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In many respects, the Global System for Mobile Communications (GSM) looks well poised to become established as the worldwide digital cellular standard by the end of the decade. The mobile communications market is becoming so competitive, however, that it could easily prove a graveyard for even the most promising technology. A number of competing technologies, such as CDMA, DECT and PCN, are challenging the ascendancy of GSM, and threatening to take valuable market share. Given the cost and complexity of GSM, embarking on the widespread launch of a service, based on an entirely new technology represents a considerable risk.
In a European market which displays a wide diversity of cellular penetration levels, different aspects of the new service will weigh more heavily in different countries, challenging the marketing skills of the new operators. Their competitive advantage could rest on the differentiating factors between existing and emerging services, or on the need to expand present capacity to meet growing customer demand. For GSM, success will depend heavily on the features that distinguish it from existing analogue systems, including international roaming, improved security over analogue systems, value-added services, and combined voice and data capability. Also crucial will be an attractive tariffing package, that provides a real inducement to previously non-mobile users.
As GSM services are ramping up, mobile markets are entering a period of particularly frenzied competitive activity. In the more developed markets, analogue cellular operators have responded to signs of slower growth with a range of attractive tariffing initiatives, in effort to extend their customer base and encourage use of mobile services. Telecom Finland's NMT Privat service is one example, offering a reduced annual charge as well as peak rate reductions for private customers. In the UK, both Vodafone and Cellnet offer low-use packages. Vodafone has introduced its LowCall service, with substantial connection, access and off peak discounts, but double the standard charge for peak rate calls. Cellnet has signed up 150,000 subscribers for its equivalent service, Lifetime, in its first seven months. At the other end of the scale, Cellnet plan. In the UK alone, with the arrival of GSM, and the launch of Mercury's one2one PCN service, customers will be faced with a bewildering choice of eight competing mobile services, both analogue and...