3G or not 3G?

To Iain Grant of the technology consulting firm SeaBoard Group, the selling point of 3G is not so much speed as what that speed can do.

“”What’s important to the user is how make life better so he’ll open his wallet more,”” says the managing director of the Brockville, Ont.-based company.

“”One of the ways to do that is speed. A better way to do that is through applications.””

Indeed, a third generation (3G) network without applications is like an eight-lane freeway without cars: full of potential, but functionally useless.

Bell Canada‘s director of wireless marketing agrees. Jennifer Bromley says Bell’s new 1XRTT is technically a 3G network because it has surpassed the minimum speed requirement of 144 kilobits per second. Bell is currently offering a few 1X network-ready applications, Sierra’s Wireless AirCard and Motivus’ Mobile Desktop Enterprise, but she says the network won’t come in to its own without greater participation from the folks who make 3G devices and applications.

“”The network is in place, so we’re dependent on device and application providers that take advantage of the speed,”” she says.

But whether Bell’s 1XRTT or the competing 1X network from Telus Mobility really qualify as 3G is still a matter of debate. Bell’s 144 kbps results came during a lab test. “”Which means you wouldn’t notice the difference (of the increased speed) in the real world,”” Grant says.

Peter Barnes, president and CEO of the Canadian Wireless Telecommunications Association, predicts we will see activation and allocation of new spectrum for 3G either next year or in 2004, which will pave the way for true 3G networks and applications.

Grant says carriers are currently providing some of the functionality promised by 3G, but suggests that widespread deployments will be limited by cash flow. He says the ISDN phone line that seven years ago delivered 128 kbps now delivers three megabytes per second for $40 a month. “”To get three megabytes on your landline six years ago would have cost you $4,000 a month,”” he says. But he doubts that process will be repeated in the wireless space because of high entry costs, the product of government taxes and spectrum auctions.

“”(Telecommunications companies) have to invest an incredible amount of money to make things work,”” he says. “”The entry cost is so high that it’s restricting the ability of telecoms to deploy. And when they do deploy, they have to charge a fortune for it.

“”I think the biggest obstacle is economics, not the technology, not the spectrum.””

Some costs could be defrayed through new technology. For example, PMC-Sierra’s Digital Wavefront Processor can double the energy of base station amplifiers, which will need to become even more plentiful with wider adoption of 3G, according Laurie Wallace, the company’s director of strategic marketing.

Barnes says getting the right piece of spectrum will help solve the cost issue, as shared spectrum across the Americas would provide economies of scale, in both handset production and network development, and enable usability from Canada to Chile.

But he says the favoured piece of spectrum is currently controlled by the United States Defense Department, which is less willing to relinquish it post-Sept. 11. Grant agrees this “”X-band”” is desirable, because it can carry a lot of data but is not high enough on the spectrum to encounter interference with water. Still, he doubts the appeal of consistent usability across the Americas.

“”For most people, we don’t care if we can use the same phone in Toronto as we do in Peru,”” he says. “”We can’t even use the same hairdryers.””

Bromley says Bell is content with its current spectrum allocation and is not overly concerned with the fees it is charging customers for 1X service. All Bell’s cellular phones will be 1X-ready by the end of this year, including one already available for $129, she says, adding business customers — the initial target market — are happy with the decision to charge by download quantity rather than airtime.

Beyond business, she predicts a large youth market for high-speed services like screen-savers and games.

“”I think that’s an area where we’re going to see an explosion,”” she says.

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