The telecommunications industry has talked about third-generation (3G) mobile phones for years. If the early hype had turned out to be true, then by this time we should have megabit-plus data services on our wireless phone networks. It hasn’t happened.

While mobile data is becoming widely available,

it’s still not clear whether anyone needs more than what today’s services provide.

Current services fall into two categories. There are the 802.11, or Wi-Fi, hotspot services offering theoretical throughput of 11 megabits per second (Mbps) in high-traffic areas such as airports, hotels and coffee shops.

Then there are the data services on the digital cellular networks. These are a bit faster than dial-up modems but not really worthy of the designation broadband, and observers prefer to call them 2.5G, rather than 3G services.

Canada’s incumbent carriers, including Telus and Bell Canada, offer a service called CDMA 2000 IXRTT. This can carry data at up to 150 Kbps, but typical performance is more like 100 Kbps, says Brian O’Shaughnessy, vice-president of wireless technology at Bell Mobility. The larger carriers offer 1X almost everywhere cellular service reaches. MTS plans to reach 95 per cent of Manitoba’s population by year-end, and Aliant’s service covers larger cities and principal travel corridors in Atlantic Canada.

Montreal-based Microcell Telecommunications Inc. and Toronto-based Rogers AT&T Wireless both offer a similar service, General Packet Radio Service (GPRS). It has a theoretical top speed of 115 Kbps, according to David Neale, vice-president of new product development at Rogers AT&T, but in real-world use usually delivers speeds in the 50 Kbps range.

Carriers generally charge for these services by the amount of data carried. Prices start around $10 per megabyte with discounts for volume.

Dial-up modems theoretically deliver 56 Kbps but are slower in most circumstances. Todd Mathers, director of Toronto-based Noisy River Software, says the 1X service he uses appears about as fast as dial-up.

Though 1X offers greater bandwidth, the GPRS carriers claim an advantage in the worldwide acceptance of their technology. GPRS is an evolution of the Global System for Mobile (GSM) technology, widely used in Europe and the Far East. “”It’s used right around the world,”” says Peter Kobzar, Microcell’s director network services. “”It has ubiquitous penetration in Europe.””

1X is built on the Code Division Multiple Access (CDMA) cellular standard, which is used mainly in North America. World travelers thus may prefer GPRS.

The GPRS camp also has a faster standard waiting in the wings. Enhanced Data rates for GPRS Evolution (EDGE) will offer throughput comparable to that of 1X at 80 to 130 Kbps according to an industry association promoting high-speed wireless standards.

Microcell is looking at EDGE, Kobzar says, but “”we don’t have a time frame.””

Neale says Rogers is also studying the faster technology.

“”I think it’s quite possible that an EDGE overlay will exist fairly soon,”” he adds.

Beyond EDGE, the GSM roadmap leads to Wideband CDMA, or W-CDMA — a confusing name because CDMA is also the umbrella term for the other camp of standards that includes 1X. Initial W-CDMA implementations will offer 384-Kbps bandwidth, says Allen Nogee, principal analyst for wireless communications technology at In-Stat MDR, a Scottsdale, Ariz.-based research firm. Ultimately, W-CDMA promises speeds of up to 2.4 Mbps.

The successors to 1X, meanwhile, are CDMA 2000 1X EV-DO and EV-DV, promising speeds of 2.4 Mbps and 3 to 5 Mbps respectively.

None of these can match IEEE 802.11b, with a theoretical throughput of 11 Mbps and real-world performance of up to 9 Mbps.

Wi-Fi hotspots are now available in a number of public places. Pricing varies, but $10 for 24 hours of unlimited access is a fairly common offering.

Where available, hotspots have a speed advantage. However, says O’Shaughnessy, hotspots only serve limited areas. Wi-Fi has a range of about 100 metres.

“”It is not intended to give service across 90 per cent of a city,”” O’Shaughnessy says. At present too, using hotspots operated by different service providers means paying multiple bills — though industry observers say roaming agreements like those among cellular operators will come.

Wi-Fi also won’t maintain a connection with a moving vehicle, whereas the cellular-based systems can. “”The two are very much complementary,”” Kobzar says.

BANKS INTERESTED IN WIRELESS POINT-OF-SALE SYSTEMS

Of course, road warriors will want to have the best of both worlds by connecting at higher speeds through hotspots where possible but reverting to cellular elsewhere. Devices that will let users make the switch are beginning to appear, though they are not easy to find today.

“”I expect you will see increasing numbers of dual-mode devices that use 802.11 on campus and GPRS elsewhere,”” Neale says.

Those could be accompanied by billing agreements that let travelers pay for hotspot access through their cellular carriers. U.S. carrier Verizon Inc. has already created such an option, Neale notes. Paul Pothier, director of business marketing for Aliant Mobility in Halifax, says his company sees potential in offering a package of 1X service and access to hotspots operated either by Aliant or by partners.

Two major selling points are ubiquitous e-mail service, and access to corporate applications.

“”What’s interesting is being able to use those applications wherever you may be,”” says Kobzar.

Pearson says there is no single killer application.

“”The people that are signing up for the wireless data services are using things like e-mail or extending the corporate data network,”” Pearson says.

Mathers says the 1X adapter in his notebook computer gives him ready access to his e-mail and to files on his office computer, letting him respond to clients quickly even though he spends most of his time outside the office.

Extending access to e-mail and applications is essentially what wireless data is about. But in some specific businesses, data services open up possibilities that would not have been practical before. For instance, O’Shaughnessy says, banks are showing interest in using 2.5G services to offer wireless access to the Interac system, so bank cards can be used for point-of-sale payments where wired connections aren’t available. That could mean merchants at flea markets, cab drivers and delivery people could accept payments using Interac.

CARRIERS IN NO HURRY TO INVEST IN 3G

Pothier adds that some businesses are combining 1X modems with Global Positioning System (GPS) transceivers to let them track vehicles and mobile assets.

Kobzar says some Microcell customers use GPRS handsets with integrated digital cameras to transmit photographs. This capability is useful to real-estate agents, who can also check listing information from their cars.

Sending photos may also be one key to an emerging consumer market for broadband wireless services. And Neale says the biggest uses of Rogers’ GPRS service today are downloading ring tones and Java-based games.

GPRS and 1X can also support short message service, which allows users to send each other brief text messages, and that is getting more and more attention, Pearson says.

While existing 2.5G services have a number of uses, it’s difficult so far to find applications that are begging for more bandwidth than these services can provide. So the jury is still out on the future of the true 3G cellular technologies.

“”It’s pretty clear that the market at this point in time simply does not need the throughput that 3G will provide,”” Kobzar says. Since deploying 3G will be costly, he is uncertain when or whether carriers will decide to offer it.

Chris Landon, director of product marketing for Telus, says the carriers are in no hurry to invest in 3G networks until they have recouped their investment in 2.5G.

“”People want to see a return on investment on the existing network before going down a road where 3G potentially takes over,”” he says. And Neale says investing in faster networks makes little sense until there are devices that can take advantage of them.

The lack of applications demanding higher speed may not be an insurmountable obstacle for 3G, though. Pearson argues that once people get used to today’s 2.5G services and develop the habit of using their mobile phones for remote data access, they will start wanting the services to work faster.

That would be especially true with streaming video, which is possible at 1X and GPRS speeds but “”the experience is not that good,”” Pearson says.

Pothier suggests true multimedia applications might provide the impetus for faster services eventually, or they may come simply because users get used to mobile data services and want them to work faster and faster. “”We’ll probably see it some day,”” says Nogee. “”It’s all a matter of how long.””

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