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The next bout: 3G versus BWA

September 30, 2003 - source: ARCchart

Poor 3G. It seems like almost every week we analyse an emerging wireless technology that is faster, cheaper, leaner and fitter and threatens to inflict some serious bodily harm on the aging third generation standard. At some point the referee will have to intervene. In the past, we have examined how Wi-Fi and WiMAX, the broadband wireless access (BWA) standard, will threaten the 3G business case. Many envisage that Wi-Fi’s success in the local area market will be mirrored by WiMAX in the wide area. However, the WiMAX standard is still confined to a sheet of paper and there is no equipment that supports the standard on the market. In the meantime, BWA vendors like Flarion Technologies, IPWireless and Navini Networks have emerged with compelling technologies that support broadband data access in mobile or nomadic environments as well as supporting voice traffic using voice over IP, and the companies can boast of commercial deployments today.

The UMTS 3G standard, technically known as W-CDMA, is looking increasingly obsolete, well before it has been able to establish itself in the market in a serious way. It seems as if almost every week we analyse an emerging wireless technology that is faster, cheaper, leaner and fitter than the aging third generation standard - but it can’t be helped. Innovation is the cornerstone of the technology industry and wireless infrastructure companies have huge financial, and survival, incentives to aggressively push the performance envelope of existing and emerging wireless technologies.

In the past, we have examined how Wi-Fi and the WiMAX standards will threaten the 3G business case. While Wi-Fi is able to provide high speed, localised, wireless Internet access, the emerging WiMAX standard is a wide area technology, supplying wireless coverage over an area of several kilometres – this falls into the category of broadband wireless access, or BWA. Both Wi-Fi and WiMAX are standards-based, developed by the IEEE standards body.

As Wi-Fi has so effectively demonstrated, technology centred on a globally recognised standard can experience rapid market penetration since any vendor is free to manufacture compatible equipment. This ensures a competitive market that drives equipment prices down, further fuelling the take-up of the technology.

Many envisage that Wi-Fi’s success in the local area market will be mirrored by WiMAX in the wide area, BWA market. However, the WiMAX standard is still confined to a sheet of paper and there is no equipment that supports the standard on the market. While Intel and Nokia are both aggressively backing the standard, and WiMAX support may eventually find its way onto Intel’s Centrino platform, we are unlikely to see volume shipment of WiMAX equipment until 2005.

In the meantime, there are several specialist companies pushing proprietary BWA solutions and a number of them can boast of commercial deployments today. While most of these implementations are fixed, requiring customers to erect small external antennas in order to receive the broadband signal, three companies – Flarion Technologies, IPWireless and Navini Networks - have emerged with compelling technologies that support broadband data access in mobile or nomadic environments as well as supporting voice traffic using voice over IP. Importantly, these companies offer simple USB modules or PC cards that extend coverage to desktop and notebook PCs.

These three vendors are each pushing solutions based on a number of established technologies. Flarion is employing flash-OFDM and Navini is using synchronous CDMA (SCDMA). While these two vendors’ solutions are proprietary, IPWireless is pushing UMTS-TDD, which is a standard closely related to UMTS-FDD, the flavour of 3G that European operators are adopting.

What makes these technologies so threatening is the shear superiority of their performance over W-CDMA. They all support data downlink speeds in excess of 500Kbps several kilometres from a base station. By contrast, the limitations of W-CDMA, along with the fact that it requires capacity for both cellular voice and data services, means that operators are unlikely to support 3G connection speeds greater that 100Kbps. The voice requirement also limits the W-CDMA cell size, restricting coverage to just two to three kilometres from a base station.

All this would be academic if, like WiMAX, the BWA equipment offered by Flarion, IPWireless and Navini were confined to the drawing boards of an engineering lab, but three companies can boast of commercial deployments today, albeit at modest levels. While these deployments have largely been restricted to small and medium sized operators provisioning regional coverage, there is evidence that the established operators are showing increasing interest. T-Mobile Ventures made a recent investment in Flarion and it is a widely held belief in the industry that Nextel, the number five US cellular operator, will commence a market trial with Flarion gear by the end of the year. There are also persistent rumours that IPWireless is conducting market trials with a major European operator.

Unlike W-CDMA, the three wireless technologies presented here are data only – there is no voice component. However, because they are all IP-based, delivering voice over IP (VoIP) is a potential service offering. Once again, this is not pie-in-the-sky stuff. Flextronics has already developed a prototype flash-OFDM (Flarion) VoIP handset capable of delivering the quality of service which operators have come to expect from their circuit switched networks.

Having said this, it is unlikely that these BWA technologies will pose a significant threat to cellular voice any time soon. However, this doesn’t detract from the fact that the W-CDMA flavour of 3G is being bruised from all sides. 3G voice is threatened by increased efficiencies of 2G and 2.5G networks, and 3G data taking a battering in the local area from Wi-Fi and in the wide area from standards-based and proprietary BWA technologies. 3G is on the ropes, but will the referee step in?

 


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