Hurry Up and Wait for Speedy Wireless Nets
Today, we live in a second-generation wireless world, but the next wave is bearing upon us -- if gingerly. With it comes a promise of a more robust network that puts your whole MP3 collection within reach, keeps your calendar updated to the minute, and even lets you choose and watch a movie on your PDA on the train ride home.
So-called "2G" (second-generation) network technology is differentiated from 1G primarily as a move from analog to digital. Among the common 2G networks are CDMA, GSM, and TDMA. But 2G is slow for data services; most wireless Web access moves at snail-like speeds of 10 to 19 kilobits per second. Proponents of 3G networks promise speeds from 384 kbps to 2 megabits per second. At 3G speeds, mobile phones or handheld devices could handle high-speed multimedia and become all-in-one communication, entertainment, and information devices.
But if you're eager to catch the wave of high-speed wireless services, you may have to wait a few years for 3G technology to cross the ocean from Europe to North America. Such networks are only starting to roll out in Japan and Europe. With them come mobile phones and handheld computers that are not just capable of accessing the Web, but comfortable dealing with cyberspace.
Proponents hope the technology will be to existing wireless access as broadband is to dial-up, providing a worthwhile boost that pushes people to move up the technological ladder. Still, analysts expect the technology's cost and current customer disinterest will keep it from being widespread in the United States until 2003 or later.
Carriers Explore a Half Step
We'll get a little spurt in the interim. Technologies called "2.5G" will deliver faster speeds, between 56 kbps to 144 kbps. Carriers say 2.5G networks, such as General Packet Radio Service (GPRS), can adequately handle most 3G services. Plus, they're less expensive to implement.
Still, rollout of even 2.5G networks is slow. Large U.S. carriers Sprint PCS, Verizon Wireless, and AT&T Wireless are implementing provisional 2.5G networks designed to stretch the costly equipment already in place. Among the progress:
- The nation's largest wireless carrier, Verizon Wireless, a joint venture of Verizon Communications and Vodafone, is testing 144-kbps service and plans to offer it commercially later this year. Verizon executives say they are in no rush to offer 3G services, and for the next three to four years 2G will suffice.
- AT&T Wireless says more than 40 percent of its network will be upgraded to 2G speeds by the end of this year, but does not promise a complete rollout sooner than the end of 2002.
- Sprint PCS plans to deploy 2.5G technology by the end of next year. Sprint already owns enough airwave capacity (known as spectrum) to deploy 3G and will spend only $700 million to $800 million to upgrade its network to do so.
- Cingular Wireless says it won't begin to offer 3G speeds of 800 kbps until 2003. In the meantime, 2.5G speeds of 56 kbps will become available to all its voice customers in California, Nevada, Washington, and the Carolinas this fall.
- Metricom is slowly rolling out its Ricochet 144-kbps wireless data service to major metropolitan areas. But it has pared back rollouts to major cities, such as Boston, because of slow sales.
Weak Wireless Demand
Carriers continue to question what sort of wireless capabilities, besides standard voice calls, Americans will actually pay for. Many, like AT&T Wireless, offer a limited menu of Web services. AT&T Wireless provides text-only information from Yahoo and CNN. But using tooth-extraction-slow speeds to watered-down content delivered to devices that sport displays the size of Post-It Notes isn't catching on.
Of 15 million customers, AT&T Wireless had only 300,000 subscribers for its PocketNet service by last fall. Sprint PCS says 500,000 of its 10 million wireless customers subscribe to its data offerings. Another 500,000 Sprint PCS customers can get access to the wireless Web as part of a service contract, but don't use it regularly. About 750,000 of Verizon Wireless' 27.5 million customers subscribe to data services. Cingular Wireless reports only 500,000 adopters, among more than 20 million subscribers, for its data service.
For now, consumers aren't demanding much more than wireless access to e-mail, says Bryan McCann, Sprint PCS vice president of Wireless Data Services. He says Sprint PCS can handily support e-mail over 2G networks.
So how will they hook us on the new, faster (and probably higher-fee) wireless? Services, says the consensus.
For example, a service might beam to your cell phone a digital coupon for 50 cents off a latte at the Starbucks four blocks down the street. Or mobile alert services could notify you when a radio program or song you like is playing.
But carriers are stuck in a classic chicken-and-egg dilemma. Do they spend billions on network upgrades before consumers are interested? Or do they wait to build after mobile services grow more popular?
Meanwhile, firms like JP Systems are looking to unload unprofitable wireless consumer services. JP Systems says it wants to sell off its InfoBeam mobile application service and focus more on the mobile business market.
"Taking (applications) from the Web and translating them for mobile devices is crap," says Jacob Christfort, chief technology officer for wireless solutions provider OracleMobile.
3G or Not 3G?
The greater speeds of 2.5G, up to 144 kbps, may be adequate to whet the 3G appetites of consumers. That will give companies like AT&T Wireless and Sprint PCS time to postpone costly 3G upgrades, and let them milk existing networks for everything they're worth.
Sprint PCS is designing software to mimic 3G speeds on 2G networks. By storing frequently requested data like a Web site's background, a wireless device can produce data faster.
Other carriers are developing data-compression software in their networks that dramatically reduces the amount of network capacity needed for most wireless Internet services. Experts say upgrades like these could cost about one-fifth as much as taking the jump to a brand new third generation.