According to Gartner Dataquest:
Originally, 2.5G was seen as a stopgap solution for mobile data services and a pit stop on the road to 3G. But based on operator commitments, 2.5G is becoming a significant standard in the region... and, outside of Japan, can create a 2 to 3 year overlap with 3G networks and services... #12 3G Let’s turn now to the high speed voice, data and video world of 3G. And it’s current state of play in the region. 2.5G is an easy migration solution to the Wireless Internet in this region because it requires only an incremental investment on existing networks. New handsets, supporting wireless data, would need to be purchased. 3G, as you know, requires a major investment in infrastructure and handsets. 3G operates in new spectrum that may need to be purchased. Japan is the first in the world to develop and commercialize 3G networks. NTT DoCoMo will be introducing the world’s first 3G network in Japan in May. And NTT DoCoMo has been pushing this as a world standard. #13 WCDMA Tidal Wave
#14 Wireless Internet: The Right Wireless Apps The second answer to delivering the Wireless Internet to Asia-Pacific are having the right wireless applications in the right languages. #15 Wireless Content & Services There’s a growing universe of wireless content and services under development. While I don’t expect you be able to read everything on this chart, I do want you to know that there’s a world of opportunity waiting for us on the Wireless Internet. #16 Evolution of Wireless Services In the evolution of wireless services in the region, 2.5G enables us to economically leapfrog into high speed data services now during our evolution into the 3G world which, outside of Japan, may take more years than originally anticipated. To make the Wireless Internet work, we need two things. Handsets. And content. The availability of handsets needs to coincide with the launch of GPRS service and the availability of applications. This is a vital requirement proven by the NTT DoCoMo I-mode success in Japan. #17 GPRS WAP Handsets We can access the web without wires with WAP-enabled GPRS handsets and devices that are available now. My personal favorite is this combination cell phone and PDA with Chinese handwriting recognition, called Tai Chi, on GPRS. #18 Asian language applications: WAP developers There’s an enormous window of opportunity for content and M-commerce services in national languages. Content developers and entrepreneurs in Japan, Korea, China, Taiwan, Hong Kong, Malaysia and others have climbed through this window. But for the wireless Internet to realize it’s full potential, we need many, many more. #19 GPRS WAP Applications The time and technology is now right for development. GPRS can meet consumer expectations for fast and convenient WAP use... There’s a growing range of GPRS WAP content and services for teens and adults that are being developed in the region right now. With GPRS infrastructure, handsets, and applications... the region, outside of Japan, has an economical and effective Wireless Internet solution. When consumer needs build demand for new applications requiring higher band width, then a move to 3G makes sense. The biggest obstacle to the implementation of 3G in the region is the huge investment required. #20 Wireles Internet: Spectrum cost We can help ensure a major overall lower cost of 3G networks... and accelerate 3G development in this region... by not auctioning spectrum at industry destroying premiums. The third answer to delivering the Wireless Internet to the Region... is keeping spectrum costs reasonable to enable the golden goose to lay the golden egg... or we’ll kill the goose before it can. #21 3G in Europe After spending over $100 Billion for spectrum, carriers will need to spend just as much on new equipment for new networks. Who eventually ends up paying for these astronomical costs? It’s passed through to consumers who may end up having to pay astronomical charges for content and services. Consumers would just decline to subscribe, slowing acceptance further. I don’t know how it will shake out in Europe. But I do know I don’t want their problems in Asia-Pacific. NTT DoCoMo has proven that we need low cost services to realize cost-efficient productivity gains. High spectrum costs won’t enable this. Low cost spectrum will. Fortunately, the Japanese government has taken the right approach. #22 3G in Asia-Pacific Fortunately, pragmatic spectrum allocation models seem to be settling into the region.
Is there a need to balance national interests with commercial interests? Absolutely. But in this case... ensuring a successful win-win model for the wireless web is in national interests. The cost of spectrum is a “make or break” issue. Here’s a call to action... In the upcoming rounds of spectrum auctions throughout region... we, as an industry... must collaborate and coordinate with government to ensure that the golden goose is nurtured, not slaughtered. #23 Linking People’s Dreams with Technology’s Promise We must help ensure that a win-win model can be developed to balance national interests with commercial interests to ensure that technology’s promise be linked to the fulfillment of people’s dreams. #24 Wireless Internet: Wireless Technology. Apps. Spectrum Costs. In this region, we have a very real, pragmatic opportunity to do this linking:
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