Demand for second-generation (2G) and 2.5G services are expected to stay firm until next year or so, while new third-generation (3G) players are not expected to gain much grounds in the local telecommunications market in the short term.

As more developed countries in Asia are in the process of moving on to the fourth-generation (4G), Malaysia can learn from their success in deploying 3G services.

Basically, the availability of 3G services must be without glitches and network coverage must be large; 3G phone prices should be lowered, and mobile content must be attractive enough to create critical mass.

Players could also provide affordable and transparent 3G pricing plans such as flat-rate subscription rates; service bundling of voice minutes, messaging and video; as well as applying an operator push strategy.

The push technology should be sufficiently evolved to spur the demand for mobile gaming, on-the-move advertising, mobile TV, etc. This is because music and games downloads, as well as Internet surfing are expected to be the main drivers for the telcos 3G data revenue growth. And as the market becomes saturated and voice rates become cheaper, telcos prefer not to be too dependent on voice services.

The current 3G players will react to new competition by trying to convert as many 2G and 2.5G subscribers as possible onto the 3G platform, which would provide them with a headstart against the new players, and establish customer loyalty in the long run.

To the existing 3G licence operators, this new competition could bring pros and cons to a market that is price-sensitive, yet yearning for high-quality network services and new exciting content.

Meanwhile, the high-speed downlink packet access (HSDPA) technology – also called 3.5G – is a packet-based data service with data transmission speeds of up to 10 Megabits per second (Mbps), with a possibility of supporting even higher data transmission rates up to 20mbps.

The 3.5G services currently enable data transfer speeds of up to one to 2Mbps, which is up to five times faster than existing 3G speeds.

HSDPA arrived sooner than expected in Malaysia as a result of the strong competition within the local mobile phone segment. This technology also serves as a form of competition to WiMax in terms of mobility.