As the name implies, 2.5G technology was conceived as a stepping-stone from 2nd Generation (2G) i.e. GSM to 3rd Generation (3G) mobile. 3G is soon arriving in Japan but may happen elsewhere only in 2002-03. In all the talk about 3G, the importance of 2.5G technologies like General Packet Radio Service (GPRS) seems to have been underplayed. It offers significant data applications (examples include news headlines, sports scores and traffic updates) in a channel separate from voice calls, in an "always-on" mode, and is definitely way ahead of Wireless Access Protocol (WAP) in performance. Currently, WAP enabled GSM phones are being used to access the web and to send/receive data, but suffer from sluggish performance (slow and dropped connections), high airtime cost and limited content—making the experience not such a pleasant and fruitful one.

 Data Friendly Packet Switching

GPRS is based on "packet switching" (as against "circuit switching" used by GSM) and is technically capable of delivering 144-170 Kbps. However, the more realistic speeds could initially be 53.6–115 Kbps. The 2.5G’s "always-on" web-access capability, coupled with much faster data speeds, makes the wireless web experience far easier and more pleasant. However, users will have to buy new GPRS capable phones/devices to take advantage of that. It also has the ability to allow operators to charge/bill users based on the amount of data sent/received per month, as against the time spent online. As per a survey, a new 2.5G service could boost an operator’s Average Revenue Per User (ARPU) by 35 percent, depending on the services introduced. The likely moneymaking services include instant messaging, games and many business services. The whole business model is thus undergoing a change. For mobile networks, as voice becomes a commodity, data would be the differentiator to fight competition.

The Internet and mobile phone revolutions are fast converging into the world of Mobile Data. Various demand estimates of packet data point in that direction. Some of them are—Ovum: 407 million users in 2004, ARC: 803 million users in 2005, Mobile Lifestreams: 400 million users in 2004, EMC: 165 million users in 2004. It is reported that 5 billion SMS messages were sent in December.

Due to the high costs involved in 3G deployment – in the infrastructure as well as the new spectrum – the GSM operators are looking towards GPRS. GPRS offers the simple evolution path for a GSM network upgrading the same infrastructure and using the same spectrum. With BTSs being GPRS compatible, the key addition is GPRS Support Nodes (cost of upgrade being only marginal).

Thus, there are many benefits in moving to GPRS till 3G issues are resolved:

• GPRS shares the same radio resources as GSM (however, in congested cells with a high number of voice users, the GPRS throughput or data rate may be significantly less than expected).
• GPRS can deliver the SMS traffic more efficiently, thereby taking the load off the GSM network.
• GPRS makes use of existing GSM infrastructure; and being largely a software and architecture process is easy to implement. GPRS is able to use existing BTS locations with coverage similar to voice (upto 2 or 3 dB degradation in signal strength).
• It will provide vital experience in delivering/billing data, a skill required to go to 3G. However, the first generation GPRS may not support Mobile Terminated GPRS. If the service provider charges for content delivery, one has to address the issue of unauthorized content such as advertisements or junk e-mail.

 As a wireless solution for the Internet, 2.5G is thus expected to be far simpler, less costly to implement, and a more satisfying experience for the user.

Some of the Indian GSM operators are almost concurrent with those elsewhere (like in Europe and Asia-Pacific) in announcing the implementation of GPRS.  

After WAP’s lack-luster performance, 2.5G may act like testing or preparation ground for 3G. For instance, the number of WAP users in Delhi is believed to be less than ten thousand, out of a total cellular subscriber base of 5.5 lakhs. However, against i-mode’s super success in Japan, this is difficult to comprehend. Non-availability of WAP handsets is attributed as a key reason but the WAP experience in already congested networks is not a very happy one. GPRS will have to address these issues in advance.

The WAP experience has shown that new products are not easy to launch and can take much longer than expected. Just like GSM, GPRS requires full agreement on the standards (Release 29/Release 31) as well as inter-operability & compatibility of GPRS infrastructure and devices.

Another thing to learn from the WAP experience is not to over-hype the customer expectation. It is critical to tailor the marketing messages to the product capability. As GPRS cannot replicate the desktop Internet experience, expectations have to be realistic. This brings in the need to educate/prepare the customer in advance. Ultimately, the delivery can be better than the promise.

Besides differences in applications, positioning, pricing and market segmentation, GPRS requires different skills compared to GSM’s voice networks. GPRS provides IP delivery as the Internet drives the services used over GPRS. It therefore requires new technical expertise in IP in addition to GSM. The IP security subject is vastly different and the IP experience is in great demand. 

GSM taught us that quality and security are two prime customer considerations and GPRS will not be any different. Customers will expect from GPRS, a performance quality just like their current Internet-experience on other devices like desktops. Market success requires not only simple, easy to use applications but also end-to-end security. Though GSM is secure, the Internet is not! These issues need to be addressed also.

Partnerships with Content/Application Providers are becoming the key to success in the market place. We can learn a lot from "i-mode" in moving towards mutually beneficial partnerships with content providers, as operators cannot afford anymore to "go it alone." Need for personalized content is becoming increasingly critical.

GPRS has been in planning for a long time and the delay is mainly attributed to non-availability of GPRS compatible handsets. Reasons cited are related to performance and stability. Various other customer needs to be met include screen size and color resolution, voice/PDA evolution, speed, battery life, etc. The complexity is likely to make them expensive. Though some models have appeared now, mass delivery of handsets is expected in the fourth quarter 2001 (3G models are expected to arrive a year later).

Ultimately, 3G UMTS is planned as a natural evolution path for GSM operators. Most of the core network elements of GSM and GPRS are likely to be used for the UMTS network, with core network components like SGSNs and MSCs being upgraded to 3G capabilities. The databases (HLR) and services/features servers will also be updated for new 3G subscribers and services.

3G/UMTS’s unique Virtual Home Environment (VHE) is expected to allow the multi-system user to experience a common look and feel interface and a common service execution in all the visited networks. These services will be personalized for the user, based on the user’s needs. For instance: share prices, home shopping and travel information, personal banking, video and audio applications, call control and management and dynamic preferred services tariff selection.

The key to success would be innovative marketing of data/Internet services on mobile. But going by the Japanese experience, that should not be difficult. Some believe that 2.5G may even delay 3G’s arrival. However, 3G will ultimately prevail because it offers data connection speeds up to 10 times faster than 2.5G, permitting zippy services such as wireless videophones and digital music players.