QuickStudy: 3G Wireless

Current wireless communications are just too slow, some experts say. As the number of wireless handheld devices designed to access the Internet increases, there's a serious need for a faster and better wireless communications technology. This technology, which isn't likely to hit the U.S. for several years, will provide superior wireless voice quality and data services supporting video and multimedia content sent wirelessly to laptops, handhelds and smart phones.

Industry players are talking about the next wave of wireless technology, and they're calling it 3G, for third generation. But it may not be simple for them to agree on a technology. Listening to industry analysts describe 3G is a lot like tuning in to Washington Week in Review and listening to the panelists try to outyell one another.

3G is political, partly because multibillion-dollar markets are always political, but also because the push to faster bandwidth is being driven heavily by demand for better cellular services in Japan and Europe -- but less so in the U.S.

Wireless data applications, such as wireless banking, are already seriously catching on in Japan and Europe, so expanding those capabilities abroad makes sense, analysts say. In Japan, the available wireless spectrum is being used up and another technological standard is needed.

Japan is likely to get the first 3G wireless bandwidth boost (up to 2M bit/sec.) in April of next year, followed by Europe in 2002 and the U.S. sometime between 2003 and 2005, analysts say.

"The U.S. is way behind in wireless, and even people in the wireless industry don't understand how far behind U.S. wireless data applications are compared to those abroad," says Alan Reiter, an analyst at Wireless Internet and Mobile Computing in Chevy Chase, Md.

"Phooey," say analysts such as Mark Zohar at Forrester Research Inc. in Cambridge, Mass. Carriers and equipment vendors like LM Ericsson Telephone Co., Nokia Corp., Lucent Technologies Inc. in Murray Hill, N.J., and Motorola Corp. in Schaumburg, Ill., are "bullish" on 3G, says Zohar.

Yet the "business models and applications remain unclear," Zohar adds. "Carriers believe that 3G is the technology that will launch them into new lucrative markets . . . but they don't know which applications to focus on."