Q&A: GSM

What is GSM?

What are the advantages of GSM?

Where is GSM available?

What is the history of GSM?

Why have some TDMA operators transitioned to GSM?

Why have some CDMA operators transitioned to GSM?

How are GSM operators migrating to GSM?

What is a SIM card?

What companies manufacture GSM handsets and network infrastructure?

What is GSM?

Global System for Mobile communications (GSM) is by far the most widely used wireless technology in the world today. GSM is a second-generation (2G) wireless technology that provides high-quality voice and circuit-switched data services in a wide variety of spectrum bands, including 450, 800, 850, 900, 1800 and 1900 MHz. GSM pioneered many of the world's most popular data services, such as Short Message Service (SMS) and Multimedia Message Service (MMS).

GSM is a digital or “PCS” technology. The phrase “GSM family of technologies” is often used as a catch-all term to refer to GPRS, EDGE and UMTS/HSPA, which provide a smooth, cost-effective evolution to third generation (3G). GSM is the most widely used wireless technology in the Americas and worldwide, with more than 86% of the global wireless market. As of 3Q 2007, more than 2.7 billion people worldwide -- approximately 41% of the world's population -- use GSM.

GSM allows multiple users to share a single radio channel through a technique called time division multiplexing (TDM), where a channel is divided into six time slots. Each caller is assigned a specific time slot for transmission, which allows multiple callers to share a single channel simultaneously without interfering with one another. This design makes efficient use of spectrum and provides seven times more capacity than analog or “AMPS”, which is a first-generation (1G) technology. GSM also uses a technique called “frequency hopping,” which minimizes interference from outside sources and makes eavesdropping virtually impossible.

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What are the advantages of GSM?

GSM's advantages can be divided into two main categories: user benefits and operator benefits.

Key user benefits include:

• Clear voice quality, which helps make GSM a viable alternative to wireline telephony for consumers and businesses. Although data is an increasingly popular wireless application, voice continues to be the primary reason why people use wireless technology.

• International roaming, with service available in more than 220 countries as of 3Q 2007, the widest footprint of any mobile wireless technology. As a result, users enjoy the convenience of being reachable with their GSM device and phone number when traveling in these countries and territories, as well as the ability to access messaging and other advanced services that they use in their home market. Partnerships within the GSM community help to keep users' roaming charges affordable, and allow for any roaming charges to be automatically billed to their accounts back in their home market.

• Spectral flexibility, with user devices available for the 450, 850, 900, 1800 and 1900 MHz bands, the widest variety of any wireless technology. Tri- and quad-band GSM phones are common, reducing the chances that users will ever travel to an area without at least one GSM network to which they can connect.

• Tight security, including inherent protection from eavesdropping and hacking. This helps make GSM voice and data an attractive alternative to analog cellular and Wi-Fi in the eyes of users, particularly enterprises.

• Data support, including SMS, Web browsing and circuit-switched data.

• Subscriber Identity Module (SIM) cards, which allow customers to buy a new or additional phone, or a GSM PC Card modem, and instantly transfer their settings, preferences and contacts to the other device.

• Product selection. GSM's 86% worldwide market share makes it an attractive choice for manufacturers of handsets and for application developers. As a result, GSM customers enjoy the largest selection of handsets, PC card modems and other devices, as well as innovative voice and data services. GSM's market share also translates into large volumes of network infrastructure and user devices, which drive down costs.

• Research and development is heavily supported for the entire GSM family of technologies due to the scope and scale of two billion customers worldwide.

Key operator benefits include:

• Economies of scale: GSM is the most widely used wireless technology in the Americas and worldwide. It is available in more than 220 countries and territories worldwide, as of 3Q 2007, according to the GSM Association. More than 2.7 billion people worldwide, approximately 41% of the world's population, use GSM. As of 3Q 2007, GSM has captured more than 86% of the global wireless market. This market size requires high volumes of handsets and infrastructure, which attract vendors and application developers while reducing costs. With this lower overhead, GSM operators are better able to price their services competitively yet profitably.

• Spectral flexibility, with network infrastructure available for the 450, 850, 900, 1800 and 1900 MHz bands. This is the widest variety of any wireless technology. As a result, operators have more deployment options. For example, an operator that wants to cover a sparsely populated rural area might choose 450 MHz GSM infrastructure because signals travel farther at lower frequencies, so fewer base stations are needed. Those savings can be passed on to customers and investors.

• Spectral efficiency, up to seven times more capacity than analog/AMPS. GSM operators also can upgrade to EDGE, which allows the use of advance voice-coding technologies that can triple voice capacity in the same amount of spectrum.

• International roaming, with service available in more than 220 countries, as of 3Q 2007. That's the most of any wireless technology by a wide margin. Roaming is particularly important for operators for two reasons. First, inbound roaming can contribute a substantial portion of a GSM operator's total revenue, especially for rural and regional operators. Second, roaming support helps operators attract business users, who want to be accessible with their current mobile device and phone number while traveling throughout the Americas and the rest of the world.

• Device selection, including handsets, modems and telemetry products. GSM's 86% global market share drives large device volumes, which translate into a wide selection at a variety of features and prices. Affordability is one of the reasons why GSM is a popular choice for providing voice and data services in developing countries and underserved markets.

• Tight standardization, which helps ensure interoperability between infrastructure and devices from multiple manufacturers. That provides operators with multiple equipment selection options.

• Future-proof evolutionary path: GSM is the first step in a smooth, flexible, cost-effective migration to 3G. Each subsequent step leverages the previous step, and provides backward compatibility, ensuring that investments and customers are maintained during the migration. The standards behind GSM's upgradeability and interoperability are coordinated and supported by key international organizations such as the Third Generation Partnership Project (3GPP). The evolutionary steps to 3G after GSM and GPRS include EDGE, UMTS and HSPA.

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Where is GSM available?

A better question might be, “Where is GSM not available?” GSM services are available in more than 220 countries, as of 3Q 2007.

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What is the history of GSM?

In 1982, a consortium of European countries created the Group Spéciale Mobile (GSM) to develop a cellular technology that would provide seamless international roaming and support for advanced services not available on analog networks. The European Telecommunications Standards Institute (ETSI) took over the project in 1989 and finalized the first set of technical specifications.

The first GSM network was launched in 1991, followed by several more the following year. As countries outside Europe adopted the technology, it became clear that GSM would be a global rather than European technology, so the GSM acronym was changed to stand for “Global System for Mobile communications”.

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Why have some TDMA operators transitioned to GSM?

The primary reason why TDMA operators have migrated to GSM is for the evolution to 3G offered by the GSM family of technologies. However, there are also many benefits in choosing GSM as a 2G technology.

By transitioning to GSM, TDMA operators and their customers enjoy access to worldwide roaming – more than 220 countries, as of 3Q 2007 – and a much larger selection of infrastructure and handsets. GSM also provides TDMA operators with a smooth, cost-effective migration path to third generation (3G).

GSM's roaming capabilities and global footprint are particularly attractive to TDMA operators because worldwide roaming revenue is a significant and growing revenue source. In 2006, there were 303 million roamers worldwide, and they drove 15% of all wireless revenue, according to Informa Telecoms & Media, an independent analyst firm. By 2011, the number of roamers is expected to hit 566 million and drive 28% of revenue. By migrating to GSM, TDMA operators can capitalize on this opportunity.

Over the past several years, more than 50 TDMA operators across the Americas have migrated to GSM. Examples in North America include Cingular Wireless/AT&T Wireless (U.S.) and Rogers Wireless (Canada), and in the Caribbean, Cable & Wireless. Many operators throughout Latin America have made the TDMA to GSM migration. Examples include most of the America Móvil properties, such as Telcel in Mexico, and many of the Telefonica properties, such as Movistar.

TDMA-to-GSM migrations are one of the reasons why GSM is the fastest-growing wireless technology in the Americas, increasing from 6% of the regional market in 2000 to more than 63% by year end 2007, according to Informa Telecoms & Media, an independent analyst firm. By the end of 2010, GSM will comprise 75% of subscriptions in the Western Hemisphere. For additional user and operator benefits, see “What are the advantages of GSM?”

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Why have some CDMA operators transitioned to GSM?

By transitioning to GSM, CDMA operators and their customers enjoy access to international roaming in more than 220 countries, as of 3Q 2007. That's significantly more than CDMA2000 1X, which was available in 69 countries in 3Q 2007, according to Informa Telecoms & Media, an independent analyst firm.

GSM's roaming capabilities and global footprint are particularly attractive to CDMA operators because worldwide roaming revenue is a significant and growing revenue source. In 2006, there were 303 million roamers worldwide, according to Informa Telecoms and Media, an independent analyst firm. By 2011, the number of roamers is expected to hit 566 million. By migrating to GSM, CDMA operators are better positioned to capitalize on this opportunity.

Another benefit is a larger selection of infrastructure and user devices. This selection is a byproduct of GSM's global market share: 86% of the worldwide wireless market, as of 3Q 2007, according to the GSM Association. This market size requires high volumes of handsets and infrastructure, which attract vendors and application developers while reducing costs. With GSM's lower overhead, former CDMA operators are better able to price their services competitively yet profitably.

Since 2003, 12 CDMA operators across the Americas have migrated to GSM, committed to this migration or have deployed new GSM networks alongside their existing CDMA networks. In Latin America, examples include America Móvil (Argentina and Mexico) and Vivo (Brazil). In fact, GSM has quickly become the dominant wireless technology across the Americas, and is the top choice of Latin American operators. Market share of CDMA has declined in Latin America and the Caribbean from 21% as of 3Q 2006 to 16% in 3Q 2007 as many operators and their customers are choosing GSM technologies.

CDMA-to-GSM migrations are one of the reasons why GSM is the fastest-growing wireless technology in the Americas, increasing from 6% of the market in the Western Hemisphere in 2000 to more than 62% by 3Q 2007, according to Informa Telecoms & Media, an independent analyst firm. For additional user and operator benefits, see “What are the advantages of GSM?”

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How are GSM operators migrating to 3G?

GSM provides the foundation for 3G services and is part of a family of technologies that includes GPRS, EDGE and UMTS/HSPA. Each migration step leverages the previous step and provides backward compatibility, ensuring that investments and customers are maintained during the migration, which can take several years or more. The standards behind GSM's upgradeability and interoperability are coordinated and supported by key international working groups such as the 3GPP.

The first step in a GSM operator's migration to 3G begins with the deployment of GPRS, an IP-based technology that provides packet data at rates of up to 115 kbps. After GPRS, an operator may choose to deploy EDGE and then UMTS/HSDPA or go directly from GPRS to UMTS/HSDPA, depending on its business plan and market conditions. Whatever the choice, the GSM family of technologies provides a smooth, flexible and cost-effective migration path to 3G.

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What is a SIM card?

The Subscriber Identity Module (SIM) card is a wafer-thin, thumbnail-size microchip used by all GSM devices, including phones and GSM/GPRS PC card modems. Like a credit card or smart card, the SIM securely stores information about the user's account and subscription services, and it can be used to support services such as wireless e-commerce, or “m-commerce.”

The SIM is removable, allowing customers to switch GSM devices when buying a new phone or adding a PC card – without the hassle of configuring the new device or the loss of personalized subscription services, such as messaging. The SIM card makes it easier for users to change GSM operators and keep the same phone. This flexibility makes GSM-based data networks, such as GPRS and UMTS/HSDPA, attractive for a wide variety of data applications.

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What companies manufacture GSM handsets and network infrastructure?

Hundreds of models of GSM phones, PDAs and GSM/GPRS modems are currently available from major manufacturers, including HP, Motorola, Nokia, Siemens, Sony Ericsson, and Research In Motion (Blackberry). GSM devices are available in a wide variety of price points and feature sets, including high-end models with color screens and built-in digital cameras. Additionally, because GSM is an open standard, any vendor can manufacture GSM equipment. This freedom is one of the reasons why GSM operators and customers enjoy such a broad selection of equipment and vendors.

GSM network infrastructure is available from dozens of vendors, including Alcatel, Ericsson, Nokia Siemens, Nortel Networks and Motorola.

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