The wireless sector is abuzz over “4G,” the next generation of mobile networks, but industry insiders and observers hold opposing opinions of the technology’s prospects.
4G picks up where 3G left off, with even faster data downloads for mobile technology users. Whereas 3G speeds can reach upwards of 600Kbps, 4G is capable of pumping data at 100Mbps.
That heady rate spells a host of new mobile applications, such as video conferencing and easy document sharing among two and more mobile users. For example, business colleagues might use their handsets to not only talk, but also to jointly consider blueprints or business plans sourced from a server back at the office and represented on tiny handheld screens.
4G is built on packet-switched infrastructure. Today’s wireless networks employ circuit switching, which is less efficient than packet. According to Andy Fuertes, an analyst with Visant Strategies Inc. in Long Island, N.Y., efficiency is important to wireless carriers. That’s why he figures 4G is bound to succeed. Compared with 3G, 4G is “more efficient, it’s less expensive, it’s data optimized,” he said, adding that carriers must squeeze savings from wireless infrastructure. 4G “has to improve price versus performance compared to 3G. It must be cheaper to deploy and operate.”
According to Stephen Howe, the Toronto-based vice-president of technology with Telus Mobility (a 3G wireless operator), packet substructure helps carriers keep costs down, which translates into improved service and lower prices on the end user’s side.
“Driving efficiency out of our networks is always helpful in lowering our operating and capital costs,” Howe said, adding that Telus Mobility is migrating towards a packet-switched architecture. “It’s something we’re always pushing for, so we can provide better service, cheaper, faster.”
But beyond efficiency, carriers also need a strong business case to deploy 4G – a reason to sink plenty of capital into packet-switching equipment. For some, this is where the argument for 4G falters.
Consider the state of 3G, said Mark Quigley, an analyst with The Yankee Group Canada, headquartered in Ottawa. Some carriers have found little reason to roll out the latest and greatest wireless technologies. Service providers still seek the ultimate application to entice users into to the 3G fold, let alone 4G.
“That’s certainly why most European countries have not gone about any 3G rollout yet, given all the money that was spent by folks like Deutsche Telekom to acquire 3G spectrum,” Quigley said, explaining that European operators dropped a bundle for 3G frequency licenses and struggle under that cost.
Even NTT DoCoMo, a Japanese carrier known for its gung-ho attitude towards new wireless technologies, has problems. The firm in Oct. 2002 proved during a lab test that 4G infrastructure could send data at 100Mbps. But its 3G network is still struggling to attract the attention of consumers and has fallen short of initial predictions. At the end of Sept. 2002, the carrier’s “Foma” 3G service had attracted 135,700 users – a far cry from the 1.38 million NTT DoCoMo hoped for by the end of 2002. The service provider recently admitted it would not be able to reach its goal.
According to Brian O’Shaughnessy, Bell Mobility’s vice-president of wireless technology in Toronto, NTT DoCoMo’s problem lies with its tech-first mindset. He said the Japanese carrier is too attached to the data rates that 3G and 4G afford.
“Our big beef with DoCoMo – and we’ve had discussions on the international stage about this – is they want to say 100Mbps, that’s what 4G has to be. But let’s take a step back. What are we trying to accomplish? Why is that number important?”
O’Shaughnessy, representing a 3G operator in Bell Mobility, said the user experience should be foremost in a carrier’s collective mind when it considers new technology. But since service providers “haven’t defined user requirements yet,” perhaps “it’s a little tough, and I think it’s a little soon” to discuss 4G.
Fuertes from Visant disagrees. He notes that some carriers might forego 3G altogether and skip straight from 2G or 2.5G to 4G. And he says 4G is closer than some suggest, pointing out that equipment vendors like Flarion Technologies, Broadstorm Telecommunications Inc. and Calgary’s Wi-LAN Inc. have on tap the technology required to make 4G a reality.
But O’Shaughnessy said the skip factor is nothing more than a red herring.
“Given that 4G doesn’t exist, what that means is they’re delaying the decision,” he said, explaining that the 3G skip is merely a service provider’s way of saying it won’t migrate to new infrastructure anytime soon; some say 4G isn’t due to arrive until 2010.
Howe from Telus Mobility said 4G has a future, even if it doesn’t have a business case just yet.
“If you can drive costs out of the network, then you can offer the services and features, on the revenue side, at a much lower price point. Then you’ll get the adoption.”
But he cautioned against the data rate hype, calling 100Mbps service “science fiction,” well beyond the more likely 4G speeds of 2 to 5Mbps.
Fuertes said 4G is on the horizon and represents a boon for users and carriers alike. Efficiency writes its own business case and spells a packet-switched future for wireless.
“The service, the rates the subscriber gets, that’s always a function of the economics of the operator,” he said. “If you give the operator better economics, they’ll translate that into a benefit for the subscriber.”