3G Wireless Race Slows to Snail's Pace

date: July 18, 2001 - source: SRI Consulting Business Intelligence

Third-generation (3G) cellular wireless data services promise a wealth of new and improved performance capabilities. According to the latest Portable Intelligence Viewpoints from SRI Consulting Business Intelligence's (SRIC-BI's) Explorer service, 3G is a quantum leap for consumers, but will not have a trouble-free path to market. The recent 3G setbacks experienced in the United Kingdom and Japan's NTT DoCoMo illustrate the scope of the problem.

David Benson, senior consultant at SRIC-BI, writes about four continuing problems that are plaguing the worldwide 3G industry: "An extremely large investment is necessary to purchase operating licenses and expand infrastructures, the United States is hindered by lack of sufficient operating spectrum, and no evidence indicates that consumers are willing to pay premiums for higher-cost 3G services." He continues, "Competition to be the first to market has been very strong between Europe and Japan. In the United States, meantime, the CDMA2000 variant has moved ahead in the race by standing still because of the setbacks above."

Benson explains that in April, the ITU notified Qualcomm that its CDMA2000 2.5-Generation wireless technology interim step toward 3G met the criteria for the first-level performance phase of 3G service. The Qualcomm CDMA2000 camp is now able to claim that the 2.5G service launch by SK Telecom in Korea during October 2000 represented 3G-level performance. Although widespread deployment of full-capacity 3G service is still several years from initiation in the United States, evolving upgrades for CDMA2000-based 2.5 and 2.75G mobile wireless service appear obtainable and have realistic performance milestones. Benson believes that both the levels of performance and deployment schedules of the CDMA2000 upgrade path to 3G, although not trouble free, will be smoother and less expensive than those of competing GSM alternatives in the United States.

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