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Chapter 21: The Contribution of
the GSM Association to the
Building of GSM and UMTS
Section 1: Cooperation of the Operators from the
Agreement of the GSM MoU to the Opening of
Service in 1991/1992
Renzo Failli
1
21.1.1 The Main Objectives of the MoU Group in the First Period of its
Activity and its Organization
The MoU group had its first meeting on 14 October 1987, shortly after the signature of the
MoU by the mobile operators of 13 European Countries: Federal Republic of Germany
(FRG), France, Belgium, Denmark, Ireland, Finland, Italy, Norway, Netherlands, Portugal,
Sweden, UK and Spain.
The numbers of operators was 14 since at that time a single mobile operator was active in
each country apart from the UK where two operators (Cellnet and Vodafone) were active.
In the following months the MoU was signed by the mobile operators of another three
countries: Luxemburg, Switzerland, Austria. In such a way Western Europe was substantially
represented (Greece and Turkey joined later).
The main objectives may be summarized as follows:
†
to give evidence to the manufacturing industry of the actual willingness of a large number
of European mobile operators to invest significantly in GSM networks in order that the
industry might dedicate sufficient resources to the development of the new technology;
†
to avoid that holders of potentially essential IPR for the GSM technology might create
problems for the economical development of the new system;
†
to define all technical, commercial and regulatory aspects necessary to allow a true Pan-
European service allowing each GSM client to roam in every country using the same GSM
terminal and keeping the possibility to originate and to receive calls to and from all other

fixed and mobile telephone terminals;
1
The views expressed in this section are those of the author and do not necessarily reflect the views of his affiliation
entity.
GSM and UMTS: The Creation of Global Mobile Communication
Edited by Friedhelm Hillebrand
Copyright q 2001 John Wiley & Sons Ltd
ISBNs: 0-470-84322-5 (Hardback); 0-470-845546 (Electronic)
†
to support the standardization work in GSM and to take decisions by majority voting in
cases where no unanimous decision could be reached in GSM;
†
to ensure the correct operation and interworking of network equipment of different manu-
factures and, above all, the compatibility of all GSM terminals with all networks;
†
to promote the GSM technology in countries outside Western Europe with the purpose of
both reducing network and terminal costs due to economy of scale, and to improve the
service by enlarging the roaming area.
In order to reach such objectives in the proper time, the MoU group immediately estab-
lished seven expert groups with the mandate to study and report on specific aspects, and asked
seven signatory countries to offer the support with a rapporteur:
P – group: Procurement (rapporteur from France: Ghillebaert)
†
harmonization of procurement policy;
†
IPR co-ordination;
†
configuration control (freeze technical configurations in order to allow the GSM network
to interwork each other: choice of GSM recommendations and their version to be used in
contracts).

BARG: Billing and accounting rapporteur group (rapporteur from UK: Maxwell)
†
administration of subscribers;
†
billing harmonization;
†
credit control;
†
fraud prevention measures;
†
accounting operations;
†
statistics;
†
definition of harmonized billing and accounting software requirements.
EREG: European roaming expert group (rapporteur from Italy: Failli, followed by Panaioli
and subsequently Eynard)
†
coordination of all technical and operational principles and plans for the support of
European roaming, including:
†
mobile numbering plans;
†
routing of terminated calls and of signaling messages;
†
technical implications of tariff principles on international interworking;
†
establishment of international signaling links;
†
interworking between PLMNs using different work functions, quality and availability of

service.
MP: Marketing and planning (rapporteur from Sweden: Tadne followed by Magnusson and
subsequently Zetterstro
¨
m)
†
coverage maps;
†
GSM name and logo;
†
coordination of awareness campaign and public relations;
†
commissioning of market survey;
†
identification of selling features to guide system developments.
GSM and UMTS: The Creation of Global Mobile Communication482
TAP: Type approval administrative procedures (rapporteur from The Netherlands: Hoef-
sloot followed by Jeanty)
†
review of existing or emerging directives and identification of possible difficulties;
†
control and issue of International Mobile Equipment Identities (IMEIs).
TC: Technical coordination (rapporteur from Norway: Bliksrud)
†
validation of CEPT/GSM recommendations;
†
commercial perspectives of MOU signatories on technical GSM options.
N: European network and equipment implementation (rapporteur from FRG: Hillebrand
followed by Linz)
†

validation of system components;
†
network implementation phases;
†
technical type approval matters.
The activity of the MoU group and of its rapporteur groups in the first years had no
centralized support. Each operator contributing either with the MoU chairman or with one
of the seven rapporteurs took care of the secretariat support while operators/administrations
inviting the groups had to take care of all support for the meeting.
It was a very light organization, thanks to the reduced number of people involved. Just to
give an idea the number of people attending MoU plenary meetings was in the order of 25-30
persons.
The actual work was done within the rapporteur groups while the MoU plenary dealt
mainly with the definition of tasks for the rapporteur groups, the approval of the main results,
the discussion of the most relevant/controversial issues.
The MoU group chairman remained in power for a period of 6 months, so that many
signatories might contribute with their experience to that task. The main task of the MoU
chairman, in addition to the co-ordination of the activities, was the relationship with external
bodies, including potential new signatories.
2
In 1989, due to the evolution of activities, it was necessary to review the rapporteur groups’
mandates. Consequently it was decided to move to an organization with ten groups. In
particular three completely new groups were established with the following mandates:
TADIG: Transfer account data interchange group (rapporteur from FRG: Giessler) with
the task to define a MoU standard for the interchange of billing data for international roaming.
The precise mandate and the main results obtained by TADIG are reported in Chapter 3,
Section 3.
SERG: Service expert rapporteur group (rapporteur from the UK: Barnes followed by Hall
and subsequently by Toepfer from FRG)
†

maintenance of commercial aspects of GSM 02 series, recommendations following trans-
fer of responsibilities from ETSI/GSM;
†
allocation/revision of the status of implementation;
†
categories of services and dates of introduction;
†
review of compatibility of services for roaming.
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 483
2
A list of all MoU plenary meetings can be found in Annex 1, a list of the MoU chairpersons in Annex 3.
The main activities and results of this group are described in Chapter 3, Section 2.
SG: Security group (rapporteur from the UK: Brookson)
†
maintenance of algorithms and test sequences;
†
administration of non-disclosure undertaking for algorithms;
†
monitoring of adequacy of system security
Moreover the N group and the TC group were substituted by the following two groups:
RIC: Radio interface co-ordination group (rapporteur from France: Maloberti)
†
coordination of technical aspects of type approval and identification of problems affecting
type approval as results of validation and conflicting interpretations of recommendations;
†
resolution of technical problems with regard to type approval in different countries;
†
organization of compatibility testing of mobiles in different networks to ensure adequacy
of type approval;
†

review of results of GSM validation activities and assessment of effects on implementation
plans;
†
review of system simulator activities through a specific sub-group System Simulator
Project Group (SSPG).
CONIG: Conformance of network interfaces group (rapporteur from The Netherlands:
Vocke followed by Pujol from France) with the task to solve network implementation
incompatibilities through:
†
list/definition of tests for conformance of ‘‘ MAP’’ , ‘‘ A’’ and ‘‘ Abis’’ interfaces;
†
harmonization of test activities.
Due to both the enlargement of the MoU group with new signatories, starting from the
second mobile operators in the already represented countries, and the larger responsibilities
of the MoU following transfer of certain responsibilities from GSM to the MoU, particularly
in the fields of services, security and terminal equipment identity, in 1990 the need arose for a
Permanent Secretariat. It was established and supported by the assistance of the Dutch
Administration. But in September 1991 R. Hagedoorn, the Secretary provided, was no longer
available and the GSM MoU Group decided to accept the offer of Telecom Eireann to
establish the Permanent Secretariat in Dublin under the co-ordination of John Moran.
In 1990 it was also decided to promote the GSM standard in Eastern European countries
and the MoU organized a specific seminar in Budapest under the coordination of Friedhelm
Hillebrand. Similar initiatives were subsequently decided in order to promote the GSM in the
other continents (for details see Chapter 22).
21.1.2 The Main Subjects Dealt with and the Main Results Got by the
MoU Plenary and its Rapporteur Groups
21.1.2.1 The IPR Undertaking
Most probably the IPR issue has been the single subject which took up the most activity time
of the procurement group and of the MoU plenary within the first 2 years of activity.
GSM and UMTS: The Creation of Global Mobile Communication484

Before entering into the description of problems and facts I wish to mention two simple
events which can demonstrate the dimension of the effort produced by the MoU.
During my working experience I spent a large number of days in meetings of international
bodies. All the meetings are well organized and their afternoon sessions ended at reasonable
times. Only twice I experienced meeting sessions initiated on one day which finished on the
subsequent one.
The first one was in Funchal (Madeira, February 1987) on the last day of the most exciting
GSM meeting, when the main GSM radio access parameters were decided. The second one
was in Albufeira at the end of 1988 during the MoU plenary meeting, under my chairmanship,
when we were discussing the IPR issue with the manufacturing industry, and particularly with
Motorola. Unfortunately the results of this meeting were much less exciting and fruitful than
the one in Funchal.
The other fact that I wish to recall was an extraordinary MoU plenary meeting, a telephone
conference, held during the summer of 1988 on the same subject. Friedhelm Hillebrand was
on holiday in Italy in South Tirol. To participate in the meeting he had to use the hotel
telephone, for which the hotel applied a substantial surcharge. If I remember well he had to
pay more for the telephone bill than for the hotel room. That was an experience which today,
with the GSM coverage and roaming extension would not happen.
Entering into the specific facts relating to the IPR, the MoU group, following a specific
objective defined in the MoU, agreed the IPR clauses to be included in the call for tender that
signatories had to send to the manufacturing industry during the first quarter of 1988 for the
GSM network implementation.
The text used by operators, entitled ‘‘ Tenderers undertaking on intellectual property
rights’’ can be found on the attached CD-ROM.
3
Such undertaking had to be signed by
each tenderer before sending it jointly with his offer to the inviting operators. The text
gives clear determination for IPR clauses to be incorporated in the contracts resulting from
the tendering action.
The most important and stringent clause of the undertaking relates to essential IPRs which

should have been given on fair, reasonable, non-discriminatory and royalty-free terms and
conditions (free of any payment of any description).
The main problem experienced was that, while the European manufacturing industry
signed such an undertaking, or a similar version, Motorola refused to sign.
The MoU P group and the MoU plenary had been working with this problem, both with
normal and extraordinary meetings, for 2 years (1988-1989) without being able to find a
solution which might be acceptable for the MoU, the European industry and Motorola.
The practical solution was then found through bilateral agreements of Motorola with other
industries involved. Problems have been experienced by some industries, especially rela-
tively small terminal manufacturers, not having their own IPR basket to be exchanged with
Motorola.
Reference to this experience and the intervention on the matter of the US government, is
mentioned in Chapter 2, Section 4 with a more political approach.
21.1.2.2 Networks Implementation
Probably the main result of the GSM MoU group in its initial activity phase was to convince
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 485
3
See ‘‘ MoU IPR Declaration’’ on the attached CD-ROM in folder D.
the main telecommunication manufacturers about the importance of the project and the actual
willingness of European mobile operators to invest in GSM networks.
In fact, in 1987, after the main decisions on the GSM radio interface had been taken, only
very few manufacturers were deeply involved in the development of the GSM system, while a
large part of them had not yet decided to concentrate enough resources on the GSM project,
and were consequently trying to delay the procurement process. The co-ordinated activity of
European mobile operators, through the MoU group, was determinant in convincing the
manufacturing industry to dedicate the necessary resources to GSM.
The implementation of GSM networks in signatory countries between mid-1991 (agreed
target date) and mid-1992 was reached also thanks to the joint effort of numerous groups
within the GSM MoU, namely P, TC, N, RIC and CONIG.
The main activities co-ordinated or carried out by these groups can be summarized as

follows:
†
publication in January 1988, in the official Journal of the European Community, of the
intention to call for tender by most of the signatories in a coordinated way;
†
co-ordinated calls for tenders in the first quarter 1988;
†
exchange of test results on validation systems in order to ensure compatibility;
†
co-ordination of requests to manufactures in terms of GSM specifications to be used and
their version for the opening of the service.
21.1.2.3 Terminals
The aspects relating to terminals were followed by N and RIC groups for the technical aspects
and from the TAP group for the regulatory ones.
An important activity was carried out for the procurement and the development of the
system simulator, specifically designed for type approval test of GSM terminals.
Such a simulator, supplied by Rhodhe & Schwartz, was procured by a few signatories of
the MoU (the buyer’s club). The buyer’s club oversaw the development and several test
houses bought the system simulator without having to pay for the development costs.
From the administrative point of view the main activities were to follow the draft EEC
Directive on ‘‘ Mutual recognition of type approval for telecommunication terminal equip-
ments’’ in order to monitor that it would be applicable to GSM terminals according to the
MoU view, and to administrate IMEIs.
Due to late availability of terminals and above all of the system simulator, the RIC group
was also involved in the selection of a restricted number of essential tests to be performed on
terminals to get interim type approval.
On the other hand the limited number of tests increased the risk of incompatibility between
networks and terminals. In order to manage such a risk, an advisory board was established by
MoU/TAP and Mou/RIC to study and follow this kind of compatibility problem.
The main principle concerning the responsibility in case incompatibility problems would

happen were established as follows:
1. Mobile Station (MS) manufacturers had the full responsibility that equipment met all
requirements;
2. interim type approval had a time limited validity;
GSM and UMTS: The Creation of Global Mobile Communication486
3. should incompatibility between a network and a mobile station occur, the relevant
problems shall be resolved among the MS manufacturers, the network operator and the
type approval house.
21.1.2.4 European/International Roaming
The European roaming capability, subsequently extended to international roaming, was
followed by the EREG (subsequently IREG) group for the technical aspects and BARG
for tariffs/billing and accounting. The contributions given by TADIG and by SERG have
been already presented in Chapter 3, Sections 2 and 3.
In terms of charging principles the main decisions related to mobile terminated calls.
Specifically it was decided that a mobile client will not be charged for air time either when
he/she is in his/her home country and when he/she is roaming in another country. In the last
case the mobile client will have to pay for the international extension from his country to the
visited one.
Long discussions took place in relation to optimized routing, that is a routing which
reduces to the minimum the connection length and optimizes the quality. EREG proposed
technical solutions already in 1989, but the commercial position expressed by BARG was
contrary to an extensive use of such technique. Finally, accepting the proposal from BARG,
the MoU plenary decided not to introduce optimized routing for international calls.
Years later the optimized routing for calls originated in the same Country where the mobile
client is a visiting roamers was recommended, but, as far as I know, it is not yet practically
used.
Commercial issues against optimized routing have been:
†
the small percentage of interested cases;
†

the technical implications;
†
the risk that the calling party might receive information giving an idea of the called party
position, which might be against privacy rules/laws.
An important tariff principle adopted at that time for mobile originated calls in roaming
environments was that the tariff should have been the same as for a local subscriber increased
by a surcharge (15%) to cover accounting/administrative costs.
Within the technical aspects of roaming, it is also worth mentioning all the studies
performed for identifying adequate signaling relations and routing among the involved
networks, which were not so immediate due to the initial phase of development of the
signaling system no. 7 at that time, and the definition of all tests to be performed, within
bilateral agreements, between MoU signatories, in order to make the roaming between two
operators a reality.
21.1.2.5 Marketing and Planning
A set of activities quite important for the development of the GSM system all around the
world was carried out by the MoU group.
First was the decision about the name and the logo. In 1988 GSM was just the ‘‘ Groupe
Spe
´
cial Mobile’’ and not many people believed that GSM might be used as a brand. In fact the
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 487
MP group was asked to find an appropriate name and during the MoU plenary, John Peet,
from Vodafone, offered a case of champagne to the person who suggested the name which at
the end was adopted. I forgot to ask John whether he paid or not due to the fact that GSM was
an already known name, or whether he considered as valid for the prize the definition of
‘‘ Global System for Mobile Communication’’ .
Other important tasks performed by MP had been the continuous update and emission of
coverage maps, the development of advertising material as well as the organization of the
GSM presence in important events, starting from the Geneva 1991 telecommunication exhi-
bition.

21.1.2.6 Co-operation Agreement with the Association of PCN operators
In 1990 three licences were given in the UK for the operation of cellular networks denomi-
nated Personal Communication Networks (PCN) using GSM at 1800 MHz. The following
merger of two companies reduced the PCN operators to two, One Two One and Orange.
The term PCN derived from the desire to differentiate the new service from the ‘‘ normal’’
cellular service. In practice the only actual differentiations were of regulatory nature, while
from the technical point of view the PCN simply used the extension of GSM from 900 to 1800
MHz. The main regulatory differences with respects to the rules applied to Cellnet and
Vodafone, the two operators using the 900MHz band, were:
†
the new operators could commercialize the service directly, so that they could keep direct
contact with the client, while the existing ones had to use service providers;
†
the fixed operators were obliged to apply a lower transfer price for fixed to mobile calls, so
that the new operators might be able to offer lower tariffs for this kind of traffic.
Substantially it was a way to compensate the newcomers for the disadvantage they would
have experienced in entering the competitive market with a coverage considerably smaller
than that offered by the existing operators. The same objective has been reached initially in
Italy, and subsequently in other countries, by obliging incumbent operators to offer national
roaming to new entrants for a defined period of time at cost oriented prices.
The UK PCN operators preferred to differentiate themselves also in the international arena,
creating a new body, the European Association of PCN Operators. However, part of the GSM
recommendations had been already transferred to the GSM MoU group, so that an agreement
had to be defined with the new association for an ordinate development of 900 and 1800 MHz
networks in order to avoid future and potential incompatibilities for dual band networks and
terminals. The main terms of the agreement reached in 1991 were the following:
†
the PCN association had to partially compensate the GSM MoU group for the historical
costs, and had to contribute to future costs;
†

the PCN association had access to the documentation of the GSM MoU subgroups and the
right to participate at their meetings as well as the commitment to contribute to their
activities.
We can say that PCN operators have participated to the activities of the MoU group, while
keeping their differentiation which disappeared some years later when also the regulatory
differences disappeared.
GSM and UMTS: The Creation of Global Mobile Communication488
21.1.2.7 Modification of the MoU to Allow the Entrance of new Operators and the
International Expansion of GSM
In mid-1991 the GSM MoU group was still limited to 17 countries and 29 signatories, four of
which were administrations.
The need was identified to amend the MoU with two main objectives:
†
to allow new operators of the already represented countries without the obligation of
opening the service in 1991;
†
to enlarge the GSM presence around the world as much as possible, with advantages in
terms of economy of scale and roaming extension.
The agreed amendment to the GSM MoU included the following main concepts:
†
the MoU might be signed by any telecommunication administration and by any operator
authorized to provide public digital cellular mobile telecommunication service at 900
MHz;
†
new network operator signatories had to procure operational networks using GSM recom-
mendations with the objective of providing public commercial service within 2 years from
their signature.
The limitation to 900 MHz was subsequently removed both in order to accept 1800 MHz
and 900/1800 operators as well as to extend to the 1900 MHz band. The occasion of the MoU
amendment was taken also in order to improve the continuity of the MoU group management

by increasing the time duration of chairmen from 6 to 12 months.
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 489
Chapter 21: The Contribution of
the GSM Association to the
Building of GSM and UMTS
Section 2: God Send Mobiles, the Experiences of an
Operator Pioneer
George Schmitt
21.2.1 Setting the Scene
It was 14 December 1989 and the Mannesmann consortium was awarded the D2 license to
build a GSM network in Germany. It was a surprise award as most expected the license to go
to one of the other 13 consortia that bid for the license. It was the first competitive license
awarded in the world that had to use GSM technology. The terms of the license were simple:
Build a network and have it in service within 18 months and have it cover 95% of the people
and the area of then West Germany within 5 years.
Pacific Telesis, a major US based telephone company and a major player in the US mobile
telephone market with analog cellular networks covering over 60 million Americans, led
Mannesmanns’ partners in the consortium from a technical point of view. The other consor-
tium partners included DG Bank, Cable & Wireless, Lyonaise de Eaux with two small
German unions. Pacific Telesis was to lead the technical development of the network. Just
before Christmas of 1989, Telesis announced that I would be their lead representative…. And
so the work began.
On arrival in Duesseldorf on 3 January 1990, I made my way to Schanzenstrassse 66 in
Oberkassel, our new headquarters, with about 20 other Americans. We soon discovered that
we had a lot more work to do than we thought.
21.2.2 Building a Network and Selecting Suppliers
The GSM standard was not yet completed and the version then available, abis21 could not be
used to build a commercial system, but the license requirements were set in stone and had to
be met. Along with our new colleagues, we prepared a request for proposal and began general
planning for the network. In February 1990, the RFP was released. The proposals were due to

GSM and UMTS: The Creation of Global Mobile Communication
Edited by Friedhelm Hillebrand
Copyright q 2001 John Wiley & Sons Ltd
ISBNs: 0-470-84322-5 (Hardback); 0-470-845546 (Electronic)
be returned by mid-March 1990. Among other conditions, Mannesmann required the winning
bidder to agree to pay a penalty of up to DM 1 million per day if they failed to deliver the
network elements on time and the government levied fines against Mannesmann. They also
needed to agree to a penalty of DM 1 billion if the license was revoked because of their non-
performance. Bids were received from Motorola and AT&T in the US, Siemens with Philips
and Bosch as their partner, Ericsson with Matra as their partner and Nokia with SEL as a
partner. German and American teams evaluated the bids looking at switching, O&M, GSM
radios, size and weight of equipment, features to be provided, compliance to GSM abis21 and
any agreed changes to it, price and warranties and acceptance of the penalty provisions. Any
winning bidder had to accept the penalties in full or would be eliminated from the award
instantly.
AT&T was the first vendor to be eliminated. With typical arrogance, they bid a non-
compliant system with almost total disregard for the GSM standard as it existed. The next
consortium eliminated was the SEL/Nokia consortium when the lead partner SEL announced
that they could not make the dates and were unwilling to accept the penalties. This infuriated
Nokia, who had not been consulted prior to the announcement, which eliminated them from
the bidding. The other three consortiums were in heavy contention with Ericsson and Motor-
ola leading the way. Motorola lost credibility quickly when their lawyer kept overruling their
business people in the negotiation process. Motorola was totally eliminated when the consor-
tium learned that Craig McCaw was replacing the system in New York City with Ericsson
equipment due to continuing technical problems with Motorola.
In the end, Ericsson became the primary supplier due largely to customer references from
McCaw in the US, Televerket in Sweden, and several South American companies. Siemens
won a 25% portion of the contract with its partners. Both signed up for the penalties but
without any liability for the others failure to perform. Looking back, this probably kept both
companies from working together to reduce problems for us, and we were later to find out that

Deutsche Telekom had explicitly ordered Siemens not to partner with Ericsson over a year
earlier. This cost Siemens dearly when they had trouble meeting standards a year later as their
equipment was removed from the network and replaced with Ericsson base stations.
21.2.3 The Next Big Hurdles: Interconnection and Type Approval
During this same timeframe, we began to understand two other major issues:
1. The interconnection of the D2 network with Deutsche Telekoms network and the rest of
the world.
2. Type approval for mobiles and system integration testing and the difficulty of getting that
accomplished on time.
We had no idea how horrible the type approval process was and would become and what
the cost of delays in having commercial handsets available would be, we will discuss this
issue later.
21.2.3.1 Interconnection
We knew Deutsche Telekom would be a problem for interconnection but were able to secure
the ‘‘yellow book’’ , a publicly available document to guide us. With the data from that book,
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 491
we were able to decode the Deutsche Telekom network and determine where we could
interconnect with them.
As it ended up, we agreed to interconnect our gateways in Frankfurt and Duesseldorf,
which required us to purchase more back-haul to interconnect our network than other loca-
tions. But as a trade-off for our cooperation with Deutsche Telekom’s bidding on intercon-
nection, the ministry agreed to allow us to use microwave which ended up being a huge cost
saving for us and ultimately broke Deutsche Telekom’s monopoly on 2 MB circuits. They
could no longer stop our network from being connected and in service on time!
21.2.3.2 The Availability of Mobiles and the Type Approval Process
The availability of mobiles became a nightmare. In 1988 ten network operators had issued
contracts for infrastructure, This triggered the development of GSM in many infrastructure
companies. Nobody had issued contracts for mobiles. Everybody had believed the market
would generate a broad supply automatically. This was overoptimistic, since in 1990/1991
there was a reasonable supply of infrastructure, but no mobiles.

The biggest mistake we made was not ‘‘ jumping on’’ a 30 day valid offer from Ericsson to
guarantee to supply mobiles when we gave them the infrastructure contract. By the time we
had managing board approval to sign a supply contract the offer had expired and Ericsson
wisely decided not to extend the offer. In the end, a great decision on their part and the start of
our biggest problem, getting type approved mobiles for our customers.
Type approval for mobiles was initially put in place to assure that every mobile works in
every network and that no harm was done to any network in Europe when mobiles moved
across borders. GSM was designed to be the first Pan-European system and the fixed network
operators were concerned about ‘‘ Harms to the network’’ much as AT&T was in the US in the
1970s.
Type approval was a nightmare from the start. It was originally envisaged as a software
system with over 400 tests that had to be ‘‘ passed’’ before a mobile could be sold to the public.
The problem was we needed a perfect network before the type approval software could be put
together and tested. The type approval software manufacturer Rohde & Schwarz also
required working mobiles before it could manufacture software. The set of requirements
were a classic chicken/egg problem and became painfully apparent in late 1990.
We struggled with the type approval process until mid-1991 and then decided it could not
and would not work as designed. We had a series of meeting with the EU, BMPT (Ministry of
Post and Telecommunication) in Germany and the various working groups of ETSI and the
GSM MoU group.
By 30 June 1991, with over $500 million invested in the D2 network, we had exactly 50 20
W non-type approved mobiles from Motorola, at a cost of $20 000 each, but they worked!
We had a commercial system installed by Ericsson and Siemens, but no manufacturer close
to having a commercial mobile of any size or type. But, we had saved our license and gotten
through our first tests.
By the end of 1991, we knew that the type approval process had to go away. By then 15
switches and 375 base stations were installed and 750 were being built and installed.
The start of the campaign to change the type approval regime began in early 1992 when the
slogan GSM –‘‘God Send Mobiles’’ was introduced at the GSM world congress in Berlin in
early February. By then we had received permission from Minister Christian Schwartz-Shil-

GSM and UMTS: The Creation of Global Mobile Communication492
ling to open our network in Germany without type approved mobiles. The administration of
BMPT had assigned people to figure out how to do the interconnection without type approved
mobiles even if it meant no intentional roaming. We went to the EU and met with the director
general and his staff and explained to them that the D2 network would open using non-type
approved equipment. They were shocked that the German government would allow this. Mr.
Hubert Ungerer of DG13 used his power to help cause an interim type approval regime to
come into place without EU interference.
The GSM MoU met in late February 1992 and determined by a close vote that an interim
type approval regime would be put in place, with the deciding votes cast by Deutsche
Telekom by direct order of the ministry.
By May, Ericsson, Nokia, and Siemens were providing a few commercial handsets with
interim type approval and on 16 June 1992 the first GSM mobiles were installed in customers’
cars! The worst of the journey to type approval was over, from there the rest is history.
By the end of 1992, D2 had 120 000 paying customers and had purchased and sold 25 000
Ericsson £1 handhelds called ‘‘ Hot Line’’ , by far the smallest handhelds in Europe at the time.
Every GSM mobile manufactured was shipped and sold at a profit as fast as we could get
them. Demand far outstripped supply. By mid-1993, nearly 350 000 customers were on the
network and by the end of 1993 D2 was approaching breakeven cash flow and 1 million
customers. Every step of the way was a fight. Billions of dollars were invested in networks,
but there were no mobiles due to the bureaucracies and process.
21.2.4 The Lessons not Learned
One would think that future generations would attack the device problem early and often….
Unfortunately, that was not the case.
In late 1992, work began on General Packet Radio Service (GPRS), by late 1999 software
for the network was available but mobiles only started to arrive in 2001. I will predict 3G will
suffer even more before it becomes fully commercially available.
The reason is always the same. Operators issue infrastructure contracts early. Then the
development and supply begins. Everybody believes mobiles will ‘‘ fall from heaven’’ .
The real problem is we continue to have the same issue over and over.

21.2.5 And Now for the Good Things
Competition: every country in Europe has at least three GSM operators, and most have four.
And in accordance with capitalistic economic theory as competition thrived prices fell and
demand increased dramatically. Europe leads the rest of the world by far in the development
and use of mobile telephony by its citizens. It is the best example of Europe leading North
America in any technology.
Business development: the decision in 1992 to export GSM technology and algorithms
beyond Europe has added dramatically to the dominance of GSM technology around the
world. The technology is embraced by the vast majority of the countries of the world and has
more than five times the number of customers than any other digital wireless technology. This
is in spite of the ill-advised interference of the Clinton Administration on behalf of the
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 493
Qualcomm narrowband CDMA standard. Unless Europe falters, it should lead the way and
dominate the 3G standard development and implementation as well.
Jobs and industrial growth: the development of GSM and its success around the world
revitalized European telecom manufacturers to grow and prosper throughout the 1990s.
Nokia becoming the dominant worldwide leader in handheld mobiles, LM Ericsson becom-
ing the dominant force in GSM base station development, with Siemens and Alcatal claiming
larger shares of the worldwide market. All at the expense of Lucent formally Western Electric
and Motorola of the US who had dominated sales of analog cellular technology but failed to
understand the worldwide markets.
European pride: In the end, the thousands of people who worked so hard on the standar-
dization and development of the GSM standard have much to be proud of and those of us who
engineered, installed and marketed these networks can be equally proud of what was accom-
plished in a relatively short period of time.
Customers: the miracle of GSM is best demonstrated by the use of the systems around the
world, with over 500 million customers by mid-2001. And in many lesser developed parts of
the world, people now have communications; modern and up to date and countless people
have used GSM mobiles to make their first telephone calls. What a long way in less than 10
years!

It is my hope that we have learned from the past and that our successors will develop
networks and mobile devices at the same time so that never again will frustrated operators
have to utter the equivalent of the words ‘‘ God Send Mobiles’’ .
GSM and UMTS: The Creation of Global Mobile Communication494
Chapter 21: The Contribution of
the GSM Association to the
Building of GSM and UMTS
Section 3: The Evolution from the Informal GSM MoU
Group to the GSM Association from 1992 to 1998
Arne Foxman
1
At the start of my chairmanship of the GSM MoU Group in September 1991 the GSM system
had been implemented in a number of member countries as described in Chapter 21, Section
1, thus fulfilling the fundamental requirement of operation in 1991, but in a non-commercial
role, hampered by the lack of mobile stations. As an example Telecom Denmark had on 1
July 1991 13 operational base stations but only two test mobiles!
In a formal sense the basic requirement in the GSM MoU action plan of having an opera-
tional system by 1 July 1991 had been met, but a commercial start was not to happen until
mobile stations were available in reasonable numbers, which turned out to be in spring 1992!
A GSM MoU Group Secretariat/support function had been established and supported by
the kind assistance of the Dutch administration, but in September 1991 the secretary provided
was no longer available due to internal re-allocation of responsibilities and the GSM MoU
Group decided to accept the kind offer of Telecom Eireann to make John Moran available as
GSM MoU Group co-ordinator in facilities provided in Dublin. This was to become the
established headquarters until the present day.
The increased workload made it necessary to have a chairman in office not for 6 months but
for a full year and this was implemented in 1992, starting with the chairmanship of Kari
Martinnen.
21.3.1 The Initial GSM MoU Group Structure
The commercial success of GSM was dependant on the resolution of a substantial amount of

practical and administrative details, what caused the GSM MoU Group to initially establish a
number of working groups, which have been outlined in Chapter 21, Section 1.
A few comments on the results.
1
The views expressed in this section are those of the author and do not necessarily reflect the views of his affiliation
entity.
GSM and UMTS: The Creation of Global Mobile Communication
Edited by Friedhelm Hillebrand
Copyright q 2001 John Wiley & Sons Ltd
ISBNs: 0-470-84322-5 (Hardback); 0-470-845546 (Electronic)
21.3.1.1 The IPR Question
This was an effort to assist in the procurement process to take care of the Intellectual Property
Rights (IPR) issue as a result of the GSM MoU Group deliberations and its contacts with the
manufacturing industry.
Some GSM MoU Group members were very much concerned with securing a supply of
mobile stations from independent manufactures not being part of the infrastructure consortia.
This was finally achieved in the relevant GSM infrastructure contract appendices as part of
the original procurement activity as a kind of ‘‘ Musketeer Oath’’ mentioned in Chapter 21,
Section 2.1.
2
The basic idea was two-fold:
1. To prevent a manufacturer from blocking access to essential IPR’s to be used by a supplier
to another GSM MoU Group member; and
2. To provide access to essential IPR’s for manufacturers of GSM mobile stations indepen-
dently of infrastructure supply contracts.
This approach, based on ‘‘Fair, reasonable and non-discriminatory terms and conditions’’ ,
proved to be a success in the sense that no blocking has been reported and at the same time it
has respected the commercial IPR interests
21.3.1.2 European Roaming
It was obvious that economy of scale could only be achieved by having a truly European

system, fully integrated and everywhere allowing customers the same basic services and
uncomplicated roaming between the GSM MoU country systems. The Nordic NMT system
had proven the success of this approach albeit at a smaller and simpler scale.
The GSM MoU Group decided that outgoing calls made by roamers should be charged at
the national standard tariff with a surcharge (15%) to cover administrative expenditures. This
surcharge represented an agreed ceiling and the surcharge was an option at the discretion of
the HPLMN operator.
Mobile terminated calls to roamers would be handled as national calls in the visited
network, whereas the originating GSM MoU network was free to apply an international
call charge on top of the normal national mobile tariff.
It should also be noted that as a basic principle the roamer, receiving a call from the
national GSM network, has to pay for the transfer of the call from the national GSM network
to the visited network for two reasons:
1. The caller is – and has by requirement to be – unaware of the location of the mobile
subscriber for privacy reasons. He/she is therefore unaware of the cost of the call. The
switching systems charges are based on the number called, rather than on the routing of the
call.
2. 2. The roaming party is enjoying the service of having the call transferred and is thus the
logical party to face the cost.
This solution has worked extremely well in connection with the GSM authentication
GSM and UMTS: The Creation of Global Mobile Communication496
2
The IPR statement used in a GSM systems contract between Telecom Denmark and L.M. Ericsson AB illustrates
the approach and can be found on the attached CD-ROM in folder D.
process as an uncomplicated approach, which has now migrated to be truly global based on
bilateral roaming agreements between operators, outlining commercial and testing aspects
based on the activities defined below.
21.3.1.3 Billing and Accounting
This group has faced and solved an enormous task of accommodating all national charging
principles and procedures into a manageable, common framework for all GSM MoU signa-

tories on a global scale as a prerequisite for the interchange of billing data.
21.3.1.4 Transfer Account Data Interchange
In the early days of roaming, file transfer was based on exchange of data tapes on a monthly or
bi-monthly basis. Soon it was realised that practical issues, as well as fraud, caused by
running up large bills in a visited network with no intention of paying, necessitated an
electronic data transfer method.At the same time the number of roaming agreements
increased steeply making a bilateral accounting procedure unattractive. As a consequence
a small number of clearing houses (data clearing houses) were established acting as a hub for
transmission of call data, which the clearing house then arranged in one batch for each
participating operator at a nominal fee per record.
The exchange of calling data has been constantly developed and is now almost real-time
(so-called ‘‘ hot billing’’). (For a detailed report see Chapter 21, Section 6.)
21.3.1.5 Type Approval
The problem of securing a Pan-European system interworking with all brands of mobile
stations (terminals) in all GSM networks was from the outset considered a major problem
and a prerequisite for success.
As part of the initial procurement co-operation the GSM MoU Group had established a
common set of specifications for type approval test equipment. Procurement of a simulator
from the elected manufacturer (Rohde and Schwartz) was agreed by the individual test houses
in order to facilitate the handling and validation of test cases and thus assuring a common test
platform.
This turned out to be a crucial activity, which is partly covered in Chapter 21, Section 2,
21.3.2 and 21.3.3 (below).
21.3.1.6 Marketing Planning
The GSM MoU (MP) group spent considerable effort in collecting and distributing GSM
coverage information in a comparable and easily understood manner. This information was
crucial in the national networks for customer information on roaming and for securing
realistic comparison between national, competitive networks.
The GSM MoU Group developed a database in Dublin and a ‘‘ Map-Info’’ application for
the presentation.

Considerable effort was spent on developing and protecting the GSM logo. France Tele-
com, on behalf of the GSM MoU Group, initially performed this task and later this task was
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 497
transferred to Dublin and France Telecom was reimbursed for the considerable expenditure
involved.
21.3.1.7 Services Group (MoU-SERG)
This group secured the availability of services in the same form at an agreed timetable to
secure that roaming customers could reasonably expect the same service independent of
location. (See detailed report in Chapter 21, Section 5.)
Finally – as a most important aspect – the GSM MoU Group had established:
21.3.1.8 The Security Group (MoU-SG)
†
Administration of non-disclosure undertaking for algorithms
†
Maintenance of algorithms and test sequences
†
Monitoring of adequacy of system security and proposals for enhancements as required.
It should be noted that the GSM MoU Group handles the authentication algorithm (A3/A8)
for its members based on a sample algorithm, which can be used at the individual GSM MoU
Group operator’s discretion. As the A3/A8 algorithm is used exclusively inside the individual
operator’s network, the operators are free to use propriety algorithms to improve security and
it should be noted that the authentication registers are specified to handle more than one
algorithm. This allows introduction or phasing-in of new algorithms without recalling or re-
issuing Subscriber Identity Module (SIM) cards.
The encryption algorithm (A5) used in the radio part of the network must for technical
reasons be identical in all networks and the GSM MoU Group SG is responsible for control-
ling the restricted distribution of the algorithm specification and safeguarding the system.
It should be noted that the encryption of the GSM system is designed to protect the privacy
over the radio part of the system to a reasonable, non-military level. A5 is a 64 bit algorithm,
which met some initial protest by relevant authorities, forcing the GSM MoU Group to

activate only 54 bit initially and to accept that some member countries would not at all accept
encryption over the radio part of GSM.
The security group also plays an important role in spreading knowledge about any attacks
on the security. In addition it provides know-how to new members of the GSM MoU Group
on all security issues.
21.3.2 The Initial Regulatory Aspects
A European system allowing for uncomplicated roaming and border crossing with mobile
stations was not an obvious feature at the creation of GSM.
The GSM MoU Group achieved in close cooperation with CEPT regulatory bodies free
circulation (border crossing) of mobiles without requirement for a formal license document
via recognition of the type approval marking as a substitute for a license.
At the start of GSM operations, the specification was part of the NET regime and as no
validated mobile station type approval test equipment was available from day one, the MoU-
RIC group had to define a subset of 266 tests from ETSI’s 11.10 (NET 10) to form the basis
for an Interim Type Approval (ITA) intended to expedite the availability of mobile stations at
GSM and UMTS: The Creation of Global Mobile Communication498
an acceptable level, while waiting for the availability of test facilities for the full NET 10
testing.
Problems with the availability of ITA equipment forced the MoU to apply a two step
procedure, where the 160 most essential tests formed the basis of the ITA, but still requiring
testing to the full 266 test complement as and when these test cases were available.
It should also be noted that a manufacturer submitting equipment for ITA had at the same
time to request full type approval testing to the NET 10 level and was obliged to rectify any
problems encountered after the ITA that could endanger the GSM system operation.
The MoU had to set up a type approval advisory board (MoU-TAAB) to assist in inter-
pretation of any disputes in the testing process and to secure action to be taken by the
responsible parties, which may be either ETSI-TC-GSM, MoU-RIC or, via MoU-TAAB,
the regulatory bodies.
This MoU-TAAB was envisaged as an interim measure, which would later be substituted
by the general recognition arrangements and type approval procedures as these became

available and as the GSM standard achieved stability based on operational experiences.
MoU-TAAB has however been solving the practical problems in a very efficient way
under several regimes and several names, and has proven its value many times over.
The GSM MoU Group obtained recognition of the International Mobile Equipment Iden-
tity (IMEI) as part of the type approval procedure and established the register in the perma-
nent GSM MoU Group secretariat in Dublin – initially as a document – but now as a data base
accessible for operators, type approval authorities and mobile station manufacturers.
The Equipment Identity Register (EIR) is functionally specified in the GSM standard, but
the fact that the legal relation between the GSM operators and the subscribers is vested in the
SIM card, which is independent of the physical equipment and its IMEI, provided several
problems, especially in the handling of stolen mobile stations via the ‘‘ Black List’’ .
Although the EIR is not a mandatory feature in the GSM system it is worth noting that
some regulatory bodies have set the condition that only type approved mobile stations must
be used in the nationally licensed networks, thus de facto making use of the EIR and its
‘‘ White List’’ a mandatory requirement in these countries.
The ‘‘ Black List’’ is not a mandatory feature, but is to be seen as a service to the mobile
customer and a support to the police in the dealing with stolen mobile stations.
21.3.3 The Type Approval Development: Financing, Creation of GSM-
Facilities Ltd
The initial procurement of system simulators (from Rohde and Schwartz) was financed
mainly by a buyer’s club of leading operators. They financed the system development.
This allowed national test houses, often owned by the national operators, to buy the system
simulator more or less at hardware cost. The operators (mainly Monopoly Operator (PTT))
considered this as part of the investment necessary to implement a Pan-European mobile
radio system.
This worked well for the initial phase 1 of the GSM specification, but at the end of 1992 the
GSM MoU Group ‘‘ buyer’s club’’, dealing with the subject, indicated that there was no
intention to finance the further activities in Phase 1 testing or the development and validation
of the phase 2 test cases.
Chapter 21: The Contribution of the GSM Association to the Building of GSM and UMTS 499

The main reason was the explosive increase in investments, which the test houses could not
possibly recover from type approval testing fees. No subsidies from mother companies were
available any longer.
At the same time lack of manpower in ETSI PT 12 delayed the handling and production of
test cases and the GSM MoU Group consequently endeavoured to make such resources
available.
The GSM MoU Group decided during 1993/1994 to establish an organisation, GSM-
Facilities Ltd, which would finance the test activities via contributions from the GSM
MoU Group members at an estimated investment of 15 million ECU (about 16 million
Euro). The GSM MoU Group had to create this legal entity in order to be able to place
contracts and to manage these activities.
The main initial activities were:
1. Financing of upgrading the Rohde and Schwartz simulator to GSM phase 2. (The contract
covered the hardware development and software costs, whereas the individual test houses
had to procure the physical modification at their own cost.)
2. Financing of the validation of test cases.
3. Financing a SIM simulator development (ORGA)
4. Financing a signalling tester (CRAY)
The GSM MoU Group was in close contact with the European Union, where General
Directorate XIII offered financial support for the test cases, provided these were written in
the TTCN language, which was finally achieved via ETSI support.
GSM-Facilities Ltd played an important role in achieving type approval, first against the
initial net regime and later the CTR regime (CTR 5 and 9). The above-mentioned TAAB
group served as an important ‘‘ problem solver’’ in its more formal role as NTAAB inside the
ACTE framework. The NTAAB chairman maintained close relations with the administrative
GSM-Facilities Ltd thus securing ‘‘ value for money’’ in the process.
It was a prerequisite for membership of the GSM MoU Group and later the GSM Associa-
tion that the member operator was also party to GSM-Facilities Ltd and paid the cost
involved. Considerable effort was spent on developing a fair contribution algorithm penalis-
ing neither the small new operators nor the very big operators. It is my impression that the

result achieved by Mrs Gretel Hoffmann in her chairmanship fulfilled the criteria.
GSM-Facilities Ltd served its role until October 1998 when it was finally liquidated. The
remaining activities were of a minor maintenance nature and these were transferred to the
GSM Association, which was at that time established as a legal entity. It is worth noting that
GSM-Facilities Ltd stayed within the budget of 15 million ECU.
21.3.4 The Co-operation Agreement with ETSI
As the GSM MoU Group became more and more international, the ETSI policy of restricting
access to documentation to ETSI members and also the policy for non-European GSM MoU
Group member participation in the standardisation work became quite an issue.
In close co-operation with Friedhelm Hillebrand a co-operation agreement between ETSI
and the GSM MoU Group was signed in 1996 as described in Chapter 5, Section 2, paragraph
5.2.5.1.
GSM and UMTS: The Creation of Global Mobile Communication500