Electronic Bulletin / Number 15 - September, 2005

Versión Español

Service development for mobile telephony 2.5 G and 3G

Second-generation mobile services (2G)

Mobile services are the communication capacities that operators make available to customers (subscribers). These capacities are completely defined by protocols and standardized functions (at least in how they are used).

Services can be divided as follows:

  • Basic services, which have their own entities (they can be delivered alone).

  • Supplementary services, which require a basic service to provide the additional service to the customer.

The International Telecommunication Union (ITU), in turn, classifies services as follows:

  • Carrier services, which provide the capacity to transmit information; nevertheless, they cannot achieve end-to-end communication by themselves because they are independent of the content of the information that is carried. An example of a carrier service is the access to data transmission by modem.

  • Teleservices, or telecommunication services, which provide communication capacity between subscribers, since they incorporate terminal functions that analyze information at the ends. An example of teleservice is telephony.

The table shows basic services that are typically provided in second generation mobile networks:

Group of basic services





Emergency call


Short message service (SMS)

Point to point mobile originated

Point to point  mobile terminated

Cell dissemination




Automatic fax


Asynchronous transmission of data via circuit

(Transmission rate varies depending on the technology)

Carrier service

Access to data network access devices (PAD)

(Transmission rate varies depending on the technology)

Carrier service

Voice services for closed subscriber groups



2G Competition

The figure below shows the general competition triangle in technology, highlighting the three aspects differentiating services for the subscriber: innovation, service excellence, and prices. 2G operators have competed among each other and have excelled in each of the aspects through the following factors:

Figure 1. Triangle of competition in technology services

  • Leader in prices: More economical plans, plans for weekends and friends, flat rate plans, prepayment accessible to all, promotional deals, lower rates by use, service subsidies, etc.

  • Leader in service quality: Better and wider coverage, personalized customer service, greater number of service centers, easier and more efficient management of prepaying customers (automatic recharging), offering additional services to business, among others.

  • Leader in technical innovation: Last-generation mobiles, early introduction of new network functionalities, which mean new services for subscribers, etc.


Typically, in every country, operators try to become leaders in one of the above-mentioned areas, whereas the dominant operator is leader in at least two of them. It is important to underscore that the operator’s objective is to become a leader in at least one of the three areas, or at least to be very close to being a leader, because these indicators measure the degree of the operator’s qualitative competitiveness compared to its competitors.

Note that the triangle of competence applies to perfect or nearly perfect markets.  In mobile telephony, for a market to be perfect, the following minimal conditions must be met:  three or more operators competing under equal conditions.  This condition is not met in all Latin American countries.  In some, monopolies or duopolies remain, and in others, one operator may dominate as regards investment resources.  Such landscapes completely alter the triangle of competence to reflect landscapes where competition does not exist.


Evolution from 2G to 2.5G: Data services on mobile networks

The evolution of technology that has led to various generations of mobile networks has been driven principally by the following factors:

Meeting the new needs of users: People who travel increasingly across international borders; “electronic” information is becoming a form of communication all around the world; changes in lifestyle are making people “more mobile”; free time is becoming mobile time; global competitiveness requires new skills and ways of conducting business; and furthermore there is rapid growth of mobile devices and “portable information.”

2G has met subscribers’ expectations for telephone communications and has partially met their aspirations for messaging (SMS). Nevertheless, 2G did not meet the expectations of users regarding connectivity to networks and data applications, as well as their impossibility of managing multimedia.

Generating additional sources of income for operators (increase average revenue per user—ARPU): Through 2G services, it was possible to attract new subscribers and raise their share to high levels (in European countries, the share is over 60% and in many of them it is about 75%). For operators, these figures account for a large part of possible total capacity, and because of this, the way to secure further income should be from the rise in use by current subscribers. So that this can occur, new “value-added” services used by subscribers should be incorporated.

Since the first mobile networks, focusing on offering telephony services, but with very limited capacities to develop and install data services, networks have been endowed with new functionalities, which is expected to culminate with the emergence of 3G networks.

Over the past decade, the world of telecommunications has experienced two unprecedented phenomena. On the one hand, the success of mobile telephony; on the other, the impact supposedly exerted by Internet and its applications on information systems, which is undoubtedly contributing to changing the habits and customs of current society and forcing the telecommunication market to transform its traditional models and concepts.

This has become apparent in phenomena such as the boom of message services among European adolescents and the continuous emergence of services based on data network access. These realities are evidence of the boom and acceptance of this mode of communication as a starting point, but also highlight unmet expectations and needs. Subscribers are calling for personalized mobile communication and multimedia services.

Although mobile telephony represents a milestone in the evolution of communication services, the phenomenon of Internet has become a genuine socioeconomic revolution, leading to a new model for business in almost all sectors of society. The conception and provision of Internet services have gone beyond that first phase confined to a minority market to which connectivity facilities and basic applications were offered to work on the network through access and service providers, to become a service that is widely available and used for users of the so-called global information infrastructure. Today, the mobile terminal has become an indispensable tool for voice communication between users, while protocols, mechanisms and applications of the TCP/IP architecture have supplanted the other models and become the baseline technology of the communication networks of the 21st century.

To understand the evolution and impact of mobile data technologies in services, one must understand the main features and constraints of data services offered on 2G mobile networks based on circuit switching, the capacities and advantages stemming from the introduction of data services, and their role as the first approach to 3G services.


Alberto Montilla Bravo

Additional Information: This article is part of the material prepared by the tutor of the distance learning course: "Service development for mobile telephony 2.5 G and 3G", that will be provided by the Node of the Center of Excellence of the International Telecommunication Union, CONATEL Venezuela. This course will take place from September 19 to October 21, 2005. OAS/CITEL and the Center of Excellence of the ITU have provided 18 fellowships to participate in this course.


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