3G Wireless.-A Wrecked Paraphernalia

3G Wireless.-A Wrecked ParaphernaliaAt fixed performance level, moving the trade-off
Third Generation or 3G Wireless was introduced incurve upwards can also be achieved by:
2002 in Europe, America, Japan and other parts of theØ Larger investments in physical infrastructure
World simultaneously. It is yet to get more that 5% of(more base-stations)
the market share of the worldwide mobile market. InØ Higher transmitter power (causing higher
Japan it has a mere 5% penetration in spite of theradiation)
hype that has been built on 3G.For another two yearsØ Economics of Scale + the experience curve
it is not going to provide global coverage. Even in mostgives falling equipment prices Logaritmic diagram gives
developed countries it is still not offered Nationally,a straight line for product price fall.(The global user
wherever 3G coverage is given it is not purely 3G.base today is in the 100s of millions)
Coverage. The mobile switches between differentNew handsets and infrastructures will quickly move
technologies like 2G/2.5G in various regions of adown the learning & volume curve and hence give low
country. It is now more than 4 years since 3G wasprices. As electronic equipment becomes very cheap,
offered, why has 3G not come up as promised. Tomaintenance, service and physical infrastructures as
analyze the deployment and failure of 3G so far let usmasts, buildings and cables will become the dominant
understand what factors are inhibiting the adoption ofpart of costs. And the prices will get standardized at a
3G in a big way and why 3G has not been able topoint.
stand ground till now and that too even when peopleIt has been seen that Standardization freezes
have started talking about 4G.performance at a certain technological level and
The wireless landscape in 2006performance jumps when a new standard is fixed
Ø Several competing infrastructures: GPRS,which also demands a total infrastructure changeover
WLANs, 3G + dark-horsesThe Rule-of-thumb
Ø Both large WLAN operators and 1000s of localNew infrastructure must offer at least 10 times better
hot-spot operators. WLAN clearinghouses offer globalperformance to replace old large installed base (This
roaming access. Built-in WLANs in Laptops andrule-of-thumb comes from Andrew Groove at Intel in
hand-heldshis book "Only The Paranoid Survive" and has not
Ø Mobile operators operating in extreme pricebeen properly verified)
pressure but still dominant in handling end user relationØ 3G performance jump is not large enough to
(billing, roaming, seamless mobility etc.)justify infrastructure replacement
Ø Emerging new technologies with potential forØ 3G offers only 3-4 times better spectral
breakthrough by 2010efficiency than 2.5G
Ø A continuous suite of terminals from voice-onlyØ 3G bandwidth only 2-10 times better than 2.5G
ear-phones, handsets,handhelds, & lap-tops etc.Ø GPRS gives better geographical coverage than
History of 3G3G
The term 3G was coined at academic conferencesØ 3G offers better bandwidth but coverage is
around 1990. Then 3G meant everything beyond GSMmore important for the consumers
One 3G vision was mobility by wireless plus personalØ 3G networks not even close to offering the
phone-numbers, following the Individual globally atcoverage of GPRS
closest fixed line. Later the "1G", "2G", "3G" and evenØ GPRS, a software upgrade on the GSM
"4G" terminology was captured by equipment vendorsnetworks will probably always offer better global
in the mid 90s for selling UMTS to the market andcoverage than 3G.
regulators.Ø WLANs offer better bandwidth than 3G
On arrival, 3G was hidden from users in a 2G/3GØ WLANs are already here with a large installed
offerbase on many company lap-tops
Right Now Pure 3G operators have:Ø It is possible to cover hot-spots and city centers
Ø No user baseat low cost for WLAN Service Providers
Ø No trusted BrandØ WLAN base stations cost very less
Ø No complete networkØ WLAN equipment market is already being
Ø Dependent on unfavorable deals with incumbentadopted at a large scale
GSM operatorsØ 3G only adds performance in a small part of
Users :the trade-off diagram if compared to GPRS together
Ø Already GSM customers (phone number, voicewith WLANs
mail, trusted Brand etc.)Emerging dark-horse technologies further undermining
Ø High-end users already using GPRSsegments of the 3G market are
Ø Expected the 151 country global coverage ofØ Airships and other HAP (High Altitude Platforms)
GSM and at least national GPRS coverageover large cities working as platforms for broadband
Ø 3G only offers service in cities.wireless
Ø Pure 3G is seen as a step down from GSMØ In Digital Terrestrial TV (DVB-T), one channel
Ø 3G was hidden from the users in a brandedset aside for data transfer gives a capacity of 38 Mbit.
GSM/GPRS/3G combination offer.Very good coverage in countries adopting DVB-T.
Ø To offer 2G/3G service, pure 3G operatorsCan be used in fast moving cars. Few masts give low
have to strike unfavourable deals for network accessscalability
with 2G operatorsØ Optical wireless is using lasers in free air to
Ø Handsets are GSM/GPRS/3Gsolve the last mile problem, very low mobility. Almost
Ø Incumbent operators target existing user baseinfinite bandwidth
with 2G(R)2.5G(R)3G migration offersØ Satellite projects for offering broadband internet
Ø Pure 3G operators TRY to strike deals with 2Gaccess globally. Very high latency and low mobility.
operators to offer geographical coverage.Will pure 3G operators survive ?
Ø Pure 3G operators unable to secure deals forHistory lesson: Swedish generation shifts in analogue
access to the 2G networksmobile
User habits:Analogue NMT 450 (R) analogue NMT 900
Two separate markets "mobile on the move" andNMT 450 had full national coverage when NMT 900
"semi-mobile Net access" exist.arrived. NMT 900 was targeted at yuppies with urban
"Mobile on the move" (GPRS/3G)coverage, pocket sized handsets and lower tariffs.
Applications: Voice, SMS/E-mail, stock quotes, movieCoverage was important, urban NMT 450 users
tickets, weather, time-tables, driving directions, bankresisted giving up a rural coverage they actually
accounts, yellow pages, delayed flights etc.seldom used NMT 900 had to invest in national
High mobility need, works on low bandwidthcoverage before take-off
(i-Mode operates on 9.6 Kbit)Analogue NMT 900 (R) Digital GSM
"Semi-mobile Net access" (WLAN)Coverage and quality was important. With NMT only
Lap-Top or PDA download of e-mail and files.operational in the Nordics, Pan-European was the
Voiceprobably not includedselling point, GSM did not take off until a significant
Sitting still, low mobility, high bandwidth needSwedish national coverage was reached
The Race: 3G Verses 2G/2.5G/WLANCoverage is important for mobile services
Technology Drivers for mobility and ReachThe "3G Business Case" - profitable only in best case
The Scientific argument is that there is a trade-offscenarios
between mobility in bandwidth and geographical reachØ Financial analysis shows the 3G Business case
Mobility & Reach are related to:ROI very dependent on:
Ø handset sizeØ Very high 3G penetration (e.g. diagram)
Ø battery timeØ Operator market share
Ø usage in fast moving vehiclesØ Population density
Ø geographical coverageØ Being an incumbent
Drivers for the wireless industry are:Ø The $ 320 billion 3G investment in Europe is
Ø Microprocessor performance increase (Moore'sextreme in size - and business risk.
law limitation)Ø GPRS upgrades cost 5 % of 3G
Ø Battery performance increase (a much slowerPhysical 3G investments in Europe
exponential curve than Moore's Law) (batteries are theØ $150 billion paid for 3G licences + handset
big bottleneck)subsidies and marketing costs.A very large and high
Ø Air interfaces with increasingly better spectralrisk investment
efficiency*Ø GPRS upgrade of 2G networks cost 5% of 3G
(Better processor performance makes new moreinvestment. An alternative with less capacity than 3G
computationally intensive air interfaces viable.but much lower business risk
Shannons Law puts an upper limit on spectralØ 3G network investment (cost/operator) 3 billion
efficiency as we understand it today and we are$
gradually getting closer to this limit but innovations asØ GPRS upgrading of a GSM network (cost
smart antennas will push spectral efficiency further)operator) 0.1 billion $
Ø Better processor performance/power(source: Merrill Lynch)
consumption ratioØ Upgrade Cost per Subscriber (US$)
Ø Handset display power consumption efficiencyØ W-CDMA 300
These drivers sum to a continuous performanceØ GPRS 10
increase in wireless. Exponential growth (slower or(source: Morgan Stanley )
faster) is the normal case and shows up in all3G Business will be short of a break-even in 2010 as
technologies and industries.4G arrives
Ø Better performance makes it possible to moveThe Question to ponder is:
upwards on the trade-off curve of "bandwidth-mobility""Does the Remaining World have to go through the
Ø Larger investments in wireless base-stationspainful
can also move the curve upwardsEvolution of 3G or just leapfrog from 2G/2.5G to 4G.