Unrelated to the technology itself is the sour economy. Even beforethe terrorist attacks, economic concerns were forcing executives tothink more practically about technology spending, and wireless was noexception. "We saw a significant 'sobering up' take place in latespring 2001 of questioning where the business value is in 3G and whatservices would generate the needed return on investment," saysLeif-Olof Wallin, an analyst at Meta Group in Gothenburg,Sweden.

In addition, the Sept. 11 attacks drove home the overwhelmingimportance of communication without the frills. Executives are nowconcerned with networks robust enough to handle more calls in peakperiods and more basic services like simple text messaging.

The U.S. telecommunications industry itself has also closely followedthe deepening debt of the large European wireless carriers, whichagreed in 2000 to spend a combined $150 billion on licenses to provide3G services. In light of their financial woes, European wirelesscompanies have been trying to find ways to free themselves from someof the license obligations to which they've committed.

Even in Japan, where cell phones are prevalent and widely adopted,consumers are approaching the service with caution because thehandsets have proven to be pricey and difficult to work with, saysWallin. Third-generation wireless has been available in Tokyo sinceOctober 2001, and more recently in Osaka and Nagoya; and NTTDoCoMo--Japan's dominant wireless carrier--plans to spend $8 billionto extend the existing service to most of the country within the nextthree years, adds Wallin.

By contrast, wireless carriers in the United States, such as VerizonWireless and AT&T Wireless Services, have taken their spectrumsquabbles with the federal government to the U.S. courts, which willdecide how to parcel out additional airwaves.