Study: 3G Vendors Face Failure

date: 18th January 2001, source: internetnews.com

Third generation (3G) wireless systems could easily become commercial failures if operators focus on so-called killer applications such as multimedia, a new study released Wednesday by consultants Herschel Shosteck Associates claims.

"The relentlessly cited 3G future - 'full motion video' and 'multimedia' - is irrelevant," said Dr. Herschel Shosteck of the consulting firm. "The concept of the killer application is flawed and its pursuit is detrimental to the industry."

Instead, operators should focus on delivering the basics, the study said. It predicts that initial 3G profits will come not from applications like multimedia but by operators providing fast, low-cost Internet access for existing low-bandwidth applications.

The study claims the infrastructure costs for delivering the type of ubiquitous high bandwidth for applications such as multimedia will be too high for wireless operators.

"By distracting attention from the ultimate end-goal, the attention paid to full-motion video and multimedia becomes pernicious," Shosteck said. "Recognizing this is crucial."

Even if operators pay for such bandwidth, the resulting costs to consumers will be too high for widespread acceptance, the study said.

Jane Zweig, executive vice president for the firm, adds that one problem is that the wireless infrastructure industry and the Internet industry don't fully understand each other.

"Because of the disconnects between the (wireless) and IP worlds, the IP world is developing advanced RF applications and services which cannot succeed on early 3G systems, Zweig said. "The potential for economic loss is obvious."

Zweig also cited the high price governments are demanding for 3G spectrum and "competitive paranoia" by network operators in creating a potentially dangerous situation.

"These factors, combined with additional 'disconnects' have contributed to industry-wide confusion and hysteria," stated Ms. Zweig. "This confusion and hysteria have virtually precluded a dispassionate and rational analysis of the 3G transition."

The results are from the study: Third Generation Wireless (3G): The Continuing Saga.

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