3G wireless still holds promise

There's been a lot of talk in 2009 about the next generation of wireless technology, known as 4G wireless broadband, but the current generation of 3G wireless technology is far from dead.

For many wireless operators, especially those that have built their networks using the global standard GSM, the current 3G wireless technology called HSPA still has some legs left. And while many carriers are planning their 4G networks, hundreds of wireless providers throughout the world are also expected to upgrade existing network infrastructure with the latest versions of the 3G wireless technology to increase speeds and offer new services. And because these network speeds will match current 4G speeds, consumers will likely see no difference in capability. 

For this reason, the next few years will likely continue to be all about 3G technology. And 4G services, where they will be available, will likely appeal only to niche audiences.

"The average consumer doesn't care about peak data rates or network acronyms," said Dan Warren, the GSM Association's director of technology. "They just care about the experience. They want to be able to watch YouTube or get live traffic updates on their smartphones. And they don't care whether it's a new network or a current network that is being upgraded."

Mobile operators around the world are seeing a huge growth in the amount of mobile data traffic across their networks. This trend is expected to continue as more consumers buy smartphone and jump onto the mobile Web. By 2014, mobile devices are expected to send and receive more data in one month than in all of 2008.

Three-quarters of this traffic will be attributed to Internet access, while nearly all the rest will be due to music and video streaming, the GSM Association recently said. The new usage patterns will put strains on carrier networks, and operators are planning now to keep up with demand. Already, AT&T, which is the exclusive carrier for the iPhone in the U.S., is struggling to keep up with the heavy data usage.

While 4G networks will certainly increase network speeds and capacity, these networks and the devices that can be used on these networks will not be built overnight. This is why many carriers who are looking to meet demands today are turning toward advanced 3G upgrades.

T-Mobile USA, the smallest of the major U.S. wireless operators, has adopted this strategy. The company is currently upgrading its existing HSPA network, which launched just last year, to HSPA Plus, the most advanced 3G technology available. It has already started testing the new service in Philadelphia. And the company expects to deploy the lion's share of its upgrade across its entire footprint in 2010.

Meanwhile other operators, such as Verizon Wireless and Sprint Nextel are looking toward 4G technologies.

To the 4th power: WiMax vs. LTE
Two technologies dominate the 4G landscape: WiMax and LTE. In the WiMax corner is a company called Clearwire, which is backed by Sprint and Intel, as well as the nation's biggest cable operators, Comcast and Time Warner Cable. The company is currently building its network and has 13 cities up and running with service.

In the LTE corner is the rest of the wireless industry, including at least 50 mobile operators worldwide that have already committed to LTE plans, trials or deployments. The first LTE networks, including one being built by Verizon Wireless here in the U.S., are expected to be rolled out next year. NTT DoComo of Japan and TeliaSonera of Sweden have also committed to deploying LTE next year. That said, major network expansions aren't expected until at least 2011.

One of the problems that 4G carriers will face is that initially their networks will be islands of service. And it will take years for operators to blanket the country with their services. For example, Clearwire has mostly deployed its service in cities, such as Baltimore, Philadelphia, and Chicago. Verizon will likely do the same thing with its LTE network. And then the networks will spread from there. Verizon expects to launch 25 to 30 with 4G service in 2010.

Another problem 4G operators face is a dearth of new devices. Clearwire's WiMax service has been available for more than a year in some cities, and it still only offers USB modems, PC cards, subscriber modems and WiMax-enabled laptops. So far no one has started selling mobile devices, such as WiMax embedded phones. In fact, in January Nokia, one of the initial eco-system backers of WiMax, canceled its N810 WiMax Edition tablet. More devices aren't likely to be developed until the network is more extensive. Sprint is offering a dual-mode service that allows laptop users to switch between its 3G mobile broadband service and the 4G WiMax service, where it's available. But the service is only available for laptops.