UK and Chinas 3G Technology Development - Research Paper Example

UK and China’s 3G Technology Development: An environmental analysis Abstract Purpose – The purpose of this paper is to discuss and analyze the level of 3G technology development in the UK and China. In order to do this, the proponent included the environmental analysis of 3G technology development in the UK and China which includes analysis on political, environmental, social, technological, legal and environmental aspects. Through this analysis, it is now easy to understand some factors affecting the successful implementation of 3G technology development for China. In the case of the UK, the analysis can help gain more understanding on the level of strategic level adapted by the UK. Design/methodology/approach – This paper tries to find different related literature in order to come up with information that can readily be used in the analysis. All of the information gathered in this paper can be considered of great value considering that the general analysis focused on it. Findings – The proponent finds out that the UK has entirely different approach of 3G technology development compared to China. The reason is that UK is ahead of the development while China will now just focus on the refinement of standard in the development of 3G technology. On the other hand, the greatest contributing factor in the 3G technology development between the UK and China can be clearly stated on their political, economical, social, technological, legal and environmental aspects. Originality/value – This paper is of great importance considering that communication nowadays is more than just a necessity. This paper can gauge understanding on the current level of technological development as supported by the government. Keywords: 3G, environmental analysis, technology, development, mobile technology Paper type: Research Paper Introduction Someone might recognize it fully that the present mobile phone is not just an ordinary telephone. Nevertheless, today’s mobile phones function as multi-media with camera, video, radio, TV and some computer functions which we believed before as impossible or simply we have not thought about. Today’s mobile phones have function of a handy dictionary and a map that can be used anytime, anywhere. If it has to be critically evaluated, the present mobile phones have become a portable media. The development of terminal technology, mobile communication network technology and application technology bring more futuristic improvements and actual escalation of capacity of mobile phones as media. Now, users will enjoy even more of their mobile phones considering the mobile communication function of 3G products which include more service products such as wireless music, mobile newspapers, television, videos and books. These services are now spreading fast and in other countries they have come to the peak from the start of development. However, there is only one important thing in all of these, the applications in the mobile phone are the most valuable trends of 3G products which have already been part of people’s lives in other countries and still will be part of their lives in some other countries in the future to come. Let us take a closer look now at the 3G Technology Development in UK and China. These two countries have actually different status quo as far as the development of 3G technology is concerned. UK is quite ahead of China since the latter still accepts more open exchanges of information along with the development of technology from other countries. More so, China is looking forward to a positive aid coming from the UK as far as the adaption and development of 3G technology is concerned. From his privilege speech, Xiadong (2009) exactly was sincere in saying that China is looking forward to a successful conference with the UK on Internet and 3G-product development. Through this, the Chinese government is looking forward to more exchanges and cooperation between China and the UK. On the other hand, because of its potential and huge market for telecommunication, China knew that global telecom players will never waste their time monitoring its stand on 3G standards (Cheung, 2005). This paper tries to discuss the level of 3G development in the UK and China. Part of this paper is to analyze the political, economical, social, technological, legal and environmental aspect of 3G development in the UK and China. It is also part of this paper to find out the level of government intervention on 3G technology development and what exactly contribute to its successful implementation in the UK. On the other hand, it is also of great concern to find out the factors that will effectively help in successful implementation of 3G technology development in China. 3G Overview 3G wireless technology is a global communication technology that makes possible packet-based transmission of digitized voice, data and video. The 3G umbrella consists of a range of competing wireless technologies such as Code Division Multiple Access (CDMA) 2000, Universal Mobile Telecommunications Service (UMTS) and wideband CDMA (Jones, 2001). It cannot be denied that there was a certain thing called global success for second generation global system for mobile communications (GSM) systems. Then the world turned its focus to the third generation mobile systems (3G). This is to simply say that another new radio spectrum was given for these new networks including the activity of licensing the spectrum. It can be noted that licenses were awarded in many ways. Not only that, technologists were able to unite in specifying the standards for 3G. Harmer and Friel (2001) were able to describe the drivers for 3G and the commercial model that exists. Not only that, they were able to describe the benefits of 3G technology and the kind it can provide for business. They were able to identify consumer products. It seems very important in 3G development are the component-based approach to application and the product development itself. In addition, Harmer and Friel (2001) were able to describe about mobile terminals, billing and payment and customer care as very essential to overall customer experience. The shortage of frequency may undermine 3G implementation (Jones, 2001). The fixed network Internet access has led to global connectivity. E-mail communication becomes a strong driver. Internet and mobile communication have grown separately. Thus, 3G challenge is to bring the best features of mobile communications and the Internet together. Different markets may evolve at different rates. Europe has medium-level fixed Internet penetration but leads the USA with high mobile communication based on the one-standard GSM (Harmer and Friel, 2001). It is of interest to know the basics on how to use 3G. Basically, the users need the following (Jones, 2001): 1. A mobile phone or terminal that supports 3G. 2. A subscription to a mobile telephone network that supports 3G. 3. Knowledge of how to send and receive information using mobile phone which includes software and hardware configuration. The third item creates specific customer requirements as follows: 1. A destination to send or receive information. 2. People need to look at their mobile phones in as much as they used their ears. 3. Data uses of 3G is very important and it is different from traditional voice business. 3G Overview in China It is clear that 3G is still new in China. Now the question would be centered on how China will develop this new technology. As simply stated by Xiadong (2009) on his privilege speech, China is going to learn from the experiences of other countries in 3G development. This means that China will go along with the trend of information technology in the future. Xiadong (2009) clearly explained that not only China is adapting 3G technology at present; he believes that many other countries are adapting it too. In this regard, he believes that communication is a key to fast and accurate development of this technology. He encouraged communication from different countries is a must because through it, information will be exchanged, processed and transformed into something more useful for the development. From an article, China is to go for 3G Technology Park particularly in Chongqing (ChinaTechNews.com, 2009). Along with this project, there are six sectors that need to be developed: setting up the first mobile phone testing and authorization center in China’s western part; design and development of TD-SCDMA chips; TD-SCDMA terminals manufacturing; systems-related equipment manufacturing; software and value-added services application; and electronic equipments and product market. As stated on the speech of Xiadong (2009), what are needed from 2G to 3G upgrade are construction of 3G network chain which is a new telecommunication industrial chain, manufacturing of terminal equipment, formation of operation service and information service. 3G Overview in the UK Many of EU states were able to commit to the introduction of 3G under UMTS. This further means that European interest was in making UMTS backward compatible with existing GSM base (Gruber, 2005) The first commercial launch of 3G in the UK was undertaken during the second quarter of 2003. There were many problems encountered. The most encountered problem was on equipment especially on the limited availability of 3G handsets. This caused the delay in introducing 3G services. On the other hand, the existing markets were not actually very keen at first in promoting 3G services due to the reason that they invested in upgrading their 2G networks for multi-media messaging which was supposed to be done by 3G (Gruber, 2005). However, latest development on the said technology continued to exist. This was able to give much more refined output in the end. At present, UK is now heading to the development of much higher advance technology other than 3G. There are some reports given that the UK is now trying to move forward to 4G development. Whether the report holds some truth or not, one thing that is clear is that UK is one of the leading countries always willing to go for change and much higher advancements through product research and development that eventually will lead to innovation. Political Aspect Another thing that is important in successful implementation of 3G technology involves government policies and other related concerns. This is true. In fact, the UK started to make out the whole plan followed by creating policies and other related aspects of 3G technology development. The bottom line of this, it concerns about international trade and policies. The UK is very specific on this issue. In fact, this is the reason why it was very careful in giving licenses to holders in as much as it sticks to its policy. The Department for Business Innovation and Skills (2010) stated that the aim of UK Trade Policy Unit (TPU) is global success and security because of open and fair markets. The TPU is the department in charge of bringing together trade and development policy experts from BIS and the Department for International Development (DFID). Considering that protectionism is a current issue surrounding international trade, openness remains to be a significant challenge along the way. The role of the UK business is to help in alleviating the economic crisis by keeping the market open in ensuring that trade will continue in terms of providing sustainable development and poverty reduction, all of which are consistent to longer-term trade strategy. The UK business is known for this. In fact, the same policy was applied when it opened its door to 3G technology development proposed by large international companies. Certainly, if one talks about UK business, one will eventually know that the business itself does not operate in isolated case. If one will base it in a long-term, the benefits are actually the results from openness which can be best achieved if all will be able to share in the benefits. As computed, open and fair markets results to 10 percentage point increase in trade openness which further results to 4% increase in per capita income. As reported, around 80% of poverty reduction was remarkable which was able to lift 500 people over the poverty line in the past 15 years (Department for Business Innovation and Skills, 2010). On the other hand, the decision power lies on the highest level of government in China. The relationship among government, mobile operators and manufacturer has long been an important issue for the success of 3G technology development in China. Due to the competition involved, the highest government in China is backing TD-SCDMA. However, other mobile operators are also interested to the other wireless technologies such as WCDMA and CDMA2000. Aside from the government, there are some influential forces backing up the other wireless technologies. This brings complicated issue considering that the Chinese government could not specifically determine who among of the mobile operators are supporting the government in its choice of mobile technology. This delays the event of moving forward to other related technological development. It is a reality that political forces can influence enough in the making of dominant design. This can be complicated, prediction is difficult and there are many variables to be considered at hand. As observed by Paul and Steinmueller (1996), some regulatory bodies of the government may develop interest in setting the standards for reasons. It is a fact that some government agency has the authority to regulate the industry’s firms. They have the perception that standardization activity’s result has strong important influence on national goals like protecting domestic employment or maintaining defense capabilities. As noted on the observation of Paul and Steinmueller (1996), the setting of standard is complex in actual practice. For instance, the process of regulation may involve problems to government agencies because of unequal distribution of information and obtaining of power. The next thing, it is a reality that government intervention can draw attention to justifiable vested interests. Paul and Steinmueller (1996) points out that the national governments have the capacity to create incentives in promoting and discouraging the adoption of compatible standards in telecommunications services. In this case, the incentives to promote standards only arise when compatibility standards will be able to contribute to user welfare even if not considering either positive or negligible effects on domestic producers. When the government sees to secure perceived national interest, most of the time, there is always a perceived sacrifice on common international standards or inter-operable compatibility standards. With this, it is also implied that employment in the home country is highlighted and activated. With regards to this, it is now important to determine if it is good to favor standards advantageous to domestic producers because of their local contribution to employment, national culture and other related considerations. Paul and Steinmueller (2006) in this context sees it that it is good to weigh consumer losses appropriately and treat producer gains in a more skeptical manner. However, Paul and Steinmueller (2006) proposed that in order to preserve domestic market position, the good thing is to use compatibility standards in order to achieve inter-connectivity instead of inter-operability. For one thing is sure, inter-connectivity sees to it that the two devices got connected through converter or bridge that will make them mutually compatible. This is implied that government policy in favor of inter-connectivity is having much more opportunities for domestic production. However, this action needs to be warned against the possibilities of retaliation and the most important, consumer welfare losses with regards to promotion of inferior standard. What seems to be the problem in successful implementation of 3G technology developments in China is the government’s ability to define its own standards that at some point if it is being missed out, the compatibility for the welfare of its people cannot be satisfied. Hence, delaying further the process of development. China is very open to innovation at present time since it is widely concerned on its economy and not only that, it is conscious to what is happening in the world of technological advancement and development. What seems to be more advantage of China is its ability to gather information and considering that other countries have had enough experiences on the 3G technology development, it would just be easy to source out information and makes use of them for more successful implementation. China is on the right tract. Considering that it does not need to focus deeply on more discoveries about 3G technology developments, its government’s center of focus must be towards setting the right standard that as much as possible, will benefit further its economy and its people. China after all has the capacity to select the best standard for its national and local market considering the large number of population it has and a wider economic potential for possible investments. One of the differences between the UK and China when they both started in the development of 3G technology is the amount of time needed to learn more about the development of the said technology. UK had undergone many times of trials and errors as well as adverse government interventions. However, in the case of China, one thing is clear that the country has to focus solely on setting the right standards. If one has to closely analyze this, China has the good chance to succeed even more. As significantly expressed in the discussion above, government intervention has a strong impact towards the success of 3G technology and development. However, one thing is clear; the intervention will only be successful provided that the dynamism to take the right standard is strong just like in the case of China. Economical Aspect If there is one thing that is most obvious about 3G technology development, this is in line with money matters and that is to gain on the business implied on the said technology development. The business related in communication is obviously one of the best ventures that moved ahead of time. In the UK, it is a fact that Telecom companies spent billions of pounds at the start of the decade to secure licenses needed to set up 3G services. However, there is a strong need to analyse further if application related to 3G technology development will sufficiently fund for instance its network development (Crandall and Alleman, 2002). This paid off due to the fact that the mobile phone operators and resellers in the UK have significant market share in the world (Haberberg and Rieple, 2008). It can be remembered that the Connect 3G/GPRS PC datacard of Vodafone was the first world’s biggest business in 3G technology development (Cronin, 2004). The technology was catering a corporate client which enables the PC users to use a high speed data while on the move while using the plug-in card. Initially, the 3G coverage of Vodafone extended to only 30% of the entire UK population but it was able to push until 50% at the later part in the year 2004. The case of Vodafone was a case of acquiring a 20-year UK 3G license which the spending runs almost £6bn. However, Bill Morrow insisted that it was money well spent. He said in an interview with BBC News Online during the launch of the 3G datacard in London, “We are confident we are going to recover that cost. We are now bringing revenue into the 3G network” (Cronin, 2004). The exact point in here is about creating a business, setting up everything and then taking into consideration how to exactly gain back the cost being invested. Considering that Vodafone invested that much in the UK, and considering that the company was able to sign a 20-year UK 3G license, then it is implied that a great opportunity for 3G technology development is very promising in the UK. This consideration is implied considering that the UK is one of the world’s leading users of new innovative technology. Economic wise, there is a clear great opportunity for investors in the UK. On April 2000 auction in the UK, its government was able to raise about $35 billion. The main issue in China’s 3G technology development is to promote its economic and social development through giving an acceptable standard for its information technology (Xiadong, 2009). This is very evident in every move that China is constantly doing. In fact, China will never invest something that is far from getting something in return. If there is another name to be given to Telecommunications industry, it is fit to name it as “network economy” for which it consists consumers of computers, software programs, cellular phones, faxes and internet services. All of these have corresponding products with value. The more the products are used, the more its social value increases since more consumers are after of its usage and benefits. There is actually a model that helps one to understand the implication and dynamics of standard-setting on dominant technology. According to Faller and Saloner (1987), standardization is a coordination process which implies production of goods that are interchangeable or compatible. Speaking of the economics of information industry, David (2006) pointed out those standards in telecommunications systems have central role to ensure quality service. He added that standards in telecommunications systems do not only involve exchanges between service quality and variety but it will join together advanced telecom networks in a faultless web of interoperable technologies and services. The other way of saying this is that the interoperability is the highest priority of standards setting. Paul and Steinmueller (2006) expressed that in reality and in practice, there are reasons why such construction of highest priority standard setting can be difficult to achieve. He stated that there is such a thing called technical compatibility standards which does not flow fairly from the desired engineering practice, but reflect strategic behaviors on a full range. This clearly happened in the case of the UK upon its 3G technology development. Thus, this became part of the challenge while the said technology is still on its construction stage in the UK. There is a common agreement involved that the dominant design is usually not the technologically superior but it is the result of a complex connection between technological factors and user demands as well as political, social, and economic factors. It is a reality that every technological design is backed by different sponsors competing for the position of dominant design through a process where there is an involvement of economic, technological and socio-political factors. The right way of saying this is that technology does not work in isolation, things that are significant are coordination and compatibility with other products or systems and they are actually needed. In general, the more complicated the product, there will be more actors to align for a technological design, the implication is that the sponsoring role will become complicated as well. According to Tushman and Rosenkopf (1992), a system that is complex needs additional attention to many different interfaces and negotiation with each user and producer of complementary products making it evolved from simple technology to more complex one. This is indeed what happened to the 3G technology development in the UK. With competition, there are many players in the market who are dynamically involved. The best thing about this is that the more there is a strong competition; consumers get the most of benefits. Thus, as much as possible, the government needs to encourage fair and healthy competition for the people to benefit even more. Now China has entered the same trend. However, it is a bit different considering that the said government has chosen to support for instance one wireless technology so as to monopolize and take hold total control in the market. This is to ensure its own standard is followed for the benefit of its own economy in the long-run. This sounds a good strategy considering that China has a big potential market for investors. However, one thing China will miss in the long run, a healthy competition. What it can do to ensure quality and standard service is to constantly look into the current trend of the world. In this way, it minimizes the negative impact of a monopolized system of market for 3G technology. It was a different thing in the UK. The government encourages healthy competition and the more investors will try to get on its way in the UK, the better it is for its economy and its people, for a healthy competition is ensured to follow. What seems to be disadvantageous in this system is when the key players will conspire to monopolize the industry. China has learned this way. After all, it has been trough communism for a long period of time. Social Aspect It is implied, people are attracted to something new. The same principle applies to the development of 3G technology in the UK at first. However, it is also implied that not everyone is willing to accept change. Some people would love to remain to what they are used to have or do. This became a big challenge in the UK considering that its people have the freedom to choose what they want. It is again a different thing in China. People there do not have much choice as far as they want to have so. The reason is that its government dominates the decision making process. In this regard, there would be fast implementation of 3G technology development as far as the social situation in China is concerned. What the government must do is to convince its people so as to patronize unanimously whatever it has introduced in the market. Technological Aspect It cannot be denied that part of UK’s present development was its ability to apply innovation and on the way, it has created some tools and part of it was its adaptation of 3G technology development. The process was never so easy at start. The technology for such type of adaptation seemed to be much more sophisticated that investing on it may not be more rewarding. However, as higher technology implies innovation, the only thing a government must do is to help promote for its people the importance of adapting a higher level of technology. At some point, this is very evident on the status of China at present. China’s government is very optimistic about adaptation of the new technology such as 3G technology development considering that its leaders believe that adapting to a much a higher technology at present implies efficiency and in the end, much more economic opportunities and advantages for its country. Not only that, wireless technology and the internet played important role in China’s telecommunications industries (Wong and Wong, 2003). This simply suggests that as how the UK started everything, the same thing has been taking place at the moment in China. What is the good thing about China’s attempt at present to develop 3G technology is that it has more references at present on how the technology works in totality. In this regard, China will be less susceptible to trial and error thing. This further implies that its capacity to adapt the 3G technology while still it is on the process of developing it, China’s attempt to 3G technology developments has a greater chance of becoming a success. Considering that its government is very enthusiastic about the development of 3G technology, China may not be far from becoming a country with greater opportunity for competent global communication system. It is clear from the start that technology at present condition is a basic measure of a country’s economic status and financial opportunity. The UK is one of the most advanced countries when it comes to adaption of new and innovative technology. Thus, China is relying on the country’s capacity to implement successful and strategic development of certain technology. In fact, the development of 3G technology as mentioned earlier was actually the thing China is confident to entrust to UK when it comes to support through exchange of information and other related concerns. Legal Aspect It involves legal aspects as far as on how to income with 3G technology development is concerned. Legal issues may not only protect the people, but as well as the government earnings as well. The UK is one of the countries that tried to open its door early for 3G technology development. In fact, as stated in Table 1, it was able to give a license offer for 3G technology development through Auction on April 2000 to five license holders. On the other hand, some national policies of China most especially its hesitation to adopt international mobile-communication standards may be potential barrier for mobile manufacturers in meeting global market demands (Silberglitt and Wong, 2009). This simply suggests that in order to come up with the right basis for implementation of the said technology, government’s legal mediation is needed. This is what China needs to understand at present condition. Part of its developing 3G technology, it has to ensure legalities for it to successfully implement programs that will eventually benefit its economy. After all, its main reason for involving into 3G technology development is to emphasize economic growth and universalizing the scope of communication for its people. This further means that China was so ambitious about interacting with the world to the extent that it made use of 3G technology as the fastest media that will eventually connect it to the world of more economic opportunity. Table 1. Worldwide 3G licenses (Jones, 2001) Countries License method License offer date Number of license holder Austria Auction November 2000 6 Belgium Auction March 2001 4 Finland Government selection March 1999 4 Germany Auction August 2000 6 Italy Auction and Government selection October 2000 5 Japan Government selection July 2000 3 Lichtenstein Government selection February 2000 1 Netherlands Government selection July 2000 5 New Zealand Auction January 2001 4 Norway Government selection November 2000 4 Portugal Government selection December 2000 4 Spain Government selection January 2000 4 Sweden Government selection December 2000 4 Switzerland Auction November 2000 4 Thailand Government selection January 2000 2 UK Auction April 2000 5 Environmental Aspect Geographically speaking, both China and the UK have potential market for 3G technology development. This had already been proven in the UK. The situation remains to be proven in China. Considering its population and as the number one supplier of raw materials and cheap labor in the world, it is not impossible to see the success of 3G technology development in China. Geographical location has long been a key indicator of market potential and other related aspects. This is to say that what makes China a good geographical location for 3G technology development are its population and the popularity it has started by attempting to dominate the world’s economy. Concluding Remarks This paper tries to explain and look at some details of 3G technology development in the UK and China. The result of this research suggests that there are various factors affecting the successful 3G technology development in the UK and China. The UK is more advanced than China in 3G technology development. In this regard, it is good to consider the development of UK as benchmark of China in its 3G technology development. However, China seems to have another direction. Considering that it is behind of the development of 3G technology, its main focus at present is to create certain government standard of which the bottom line is to help the government’s economy and universalizing the level of communication among its people. This paper tries to explain the environmental analysis of 3G technology development of which the analysis includes political, economical, social, technological, legal and environmental aspects. All of these seem to contribute to successful 3G technology development. All aspects were found out significant in the achievement of other aspect. Through this analysis, it was found out that China was formulating modern model of adapting 3G technology development. References ChinaTechNews.com (2009) ‘Chonging Home to First 3G Technology Park in China’. [Online] Available at: http://www.chinatechnews.com/2009/03/18/9280-chongqing-home-to-first-3g-technology-park-in-china (Accessed: 24 March 2010). Cheung, C. 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[Online] Available at: http://www.china.org.cn/business/2009-07/22/content_18183326.htm (Accessed: 23 March 2010). Read More