802.11 vs. 3G

Once upon a time, you could hardly open a business magazine without finding a feature that praised third generation (AKA 3G) (define) wireless telephony as the answer to mobile Internet needs. That was venture capital then. This is fiscally strapped now.

In theory, 3G wireless networks are capable of throughput up to 384Kbps, which still puts them at the bottom end of 802.11b's range. In practice, though, 3G isn't available in the United States at all except in experimental deployments.

Instead, we have telecomms using the "3G" name for what's actually, at best, 2.5G. This is a middle step between what we currently have, 2G, basic digital service, and the science fiction speeds of 3G. With 2.5G networks, you can transfer data at rates of up to 114Kbps generally using General Packet Radio Service (GPRS) (define).

So how good is GPRS, really? David Ferris, CEO and analyst for Ferris Research, has "been testing out GPRS connections with mobile phones in major metropolitan areas in the UK and US. These are now being brought on-stream by a wide variety of mobile carriers. In a nutshell, GPRS provides an always-on connection to the Internet. To be precise, GPRS enables per-handset data rates of 9.05-107.2 Kbit/sec depending upon the coding scheme employed and time slots (from 1-8) allocated to a data packet. In practice, we're finding that transfer speeds of 400 to 1000 bytes/sec are the norm."

Translated, what this means is that 2.5G is is in no way competition for 802.11 for moving data. As Ferris explains, performance like this "means that communications need to be kept short, and that, in turn, means most of them will be text-based. E-mails with attachments will usually take much too long to transfer."

Still, he thinks, that "applications like instant messaging, or distributing appointment information, can be run successfully." However, instant messaging or Web browsing on 2.5G or 3G phones isn't what 802.11-enabled laptops users think of as IM or the Web.

On digital phones you must use Short Messaging Service (SMS) (define) or Multimedia Messaging Service (MMS) (define). Without a special gateway between the SMS/MMS servers and consumer IM clients like AOL Instant Messenger (AIM), or business-class IM clients such as Lotus Sametime or NetLert, you can't send messages from IM to someone using MMS or SMS on a digital phone.

On the Web side, for a Web page to be viewed effectively on a digital phone, the signal must be sent in Wireless Application Protocol (WAP) (define) and the page should be written, not in the usual HyperText Makrup Language (HTML) (define) used for most Web pages , but in Wireless Markup Language (WML) (define). In short, viewing Web pages with on 2.5G and 3G is inherently more problematic.

3G is also much more troublesome for telecom carriers to install. To deploy it you must overhaul your wireless infrastructure and replace it. Of course, you must do the same thing with 802.11 hotspots, but while hotspots have far less range, a business class hotspot with advanced antennas also can be deployed for about $1500, while all but the smallest (pico range) 3G base stations start around six figures and move up from there. Anyone can set up a hotspot; only a telephone carrier or corporation can afford 3G base station.

Expert Opinion
What do the analysts think? It depends. Everyone acknowledges that there was a 22% decline in wireless and mobile network infrastructure spending in 2002. Research house IDC, for one, in its Worldwide Wireless and Mobile Network Infrastructure Forecast and Analysis, 2002-2007 study, says that the demand for 2.5 and 3G remains strong. Indeed, IDC expects annual spending on 2.5 and 3G network infrastructure to grow from $38.3 billion in 2002 to nearly $49 billion in 2007. Wireless phone infrastructure providers like Ericsson, Nokia, and Nortel no doubt hope that IDC is right.

"The essential rationale for deployment of 3G networks -- gaining spectrum efficiencies, easing network capacity constraints, lowering operating costs, and expanding revenue opportunities through provisioning of data services -- remains intact," says Dr. Shiv K. Bakhshi, research manager for the IDC's Wireless and Mobile Network Infrastructure program. He believes that the rising popularity of MMS and picture messaging will "legitimize the culture of data consumption in a mobile environment and spur deployment of network infrastructure." But, he notes, it's not just 3G driving these developments; "public WLANs and hotspots" will also help in this development.

"The WLAN industry will continue to experience stellar growth as deployments in several key markets take place," predicts Allied Business Intelligence (ABI) analyst John W. Chang, senior analyst, and some of that growth will come at 3G's expense.

ABI reports in its Worldwide Deployments, Drivers, Players and Forecasts for 802.11x, that "Some of the leading wireless carriers worldwide, including T-Mobile, AT&T, and Verizon, have made announcements of deploying WLAN services as their 3G plans are delayed. WLAN is easier to install and costs far less than setting up a 3G network. In addition, 3G's data rate of 144 kbps, a portable data rate of 384 kbps, and an in-building fixed rate of 2 Mbps are slow, compared to that of WLAN. As WLAN moves toward 54 Mbps, it is apparent that 3G cannot compete with the data rate of WLAN. Though 3G will be deployed worldwide due to its voice capacity benefits, telecom carriers are seeing WLAN hotspots as the immediate revenue generator for data services."

This view is not just that of an analyst looking at plans. On January 29, British Telecomm (BT) announced that it would be deploying 802.11b--and 802.11a soon--hotspots with three business partners. BT plans to have 4,000 hotspots in place by the summer of 2005.

According to David Hughes, BT director of mobility, its BT Openzone hotspot customers will pay 10% of the price to download 1MB of data compared to a 3G user at four times the speed. In short, he declares, "At the moment, it looks like Wi-Fi is one-tenth of the price of 3G, and four times as fast." Even with 3G's much better range, which would you rather have?

Some analysts, like ABI's director of automotive electronics Frank Viquez, think that, "802.11 promises to have the most potential, given its minimum raw bandwidth of 10 Mbps and dramatic growth outside the vehicle industry," even when a wireless data user is traveling at speed.

Can the two technologies get along? Some experts think they can, but given the stalled economy and 802.11's lower price, deployment costs alone may cause 3G to flounder. Who knows? Instead of 3G laptops in 2007, perhaps we'll have 802.11 mobile phones.