Realistic Expectations for Next-Gen Wireless Capabilities

What can m-commerce developers realistically expect from mobile carriers in the next two to four years? Nothing fancy, according to analysts, who say the killer apps and consumer interest in new mobile technology will be decidedly down to earth.
For an idea of what to expect from next-generation wireless networks now rolling out, mobile analysts recommend leaving the Dick Tracy watch-phone at home and never mind the carrier's claims of supersonic data speeds. The killer apps and consumer interest in new mobile technology will be much more down to earth.

As Japan's NTT DoCoMo unveils its third-generation (3G) mobile network, complete with streaming video and other advanced wireless services, U.S. carriers are still getting their sea legs during partial roll-outs of an intermediate technology dubbed 2.5G. While AT&T, Sprint, Verizon and Cingular have announced their plans to introduce next-generation services, the events of Sept. 11th may give some carriers an early advantage, say analysts.

Charlie Golvin, an analyst for Forrester Research, told M-CommerceTimes that watching videos or receiving multimedia on one's handset will not find much of a real audience with consumers. What will appeal, Golvin predicts, are the fundamentals of 3G: Slightly faster speeds, packet-based transmissions, and the ability to move seamlessly from voice call to data without disconnecting. These will prove much more alluring than the glitzy services hyped by marketers.

Unified messaging, e-mail, and Intranet access are services offered early-on by two of the first U.S. carriers to launch next-generation networks. AT&T Wireless, which rolled out its 2.5G GPRS network in Seattle in July, and Cingular Wireless, which unveiled GPRS service in Seattle in August, are concentrating on tried-and-true applications and customers.

Adam Guy, a senior wireless analyst for the Washington, D.C.-based Strategis research firm, told M-CommerceTimes there could be some business use for multimedia applications, such as documenting work or as a security tool.

As 3G spreads, the call for applications to take advantage of the faster access and the seamless transition from voice to data will demand carriers share some of their revenues with developers, Guy told M-CommerceTimes. Guy cited revenue sharing as a way to retain popular applications, such as games, in the mobile arena.

On the consumer side, Guy says mobile Instant Messaging has a real chance of gaining popularity. Both the integration of wireless networks and the faster data access will provide a boost for the IM market, Guy believes. Galvin also predicts games could gain traction as popular next-generation applications.

3G Rollout In Doubt?

The long-standing struggle to wrestle more radio spectrum for use by 3G services took a time-out after Sept. 11. While the FCC, Commerce Department, and the wireless industry have urged the Defense Department to relinquish some of the airwaves it controls, the terrorist attacks mean one next-generation technology could have an advantage and makes observers question claims of nationwide 3G service any time soon.

U.S. carriers will deploy either GPRS (an upgrade of GSM, used throughout the world) or Qualcomm's CDMA2000. Both Guy and Golvin told M-CommerceTimes that CDMA2000 will have an advantage over GPRS in that CDMA2000 uses existing spectrum more efficiently.

Iain Gillott of iGillott Research points out that CDMA2000 -- in use by Sprint PCS and Verizon -- in addition to providing higher data speeds, triples voice capacity. Voice has long been the major source of revenue for carriers.

Guy told M-CommerceTimes that all carriers have enough spectrum to get started with next-generation services and questions the wisdom of nationwide coverage. After all, Golvin says, it is not as important to have next-generation coverage everywhere as it is to have the service when needed.

The development of next-generation services has been fraught with delays, resource shortages, and bad press. While this has allowed U.S. carriers to learn from the mistakes of others, analysts tell M-CommerceTimes that several pitfalls still lie ahead. Golvin sees as critical the need to create realistic pricing for next-generation services. Currently, the haphazard manner of price determination is akin to throwing spaghetti at the wall and seeing what sticks, says Golvin.

Guy believes 3G cannot be another Wireless Application Protocol (WAP) fiasco with marketing claims unable to be supported by the technology. Tone down the hype, implores Guy.

When will you see next-generation services? If you live outside the area where the carriers are rolling out 2.5G, expect to see faster, more data-centric service after 2005. But don't hold your breath for the Dick Tracy watch phones.

Ed Sutherland is a New York-based editor and journalist. This article first appeared on M-CommerceTimes, an site.

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