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GSM technology is well on the way to getting its next billion subscribers worldwide. The geographical area where it dominates is growing in the wake of the American shift away from TDMA and to GSM, coupled with the arrival of new and untapped mass markets in developing economies.

Björn Samuelsson, Vice President Product Management GSM RAN at Ericsson, says: "We're currently witnessing a phenomenal surge in demand for GSM equipment."

He confirms Ericsson's commitment to continued development of GSM technology: "Operators have invested a lot in GSM over the years and since we are world leaders in delivering and expanding GSM networks, our strategy is to strengthen our technological leadership further and to use the leverage offered by our 40 percent market share to offer new types of cost-effective solutions."

The fact that many GSM operators are simultaneously investing in next-generation high-capacity WCDMA networks means transparency of network functionality and user services is a prime concern. Samuelsson explains Ericsson's strategy to deal with the issue: "We will continue developing GSM and EDGE to deliver the same kind of services as WCDMA, and to make sure that handover between WCDMA and EDGE is as seamless as possible for the end user. The goal is that the end user should not notice whether he or she is using one technology or the other."

EDGE forms a natural stepping stone between GSM and WCDMA, since it lets GSM operators change their networks gradually and cost-efficiently into high-capacity solutions. EDGE also lets end users get accustomed to many of the new services heralded by the advent of 3G.

Operators that pursue a strategy of parallel GSM and WCDMA expansion also benefit from new Ericsson GSM features such as a core network and an operations & support system common to both technologies.

Samuelsson says the other main development path today in GSM today is driven by a demand for low-cost, low-entry solutions in markets where GSM - and even mass-market mobile telephony as such - is in its infancy: "More than 80 percent of the next billion GSM subscribers expected by 2008 will be found in developing economies. It is important for us to offer products and solutions to operators where cost of ownership is crucial."

But cost of ownership remains important to network owners in mature economies as well - where GSM coverage often still leaves a little to be desired. Samuelsson says: "Low-cost solutions such as the ability to share networks let operators expand coverage to new areas that may have been too small to justify network expansion in the past."

Ericsson has launched a new initiative called Expander - a family of GSM services and solutions that makes it profitable for operators to expand their subscriber bases to include end users with limited financial resources.