The mobile industry has …

signed up so many new users that it is getting overloaded, with customers reporting dropped calls and busy networks. It needs money to invest, but is boxed in by broader industry travails. Many [carriers] are owned by telephone companies like Bell South and Deutsche Telekom, which are heavily in debt and can’t get a hearing from bankers themselves. In the event, Associate Professor Andrew Campbell, at Columbia’s Fu Foundation School of Engineering, predicts, “3G technologies will have a niche market in the short term-without the penetration previously thought.

In the end the technology will be superseded by 4G technology, whatever that proves to be-but nothing revolutionary.More than likely, it will capitalize on legacy apps like Wi-Fi-something we have now and that we know works in small-scale, mostly enterprise networks. “There’s been lots of discussion of Wi-Fi as a disruptive technology to 3G [not to mention satellite radio! ed.

]; but at the same time you’ll notice, if you were speaking to cellular vendors a year ago, that they were talking about coexistence,118 now they’re fighting for their lives in terms of the investment they made in 3G.”Some say wireless carriers like mmO2, Sprint, and T-Mobile are in “the perfect position to offer both wireless services, combine the billing and customer service, and walk away with a more effective, if less elegant, solution to providing wireless data-while maintaining their death grip on customers.”120 That’s because cellular operators have a huge headstart in terms of roaming (a prerequisite to seamless service)-the crux, too, of T-Mobile’s new European alliance, supra121–and because Wi-Fi’s perceived threat to 3G will be fully realized only when “coupled with existing 2.5G technologies such as GPRS,” making it fast enough to be useful.122With other wireless carriers “kicking themselves, wishing they had known about wi-fi before they spent [$150b] on 3G spectrum,”123 T-Mobile International made waves last year with the announcement that the group’s WiFi Hotspots124 would be the top rung of its data services model (as opposed to UMTS).125 Partners in “the world’s largest wireless broadband network,” T-Mobile and Intel Corp.

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have equipped Hotspots in 60% of all Starbucks, 600 Borders Books stores and a couple hundred McDonald’s, each with a T-1 line (to the operating tune of ~$1,000/month).(N.B. Texas Instruments envisions data services carried by WLAN for the time being, but beginning next year, they say, both voice and data will switch to 802.

11.127) T-Mobile currently faces a second-to-market commercial entry in the debutante wireless consortium Cometa-backed by T-Mobile’s moonlighting Hotspots partner Intel, AT&T Wireless and IBM, with additional funding from Apax PartnersFN (one of the private-equity/buy-out firms gobbling up European telecoms’ non-core cast-offs at bargain-basement prices, supra).Intel (like Microsoft) is new to the mobile phone business, which it has identified as a growth market compared to the stagnant PC industry.128 Known as the world’s leading chipmaker, Intel has aggressively “stepped up its campaign to ‘unwire’ the Internet with a series of deals and investments in a bid to boost its [Wi-Fi] technology,”129 now poised-as a Wi-Fi hardware company-to make real money, come the revolution.Equipment will fly off the shelves when carriers belly up to the wi-fi bar.130 That means base stations and spectrum will become less important-sorry Ericsson,131 looks like more trouble ahead-and 802.11 semiconductors, wi-fi service providers, and good old-fashioned T-1 lines, which carry the data from the wi-fi base unit to the Internet, will become more important. “In the mid term, then,” Andrew Campbell prognosticates, “most of the wireless Internet will take place on the WLAN in the cities.

Those operators and providers looking into wide-area coverage and problems outside of the metropolitan area have lots of technological areas of coexistence to solve. Like other technologies, it’s suboptimal; so you find lots of engineering startups working on those problems.133 How carriers get money out of it is another story; but once service plans are in place at reasonable rates, it will mushroom.”One wonders, then, whether the cautious, risk-averse and meticulous Mr. Ricke is in this market for the long haul. Of the 22 million customers who pass through Starbucks’ front doors every week in the States, only about 25,000 (of some 168,000 weekly WLAN consumers nationwide) are using Hotspots services.

I don’t know the sunk costs, but T-Mobile refers to its ambitious undertaking as a work in progress, and recently slashed the price for curious Wi-Fi users from a minute.Critics say the margins are too thin to ever represent much business opportunity for the carriers, to wit: while Starbucks is making money from the increased custom using T-Mobile’s Ethernet, Apple’s giving the service away at its retail stores in hopes of attracting early adopters (those most-likely-to spend more on other technology). At the same time, “wireless guerrillas” are devising ingenious economic models for ‘free’ public networks.135 Small wonder technology analyst Amy Craven says, “I don’t see any of the providers being profitable right now. That’s not to say they won’t be.”One elegant dual-mode patch for incompatible standards, software-defined radio, will surely hit the equipment market quickly, because it offers high margins and-conceptually-it isn’t much different from popping in a few new circuit boards, only easier.

In the case of wireless, you just download a new phone. “Advances in A/D converters, RF technology and processing hardware have allowed SDR to finally achieve viability”137-enabling the switch between wireless standards, just as it can facilitate the upgrade from 2G to 3G.For Texas Instruments, “SDR is all about looking at a technical problem from the software perspective.

‘TI’s thrust is on SDR-like concepts in the combo-IP area. GSP + Bluetooth solutions are already set for roll out and the GPRS + WLAN (802.11b) is on the horizon, TI’s business development manager, Jithu Niruthambath, said in mid-2002.138 Five months later, Yoram Solomon, director of business development for the company’s wireless networking business unit, declaimed, “We’re going to be the first one coming out with a pure software-defined radio for wireless LAN.”As with “spread spectrum” and “wideband” technologies, “software-defined radio” is freighted with “explosive implications,” in the words of Howard Rheingold, author of “Smart Mobs: The next social revolution.” “SDR is radically disruptive! Of course, you’ll have to regulate devices so that they ‘play nice’ and don’t flood the resources. But if the spectrum ceases to be a scarce resource because each broadcaster or transmitter can use any available bandwidth in a cooperative fashion, then the government doesn’t need to regulate its use based on 1920’s technology.

The neighborhood wireless activists are up against powerful financial interests and political powers-that-be, from AT&T to the FCC. But they have Moore’s, Metcalfe’s, and Reed’s laws in their corner.”In the long run, as Professor Campbell foresees it, “not only will better radio technology supersede Wi-Fi, but the FCC will provide more unlicensed bandwidth for operators to provide more advanced services, maybe in the next five or six years. Probably in parallel with that will be higher speed and better physical layer radios. 4G radios will all be able to carry IP packets directly on the physical layer in a seamless way. Cellular radios don’t do that-a major limitation of 3G.

Just as railroad tracks were not designed to carry cars, 3G operators are trying to use packets on a cellular system. It won’t work.””And if there’s an overriding reason to switch to packet,” Telecommunications editor Sean Buckley expounds, “it’s the services, stupid. Legacy TDM switches simply can’t support new services. Knowing that the PSTN will be around for years to come, a move to packet will be done on a migratory basis that leverages the best of the legacy and next-gen worlds.”141 IP-based cellular systems could be deployed-at lower cost and/or with higher performance standards than 3G handsets-by the middle of this year, according to another Visant study.