What's the rush? Operators cautiously navigate choppy 3G waters

Telecommunications Americas, March, 2003 by Sean Buckley

In a perfect world, navigating a path to a full-blown 3G wireless network would be as simple as paddling hard in one direction. But with a lack of customer demand for services and constrained capex, wireless carriers for the most part seem to be treading water when it comes to rolling out 3G-capable networks. The 3G of the past was all hype and hoopla: how much data could be carried and how quickly. Today it's all about building a foundation to deliver revenue generating services.

"What 3G is comes down to a war of words, and the data speeds [some of the carriers have] touted are not realistic anyway," said Jane Zweig, CEO of the Shosteck Group. "Whether something is 3G or not is not the issue, rather it's is there something interesting for people to do with devices."

While operators are following the Boy Scouts motto of "be prepared" by making their paths flexible enough to move with customer demand, they're also grounding themselves in the here and now. Carriers are seeing some immediate opportunities with enterprise services such as SMS (short messaging service) and mobile VPN access. On the consumer side, the buzz is about downloading games and music, and taking and sending photos using picture phones.

In plotting their 3G wireless courses, operators for the most part aren't straying from the technology path they've already chosen for their 2G networks (see Figure 1). On the CDMA path, Sprint PCS and Verizon Wireless have completed their migrations to 1XRTT, a technology that not only provides enhanced voice, but peak data transmission rates of up to 144 kbps. On the TDMA side, AT&T Wireless and Cingular, both of which are currently building GSM overlay networks, are finding a strong customer base for applications using 2.5G GPRS (General Packet Radio Service). Traditional GSM carriers such as T-Mobile are following the same GSM upgrade path to GPRS and beyond.

CDMA Catches a Wave

For CDMA and the migration to 1XRTT, the race in the United States is on between Sprint PCS and Verizon Wireless. Last February, Verizon launched its nationwide CDMA 1XRTT Express network. During Q4 it gained more than 970,000 additional customers. Verizon's Get it Now initiative enables consumers to download games and send instant messages. On the business side, Verizon has developed plans that allow users to check corporate e-mail and access VPN-like services. In addition, Verizon launched a Wi-Fi service in its Boston network in 2002 to complement its enterprise service offerings, but has been mum on future Wi-Fi plans.

Sprint PCS, which in September 2002 launched its nationwide PCS Vision network, has a two-pronged offering. On the consumer side, Sprint offers a number of applications over Vision-enabled phones such as games, ring tones, pictures and web access. For business customers, PCS Business Connection Enterprise Edition can integrate with existing Microsoft Exchange and Lotus servers to provide access to e-mail, calendar, contacts and tasks. Since most businesses have operatives in the field and air, the offering also includes travel services and CRM (customer relationship management) offerings. PCS has not formally announced a Wi-Fi strategy.

In Canada, TELUS Mobility and Bell Mobility also are moving slowly but steadily. For Bell Mobility, the notion of 3G wireless is three-fold: capacity, speed and services. Bell Mobility's 1XRTT network has been deployed over its existing Nortel Networks base stations. And while Bell Mobility sees high-speed 3G consumer services in the future, the focus right now is on vertical markets.

"Forget about all of the fancy consumer services because there's a huge pent-up demand for companies like Otis Elevator to untether their sales forces with mobile data dispatch capabilities to place orders," says Brian O'Shaughnessey, Bell Mobility's vice president of wireless technology. "That's the mundane part of 3G. It's not what everyone has talked about for the past few years, but it's the real here-and-now business."

The next step in the CDMA evolution path is shaping up to be EVDO (evolution for data only), which offers data speeds up to 2.4 Mbps while leveraging existing PDSN (packet data serving node) and AAA (authentication, authorization and accounting) servers, but requires the addition of an RNC (radio network controller).

This path is mostly advancing in Asia, with carriers such as Korea Telecom and KT Freetel, but is also in small pockets in the United States. Washington-based Monet Mobile Networks has launched a commercially available EVDO network data service utilizing LG Electronics' core infrastructure. Working in the 1.9 GHz band, Monet Mobile's EVDO network in Duluth, Minn., offers customers 2 Mbps mobile broadband service for a flat rate. Following this initial rollout, Monet, which launched one of the first 1XRTT networks in 2001, migrated its other 1X networks in South Dakota, North Dakota and Minnesota to EVDO last November.

However, major North American carriers are not making any sudden moves. While Verizon Wireless is engaged in two EVDO trials utilizing Lucent and Chelmsford, Mass.-based Airvana EVDO-enabled base stations via an agreement with Nortel, it has not committed to any plans for a nationwide rollout of the service. Sprint PCS, which predicts it may roll out its EVDV (evolution for data and voice) network in the 2004-2005 timeframe, has not publicly announced any EVDO plans. The EVDV network, the next step in the GDMA migration path, offers data rates up to 3 Mbps as well as enhanced voice services.