3G Wireless.-A Wrecked Paraphernalia

3G Wireless.-A Wrecked ParaphernaliaØ Larger investments in wireless base-stations
Third Generation or 3G Wireless was introduced incan also move the curve upwards
2002 in Europe, America, Japan and other partsAt fixed performance level, moving the trade-off
of the World simultaneously. It is yet to get morecurve upwards can also be achieved by:
that 5% of the market share of the worldwideØ Larger investments in physical infrastructure
mobile market. In Japan it has a mere 5%(more base-stations)
penetration in spite of the hype that has beenØ Higher transmitter power (causing higher
built on 3G.For another two years it is not goingradiation)
to provide global coverage. Even in mostØ Economics of Scale + the experience curve
developed countries it is still not offered Nationally,gives falling equipment prices Logaritmic diagram
wherever 3G coverage is given it is not purelygives a straight line for product price fall.(The
3G. Coverage. The mobile switches betweenglobal user base today is in the 100s of millions)
different technologies like 2G/2.5G in variousNew handsets and infrastructures will quickly
regions of a country. It is now more than 4 yearsmove down the learning & volume curve and
since 3G was offered, why has 3G not come uphence give low prices. As electronic equipment
as promised. To analyze the deployment andbecomes very cheap, maintenance, service and
failure of 3G so far let us understand whatphysical infrastructures as masts, buildings and
factors are inhibiting the adoption of 3G in a bigcables will become the dominant part of costs.
way and why 3G has not been able to standAnd the prices will get standardized at a point.
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
WLANs, 3G + dark-horseschangeover
Ø Both large WLAN operators and 1000s ofThe Rule-of-thumb
local hot-spot operators. WLAN clearinghousesNew infrastructure must offer at least 10 times
offer global roaming access. Built-in WLANs inbetter performance to replace old large installed
Laptops and hand-heldsbase (This rule-of-thumb comes from Andrew
Ø Mobile operators operating in extreme priceGroove at Intel in his book "Only The Paranoid
pressure but still dominant in handling end userSurvive" and has not been properly verified)
relation (billing, roaming, seamless mobility etc.)Ø 3G performance jump is not large enough to
Ø Emerging new technologies with potential forjustify infrastructure replacement
breakthrough by 2010Ø 3G offers only 3-4 times better spectral
Ø A continuous suite of terminals fromefficiency than 2.5G
voice-only ear-phones, handsets,handhelds, &Ø 3G bandwidth only 2-10 times better than
lap-tops etc.2.5G
History of 3GØ GPRS gives better geographical coverage
The term 3G was coined at academicthan 3G
conferences around 1990. Then 3G meantØ 3G offers better bandwidth but coverage is
everything beyond GSMmore important for the consumers
One 3G vision was mobility by wireless plusØ 3G networks not even close to offering the
personal phone-numbers, following the Individualcoverage of GPRS
globally at closest fixed line. Later the "1G", "2G",Ø GPRS, a software upgrade on the GSM
"3G" and even "4G" terminology was captured bynetworks will probably always offer better global
equipment vendors in the mid 90s for sellingcoverage than 3G.
UMTS to the market and 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
Ø No user basecenters at 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 withadopted at a large scale
incumbent GSM operatorsØ 3G only adds performance in a small part of
Users :the trade-off diagram if compared to GPRS
Ø Already GSM customers (phone number,together with WLANs
voice mail, trusted Brand etc.)Emerging dark-horse technologies further
Ø High-end users already using GPRSundermining segments of the 3G market are
Ø Expected the 151 country global coverage ofØ Airships and other HAP (High Altitude
GSM and at least national GPRS coveragePlatforms) over large cities working as platforms
Ø 3G only offers service in cities.for broadband 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
GSM/GPRS/3G combination offer.Mbit. Very good coverage in countries adopting
Ø To offer 2G/3G service, pure 3G operatorsDVB-T. Can be used in fast moving cars. Few
have to strike unfavourable deals for networkmasts give low scalability
access 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.
Ø Incumbent operators target existing userAlmost infinite bandwidth
base with 2G(R)2.5G(R)3G migration offersØ Satellite projects for offering broadband
Ø Pure 3G operators TRY to strike deals withinternet access globally. Very high latency and low
2G operators to offer geographical coverage.mobility.
Ø Pure 3G operators unable to secure deals forWill pure 3G operators survive ?
access to the 2G networksHistory lesson: Swedish generation shifts in
User habits:analogue mobile
Two separate markets "mobile on the move" andAnalogue NMT 450 (R) analogue NMT 900
"semi-mobile Net access" exist.NMT 450 had full national coverage when NMT
"Mobile on the move" (GPRS/3G)900 arrived. NMT 900 was targeted at yuppies
Applications: Voice, SMS/E-mail, stock quotes,with urban coverage, pocket sized handsets and
movie tickets, weather, time-tables, drivinglower tariffs. Coverage was important, urban NMT
directions, bank accounts, yellow pages, delayed450 users resisted giving up a rural coverage
flights etc.they actually seldom used NMT 900 had to invest
High mobility need, works on low bandwidthin national coverage 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
Lap-Top or PDA download of e-mail and files.only operational in the Nordics, Pan-European was
Voiceprobably not includedthe selling point, GSM did not take off until a
Sitting still, low mobility, high bandwidth needsignificant Swedish 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
The Scientific argument is that there is acase scenarios
trade-off between mobility in bandwidth andØ Financial analysis shows the 3G Business case
geographical reachROI very dependent on:
Mobility & Reach are related to:Ø Very high 3G penetration (e.g. diagram)
Ø handset sizeØ Operator market share
Ø battery timeØ Population density
Ø usage in fast moving vehiclesØ Being an incumbent
Ø geographical coverageØ The $ 320 billion 3G investment in Europe is
Drivers for the wireless industry are:extreme in size - and business risk.
Ø Microprocessor performance increaseØ GPRS upgrades cost 5 % of 3G
(Moore's law limitation)Physical 3G investments in Europe
Ø Battery performance increase (a muchØ $150 billion paid for 3G licences + handset
slower exponential curve than Moore's Law)subsidies and marketing costs.A very large and
(batteries are the big bottleneck)high risk investment
Ø Air interfaces with increasingly better spectralØ GPRS upgrade of 2G networks cost 5% of
efficiency*3G investment. An alternative with less capacity
(Better processor performance makes new morethan 3G but much lower business risk
computationally intensive air interfaces viable.Ø 3G network investment (cost/operator) 3
Shannons Law puts an upper limit on spectralbillion $
efficiency as we understand it today and we areØ GPRS upgrading of a GSM network (cost
gradually getting closer to this limit but innovationsoperator) 0.1 billion $
as smart antennas will push spectral efficiency(source: Merrill Lynch)
further)Ø Upgrade Cost per Subscriber (US$)
Ø Better processor performance/powerØ W-CDMA 300
consumption ratioØ GPRS 10
Ø Handset display power consumption efficiency(source: Morgan Stanley )
These drivers sum to a continuous performance3G Business will be short of a break-even in 2010
increase in wireless. Exponential growth (slower oras 4G arrives
faster) is the normal case and shows up in allThe Question to ponder is:
technologies and industries."Does the Remaining World have to go through
Ø Better performance makes it possible tothe painful
move upwards on the trade-off curve ofEvolution of 3G or just leapfrog from 2G/2.5G to
"bandwidth-mobility"4G.