Subject: [NEXTEL-1] The next bout: 3G versus BWA

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Date: Tue, 30 Sep 2003 23:37:28 -0400

http://www.3gnewsroom.com/3g_news/sep_03/news_3793.shtml

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Recent News

3UK offers two new 3G price plans,
October 1, 2003

Lack of High-Speed Data Demand Thwarting
Cellular Base Station Growth, September 30, 2003

New White Paper explains 3G's next
battleground, September 30, 2003

3G radiation health scare, September
30, 2003

The first 3G call in Estonia was
made in the EMT trial network, September 30, 2003

The next bout: 3G versus BWA,
September 30, 2003

Vodafone delays further 3G launch,
September 30, 2003

Interoperability testing delays SonyEricsson's
3G Z1010, September 29, 2003

Maxis to begin first stage of 3G
trial in year end, September 29, 2003

Verizon Wireless launches San Diego
3G network powered by Nortel Networks, September 29, 2003

- previous news

The next bout: 3G versus BWA

September 30, 2003 - source: ARCchart

Poor 3G. It seems like almost every week we analyse an emerging wireless
technology that is faster, cheaper, leaner and fitter and threatens to
inflict some serious bodily harm on the aging third generation standard.
At some point the referee will have to intervene. In the past, we have
examined how Wi-Fi and WiMAX, the broadband wireless access (BWA) standard,
will threaten the 3G business case. Many envisage that Wi-Fi’s success
in the local area market will be mirrored by WiMAX in the wide area. However,
the WiMAX standard is still confined to a sheet of paper and there is
no equipment that supports the standard on the market. In the meantime,
BWA vendors like Flarion Technologies, IPWireless and Navini Networks
have emerged with compelling technologies that support broadband data
access in mobile or nomadic environments as well as supporting voice traffic
using voice over IP, and the companies can boast of commercial deployments
today.

The UMTS 3G standard, technically known as W-CDMA, is looking increasingly
obsolete, well before it has been able to establish itself in the market
in a serious way. It seems as if almost every week we analyse an emerging
wireless technology that is faster, cheaper, leaner and fitter than the
aging third generation standard - but it can’t be helped. Innovation is
the cornerstone of the technology industry and wireless infrastructure
companies have huge financial, and survival, incentives to aggressively
push the performance envelope of existing and emerging wireless technologies.

In the past, we have examined how Wi-Fi and the WiMAX standards will
threaten the 3G business case. While Wi-Fi is able to provide high speed,
localised, wireless Internet access, the emerging WiMAX standard is a
wide area technology, supplying wireless coverage over an area of several
kilometres – this falls into the category of broadband wireless access,
or BWA. Both Wi-Fi and WiMAX are standards-based, developed by the IEEE
standards body.

As Wi-Fi has so effectively demonstrated, technology centred on a globally
recognised standard can experience rapid market penetration since any
vendor is free to manufacture compatible equipment. This ensures a competitive
market that drives equipment prices down, further fuelling the take-up
of the technology.

Many envisage that Wi-Fi’s success in the local area market will be mirrored
by WiMAX in the wide area, BWA market. However, the WiMAX standard is
still confined to a sheet of paper and there is no equipment that supports
the standard on the market. While Intel and Nokia are both aggressively
backing the standard, and WiMAX support may eventually find its way onto
Intel’s Centrino platform, we are unlikely to see volume shipment of WiMAX
equipment until 2005.

In the meantime, there are several specialist companies pushing proprietary
BWA solutions and a number of them can boast of commercial deployments
today. While most of these implementations are fixed, requiring customers
to erect small external antennas in order to receive the broadband signal,
three companies – Flarion Technologies, IPWireless and Navini Networks
- have emerged with compelling technologies that support broadband data
access in mobile or nomadic environments as well as supporting voice traffic
using voice over IP. Importantly, these companies offer simple USB modules
or PC cards that extend coverage to desktop and notebook PCs.

These three vendors are each pushing solutions based on a number of established
technologies. Flarion is employing flash-OFDM and Navini is using synchronous
CDMA (SCDMA). While these two vendors’ solutions are proprietary, IPWireless
is pushing UMTS-TDD, which is a standard closely related to UMTS-FDD,
the flavour of 3G that European operators are adopting.

What makes these technologies so threatening is the shear superiority
of their performance over W-CDMA. They all support data downlink speeds
in excess of 500Kbps several kilometres from a base station. By contrast,
the limitations of W-CDMA, along with the fact that it requires capacity
for both cellular voice and data services, means that operators are unlikely
to support 3G connection speeds greater that 100Kbps. The voice requirement
also limits the W-CDMA cell size, restricting coverage to just two to
three kilometres from a base station.

All this would be academic if, like WiMAX, the BWA equipment offered
by Flarion, IPWireless and Navini were confined to the drawing boards
of an engineering lab, but three companies can boast of commercial deployments
today, albeit at modest levels. While these deployments have largely been
restricted to small and medium sized operators provisioning regional coverage,
there is evidence that the established operators are showing increasing
interest. T-Mobile Ventures made a recent investment in Flarion and it
is a widely held belief in the industry that Nextel, the number five US
cellular operator, will commence a market trial with Flarion gear by the
end of the year. There are also persistent rumours that IPWireless is
conducting market trials with a major European operator.

Unlike W-CDMA, the three wireless technologies presented here are data
only – there is no voice component. However, because they are all IP-based,
delivering voice over IP (VoIP) is a potential service offering. Once
again, this is not pie-in-the-sky stuff. Flextronics has already developed
a prototype flash-OFDM (Flarion) VoIP handset capable of delivering the
quality of service which operators have come to expect from their circuit
switched networks.

Having said this, it is unlikely that these BWA technologies will pose
a significant threat to cellular voice any time soon. However, this doesn’t
detract from the fact that the W-CDMA flavour of 3G is being bruised from
all sides. 3G voice is threatened by increased efficiencies of 2G and
2.5G networks, and 3G data taking a battering in the local area from Wi-Fi
and in the wide area from standards-based and proprietary BWA technologies.
3G is on the ropes, but will the referee step in?

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