Quelle: Darwin
IN THE BEGINNING, there was the analog cell phone. And it was good.And then the cell phone went digital. And that was even better,providing a clearer connection and more reliability. And better begata craving throughout the wired land for a handheld so powerful itcould handle voice, data, audio and video.
If you credit the rosiest vision, the future of technology appears tobe in the hands of the mobile phone industry. Cell phones andhandhelds are everywhere. Promises of "always on" pervade the land.The future is now, and it's wireless.
Except the future is still the future.
Let's face it: Wireless technology is relatively young. The firstgeneration has been around only since the early 1980s, when analogvoice transmission networks were introduced. The second generationtook over in the mid-'90s with the advent of digital wireless voiceand data networks, giving us the capabilities that spawned the cellphone revolution we know today. Yet, as remarkable as the technologyis, there's still plenty of room for improvement in the roamingcapabilities and sound quality of cellular transmission.
Enter the so-called third generation--or 3G--which generally refers tonetworks capable of connecting to the Internet at speeds 40 times therate of today's cell phones. This level of service promises Internetconnections fast enough to download streaming audio and video files,swap digital photos, and hold teleconferences. It also uses theexisting spectrum space more efficiently and increases the speeds withwhich basic data can be transmitted over wireless devices.
While leading wireless advocates concede that 3G technology in theUnited States is not ready yet, they remain optimistic about itsfuture. "A 3G wireless device will become a portal to the office,"says Liz Altman, vice president and director of business developmentin Motorola's Personal Communications Sector in Libertyville, Ill."With all of 3G's amazing abilities, being out of the office willbecome less of a perceived handicap."
Why 3G is going nowhere, fast
So why the delay in moving toward the new world of wireless? To beginwith, the telecommunications industry hasn't been immune to theslumping economy. Motorola, in particular, laid off about a quarter ofits workforce by the end of 2001 in an attempt to get back in theblack in 2002.
Another major obstacle is a shortage of available spectrum--theairwaves that carry the calls and messages. Much of the availablespectrum has been allocated to the U.S. Department of Defense, whichisn't willing to part with it. Prior to Sept. 11, the FederalCommunications Commission had been negotiating for spectrum, but thosenegotiations are no longer a priority for the Defense Department. Inaddition, carriers and vendors alike need to commit billions ofdollars to licensing fees for the spectrum space and investments inhardware for the new technology. Finally, although most people areimpressed when they see the fancy handheld devices associated with 3Gservices, they blanch at the prices, which are predicted initially tocost 50 percent to 80 percent more than current cell phones.
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.
2.5G Will take You there
Vendors in the United States recognize that 3G will not be ready formass consumption anytime soon. As a result, carriers such as AT&TWireless are beginning to offer 2.5G services--so named because theyoffer speeds that fall between 2G and 3G. At 2.5G, wireless users cantransmit text at fast speeds--up to 114Kbps, which technically puts itat the low end of 3G's capabilities. So some service providers haveopted to repackage their 2.5G offerings as 3G, blurring the linesbetween the two.
"You will get all the business benefits you need by embracing 2.5G,"says Wallin. "It's always on, it's dependable, and it gives you justabout the same bandwidth that you can get from 3G." Motorola's Altmanadmits that 2.5G is a more realistic aim for the United States in thenear term. "It is building the foundation for 3G," she says, "so thatby 2005, more than 60 percent of wireless devices in use will be 2.5G-or 3G-enabled."
Sprint PCS Group, however, claims it is ready to surge into the 3Gmarketspace. The carrier promises nationwide 3G availability bymidyear, according to Jason Guesman, director of business marketing,who's located at company headquarters in Overland Park, Kan. Sprintpurchased spectrum space in 1996 at what Guesman callsbargain-basement prices. It paid $3.4 billion--roughly one-third ofwhat it would cost today. Boasting a first-to-market advantage, Sprintclaims it is well positioned to provide customers with speeds of up to114Kbps--technically the low end of 3G's threshold. And because Sprintalready has its network in place, it says its customers can readilyupgrade from 2G to 3G simply by buying a new handhelddevice.
That said, when negotiating with vendors for wireless services, it'ssafer to speak in terms of bandwidth rather than generations, so thatyou can be sure you're speaking the same language and purchasing atechnology that your company truly needs.
The truth is, most business data doesn't need the full-motion videoprovided by 3G. Generally, the goal is to transmit text data toemployees who are attempting to keep in touch with the office whiletraveling or working from home. "Today's killer app is voice," saysAndy Bezaitis, founder and CEO of Cambia Networks in Rosemont, Ill., aprovider of wireless data-networking equipment for wireless carriersand network service providers. "The CEO should concentrate on wirelessLAN in the office and on the road, and should provide secure access todata within the enterprise."
"It's a myth that current networks aren't good enough to adequatelysupport the needs of your business," says Erik Lassila, a managingdirector with Clearstone Venture Partners, a VC firm in Menlo Park,Calif. "Businesses should focus their technology investments in thearea of wireless data transmission," not streaming videocapabilities.
Before succumbing to the hype that surrounds 3G, focus on mobileapplications that can help your company gain customer loyalty. Assesshow important it is for your business to access accurate inventorydata, sales objectives and product details from anywhere viaWeb-connected cell phones and PDAs. Look only at those wirelesssystems that can enhance your company's business processes and showimmediate payback.
It's true that mobile computing will help employees work smarter andmore efficiently. But companies must be cautious in how they roll outwireless services and take the time to factor in the ROI beforechasing the next big technology.
In other words, don't pitch that cell phone just yet. Focus instead onthe demands of your individual company.