Deconstructing 3G

The mobile world has come a long way from analogue days of yore. In those days, the ability to communicate wirelessly – period – was not only far more innovative and exciting than anything before, but users were satisfied with the service despite the ever-constant muffled voice delivery, static and the awaited and anticipated disconnection. Then suddenly, wired life moved into the fast lane on the Information Super Highway with the Internet going high-speed, and the wireless world has not been the same since.

Now, mobile users are demanding the same performance they get at the desktop available on the handheld. This means that 14Kbps is no longer an acceptable speed. Mobile users are demanding to do more than talk with these wireless devices and carriers around the world have been working for ten years to bring these high speeds into fruition. These speeds of 2Mbps up to 10Mbps are known as Third Generation (3G) wireless. 3G wireless represents a world where the transfer of anything from e-mail, to MP3s to full video clips are easily done at the push of a wireless button. If this sounds too futuristic, that is simply because it is. Although telcos anticipated that North America would be in 3G paradise by now, the reality is that we are only just entering the predecessor stage – 2.5G. Still, the hype continues to build around 3G. So what exactly will 3G bring and when? And what will it ultimately mean for the Canadian enterprise?

Promises, promises

In simple terms, the faster the wireless network speed, the more freedom users have to exchange information whether it be text, voice or video. With 3G the promise is a whopping 2Mbps. But 2Mbps is in fact, not the reality. According to Giga Information Group’s Brownlee Thomas, users can expect to reach about half to one third the theoretical network speeds.

“In the lab you get these wonderful speeds,” says Thomas, a research director for Giga in Montreal. “But, when you have a normally loaded cell, you get quite different speeds. It is really related to congestion. The other thing that is going to affect those speeds is how far away you are from the receiver that is mounted on the towers. The further away you are, the more power it is going to take from your handset.”

However, Thomas added that eventually users will be able to reach up to two-thirds of the promised speeds.

She added that users can also expect different speed rates from the two different network designs: code division multiple access (CDMA) and the global system for mobile communications (GSM). CDMA allocates bandwidth and uses code to differentiate between multiple transmissions carried simultaneously across a single radio frequency band. Bell Mobility and Telus Corp. are currently in the process of rolling out their respective CDMA 1xRTT (1x radio transmission technology), which is capable of transferring data at average speeds of 60Kbps to 80Kbps.

GSM, the standard for coding and transferring, digitalizes and compresses data as it is sent through the wireless spectrum. The next step in GSM networks is general packet radio service (GPRS), which sends packets of data across a wireless network at theoretical speeds of up to 114Kbps – real speeds of approximately 30Kbps, Thomas says. Microcell Solutions and Rogers AT&T Wireless have already completed their GSM/GPRS networks in Canada.

3G or not 3G?

Although the four Canadian incumbents are readying themselves for next-generation mobility, the current 2.5G networks are more than adequate, says Kevin Lo, technology and manufacturing analyst with Lightyear Capital in Calgary. According to Lo, the travesty of 3G is that many of the anticipated services are available now with 2.5G.

“If you look at the promises of 3G, the biggest promises were multimedia, or being able to look at streamed video on your phone or listen to MP3s,” he explains. “A lot of that stuff is consumer-based. Businesses do not want to be streaming video in real-time. They want real-time stock quotes; they want files, e-mail and maybe they want to be able to browse (the Internet) once in a while. When you look at 3G and everyone is scratching their heads saying, ‘Why is this not being rolled out?’, it is simply because a lot of the services that are required today are already on and already available.”

IDC Canada Ltd.’s Warren Chaisatien agrees that 2.5G networks provide enough speed to enable the applications that business need today, however, the Toronto-based senior analyst added that it is still an interim technology.

“People are still waiting for the real 3G,” he says. “It’s a Catch-22. Users would like faster speeds and would like more applications, but application developers are telling the service providers that the ball is in their court. They (are telling the carriers that) they have to roll out the networks faster. The carriers are saying that they have just invested heavily in 2.5G infrastructure, so they want to see that return first before they go on to the next step.”

That next step, he continued, needs to offer more applications aside from e-mail. He says that Canadian businesses can expect more useful business applications that connect to existing corporate applications like customer databases and ERP.

“This is going to be a sweet spot for mobile vendors,” he offers. “What you see today is the basic front-end applications like e-mail. But going forward in a few years time, the back office legacy applications and anything behind the firewall will get mobilized.”

However, the focus now is on getting networks covered by 2.5G, says Jeremy Depow, senior analyst with Kanata, Ont.-based The Yankee Group in Canada. Depow says the incumbents are looking to build up their respective subscriber base and build a business that is appealing to all businesses as a first step to securing enough revenue to push forward into 3G.

The Journey to 3G

Although as little as two years ago the mobile industry predicted that 3G would be upon us in no time, one thing the experts agree upon is that we will not be seeing it for quite some time – 2005, they say, is a safe bet. The reasons for the delay according to IDC’s Chaisatien are primarily to do with two large issues: security and cost.

“If you look at the pricing model out there, it is pretty hefty right now for Bell, Rogers and Telus,” he says. “It is very expensive and not really worth the money for the amount of information you are able to send and receive. With security I think it is a real concern especially among business users. People are very accustomed to transmitting information through a landline, and suddenly you are asking them to transmit (data) through thin air. I don’t think that the security problems have been sufficiently addressed at this time.”

However, according to Lightyear’s Lo, many companies are beefing up on their security both on the network side and on the physical side on taping into the wireless feed.

“If you look at a stream of data from something like CDMA, it is relatively hard to crack,” he says. “With stuff like 802.11, that is so much easier to crack because it is such an open standard and there is such an availability of equipment to tap into and decode those streams. The wide area networks are very difficult to crack.”

He says that in terms of cost being an inhibitor for wide-scale 2.5G and 3G adoption, the benefits are starting to outweigh the price tags. He says for example, current Research in Motion BlackBerry users can expect to pay approximately $50 per user per month to send and receive real-time e-mail and have Internet access.

“I think for businesses, if you have saved someone three hours of work, that $50 is paid for. Lets say that Bell or Telus or any carrier wanted to roll out 3G now. How could you justify rolling out a technology that will provide people with marginal improvement in speed, but maybe charge them three times more?”

Still, Chaisatien says that until carriers can provide better content and new business applications to subscribers, there will be very few early adopters.

“We will be playing around with these 2.5G devices for the next few years and then down the road we will reach the actual 3G point with speeds of 2Mbps,” concludes Depow. “With this data capability, the enterprise and business value comes in, for example having a laptop and using your handset as a modem. You will have the ability to have handsets with much more functionality in the applications you are using, but you need the high speeds to conduct business (wirelessly) effectively.”