There are several competing wireless technology infrastructures like 2G, GPRS, WLANs, 3G and other evolving technologies in 2007, these technologies will later become a part of 4G Wireless to be commercialized worldwide in 2010.

There are both large Wireless LAN (WLAN) operators and 1000s of local hot-spot operators and WLAN clearinghouses offering global roaming access. The large numbers of WLANs built into Laptops and hand-heads have necessitated their scalability to 4G Wireless seamlessly even though these technologies do not support 3G Wireless. These technologies are sure to get integrated with 4G Wireless by 2010.

World Wide State of 3G Wireless Mobile Operators:

Mobile operators are operating in extreme price pressure but are still dominant in handling end user relation (billing, roaming, seamless mobility etc.)

A continuous suite of terminals from voice-only ear-phones, handsets, handhelds, & lap-tops etc. flooding the Market are making Mobile Operators Survive.

Demand for 3G Wireless not enough to let operators shift completely to 3G Wireless.

3G Compatible handset and other device owners feel cheated for not being able to use all 3G features simultaneously driving the cost of ownership of a 3G Compatible set very high and probably a zero Return on Investment seeing the future 3G Scenario and impending arrival of a totally new technology,4G Wireless demanding complete equipment changeover.

A Look at The 3G Wireless Industry World Wide:

History of 3G

The term 3G was coined at academic conferences around 1990. Then 3G meant everything beyond GSM one 3G vision was mobility by wireless plus personal phone-numbers, following the Individual globally at closest fixed line. Later the "1G", "2G", "3G" and even "4G" terminology was captured by equipment vendors in the mid 90s for selling UMTS to the market and regulators.

Third Generation or 3G Wireless was introduced in 2002 in Europe, America, Japan and other parts of the World simultaneously. On arrival 3G had to target the Users who were already GSM customers (phone number, voice mail, trusted Brand etc.), High-end users already using GPRS, Users Expected the 151 country global coverage of GSM and at least national GPRS coverage. This has not come till now. It is now more than 5 years since 3G was offered, why has 3G not come up as promised. For another two years pure 3G Wireless is not going to provide global coverage, that too even when people have started talking about 4G implementation in 2010. It is yet to get more that 5% of the market share of the worldwide mobile market in 2007. In Japan it has a mere 5% penetration in spite of the hype that has been built on 3G.

The analysis of the deployment and failure of 3G and why 3G has not been able to stand ground so far let us understand what factors are inhibiting the adoption of 3G in a big way.

The Crucial Question:

The big question is that, do the technology trackers toe the line of the Mobile Operators and Equipment Manufacturers and make it be seen that everything in the Mobile arena is just going fine and be in good books of these exploiters and get showered by awards or Stand up and explain to the users that things are not that right for them to be carried away by the media campaign and the most idealistic condition features shown by the 3G mobile manufacturers as well as the 3G Service Providers and get shocked to hear later onwards after investing in the hardware that your most favorite feature which made you decide on the product and services is not even available in your area and it would be months before you get to use it. If what I have said sounds unrealistic, please talk to users who have heavily invested in 3G Devices and hear their woes. I as an Information & Communication Industry tracker think that it would be appropriate to tell the truth about 3G which till now is the Best and Feature rich GSM technology till date.

State of Pure 3G operators in 2007?

A Insignificant user base

No trusted Brand in any country Worldwide

No complete network

Dependent on unfavorable deals with incumbent GSM operators

3G hidden from users in a 2G/3G offer.

3G services offered in only cities, hidden from the users in a branded GSM/GPRS/3G combination offer.

To offer 2G/3G service, pure 3G operators had to strike unfavorable deals for network access with 2G operators.

Handsets are GSM/GPRS/3G hence very expensive and complex.

Incumbent operators target existing user base with 2G(r)2.5G(r)3G migration offers.

Pure 3G operators try to strike deals with 2G operators to offer geographical coverage but 3G operators unable to secure deals for access to the 2G networks.

Pure 3G seen as a step down from GSM in terms of reach and compatibility with technologies existing in other countries in terms of Global coverage and uniform features.3G and 2G/2.5G are looked as different standards with no upward or downward compatibility.

Even in most developed countries it is still not offered nationally, wherever 3G coverage is given it is not purely 3G Coverage. The mobile switches between different technologies like 2G/2.5G in various regions of a country.

Analysis of 3G Wireless Failure till date:

3G performance jump is not large enough to justify infrastructure replacement

Taking the Success Story of Intel till Pentium IV and applying The Rule-of-thumb, new infrastructure must offer at least 10 times better performance to replace old large installed base (This rule-of-thumb comes from Andrew Groove at Intel in his book "Only the Paranoid Survive"

3G offers only 3-4 times better spectral efficiency than 2.5G

3G bandwidth only 2-10 times better than 2.5G

GPRS gives better geographical coverage than 3G

3G offers better bandwidth but coverage is more important for the consumers

3G networks not even close to offering the coverage of GPRS - GPRS, a software upgrade on the GSM networks will probably always offer better global coverage than 3G.

WLANs offer better bandwidth than 3G

WLANs are already here with a large installed base on many company lap-tops

It is possible to cover hot-spots and city centers at low cost for WLAN Service Providers .WLAN base stations cost very less.WLAN equipment market is already being adopted at a large scale.

GPRS together with WLAN is a better solution for mobility in terms of technology and features and can be implemented at fraction of the cost of a 3G Upgrade unless we have national and global coverage built in 3G Wireless Systems, Pure 3G operators will not survive

Standardization freezes performance at a certain technological level and performance jumps when a new standard is fixed which also demands a total infrastructure changeover. The performance jump of 3G Standard against 2G/2.5G Standard does not warrant a total infrastructure change.

History lesson:

Swedish generation shifts in analogue mobile

Analogue NMT 450 (r) analogue NMT 900 NMT 450 had full national coverage when NMT 900 arrived. NMT 900 was targeted at yuppies with urban coverage; pocket sized handsets and lower tariffs. Coverage was important, urban NMT 450 users resisted giving up a rural coverage they actually seldom used NMT 900 had to invest in national coverage before take-off

Analogue NMT 900 (r) Digital GSM Coverage and quality was important. With NMT only operational in the Nordics, Pan-European was the selling point, GSM did not take off until a significant Swedish national coverage was reached Coverage is important for mobile services

Looking at The "3G Business Case":

Financial analysis shows the 3G Business case ROI is very dependent on:

Very high 3G penetration

Operator market share

Population density

Being an incumbent

The $ 320 billion 3G investment in Europe is extreme in size - and business risk. GPRS upgrades cost 5 % of 3G

A look at Physical 3G investments in Europe - $150 billion paid for 3G licenses + handset subsidies and marketing costs. A very large and high risk investment

GPRS upgrade of 2G networks cost 5% of 3G investment. An alternative with less capacity than 3G but much lower business risk 3G network investment (cost/operator) 3 billion $ - GPRS upgrading of a GSM network (cost/operator) 0.1 billion $ (source: Merrill Lynch)

Upgrade Cost per Subscriber (US$) - W-CDMA 300 - GPRS 10 (source: Morgan Stanley )

Taking 3G Wireless in best case scenarios:

After Calculations with all these parameters Pure 3G Business will be short of a break-even in 2010 as 4G arrives and going to 4G Wireless will warrant another infrastructure change.

Is the hype about 3G Justified, is it a practical to implement this technology when we know that we will have to go for another total infrastructure makeover when 4G Arrives and all of us know that 4G as a technology will support all wireless technologies, it will have backward compatibility with all previous technologies and the 4G Standard has been thoroughly researched.

The Question to ponder is:

Do the Remaining People who have not gone for 3G Wireless have to go through the painful Evolution of 3G when we know that a completely different technology 4G will also require a total infrastructure makeover and is just a few years away. As early at 2008 China is implementing 4G for the Olympic Games. Would leapfrogging from 2G/2.5G to 4G not make sense. The total onus is on the reader of this paper and if he is convinced take it forward by forwarding this paper to people one knows or through the word of mouth. I am honor bound as an Industry analyst to circulate my analysis. It will be history which will decide if I was right or wrong but my intentions of writing this piece are selfless.