3G Wireless

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3G Wireless

Bottom Line for Accounting

Introduction

Operating in today's business world can be very hectic; the pace of our work and everything in our life continues to accelerate at a breakneck speed. As a result, we attempt to stay connected with our clients, family and friends by using telephones, voice mail and e-mail. One of the ways to accomplish the constant connection is through mobile devices and services provided by various wireless communication providers.

Staying connected with voice and data services—including Internet access—and remaining mobile, has tremendous potential for cost reduction and productivity gains. While these devices and services have had an interesting evolution, we have heard for some time the promise to deliver "3G wireless services." What is 3G, what's it all about and how can we use this technology to our advantage?

What is 3G Wireless?

3G wireless technologies represent the convergence of various 2G wireless telecommunications systems in a single uniform global system. Basically, these systems are designed to offer increased voice capacity and higher-speed data rates by providing a bigger wireless pipeline. The International Telecommunications Union (ITU), a regulatory and standards-setting body in the area of wireless communications, states that any system claiming to be 3G must be capable of a minimum speed of 144 Kbs with an upper range of 2Mbs. At its core, 3G wireless technologies represent a shift from voice-centric services to multimedia-oriented services, such as video, voice, data, and fax.

When it finally does get here, 3G wireless will bring several key features. The first feature is improved bandwidth that will provide the ability to deliver rich media to our devices, and make accessing and using the Internet through a mobile device a much better experience. Second, 3G will unify existing cellular standards, such as GSM, TDMA, and CDMA, and thereby provide the roaming capabilities we can only now dream about today.

A Little Perspective

When we talk about wireless communications, there are three primary categories: Wireless Wide-Area Networking (WWAN), Wireless Local Area Networking (WLAN) and Wireless Personal Area Networking (WPAN). The term "3G" relates to the first category WWAN that provides wireless services, voice and data, over a large geographic area using a system of switches and towers that are usually maintained by some public organization. Our interface with this type of network for the past 15+ years has been through our cellular or mobile phones.

WWANs are commonly referred to by their generation of technology. The first generation (1G) in the 1980s consisted of circuit-switched analog networks and mobile phones that were, most of the time, anchored to our cars (remember the cell phone cord?).

The second generation (2G) came along in the 1990s and consisted of digital devices, along with the first all-digital networks. The cell phone became a valuable business tool as battery life, device features, and service coverage and reliability all improved with the digital networks and digital devices. Over the past 10 years, mobile phones made their way from our cars to our pockets and have become one of the largest segments of the consumer electronics industry.

As we moved to digital devices, the demand for wireless devices and services increased significantly. The most popular 2G wireless technology is the GSM system or Global Systems for Mobile Communications. GSM systems were first implemented in the early 1990s. Now in place in more than 125 countries throughout the world, GSM recently topped the 1 billion mark for customers world-wide.

GSM systems use two different types of technologies: Frequency Division Multiple Access (FDMA) and Time Division Multiple Access (TDMA). These technologies simplify transmission and reception for the electronics in the mobile units. GSM and other TDMA-based systems are very popular in Europe, while here in the United States, Code Division Multiple Access (CDMA) technology was used to build our wireless networks.

As you can imagine, with all of these technologies in place, and with the numerous wireless providers available today, interoperability between networks is next to impossible. In others words, your GSM device only works on a GSM network. But wait . . . after 2G comes 3G right? With 3G systems comes the promise of seamless roaming between networks and the delivery of rich media to our devices at blinding speeds.

As you can imagine, one of the keys to getting to 3G is in setting standards. UMTS (Universal Mobile Telecommunications System) is a so-called "third-generation (3G)," broadband, packet-based transmission of text, digitized voice, video, and multimedia at data rates up to, and possibly higher than, 2 megabits per second (Mbps). This offers a consistent set of services to mobile computer and phone users no matter where they are located in the world. Endorsed by major standards bodies and manufacturers, and based on the GSM communication standard, UMTS is the planned standard for mobile users around the world.

Baby Steps

The explosion of Internet usage has had a tremendous impact on the demand for better wireless data communication services, and with it, the push to 3G wireless service. Today, effective data transfer rates are too slow to be efficient when it comes to data transfer. Since the infrastructure for 3G is not completely built today, the providers of wireless services are faced with the challenge of meeting customer demands for high-speed services without the full-blown 3G infrastructure. As a result of the increased demand, some GSM and CDMA providers developed 2G+ technology that increases the data communication speeds as high as 384 kbps. These 2G+ systems are based on General Packet Radio Service (GPRS) and Enhanced Data Rates for Global Evolution (EDGE) technologies. We will continue to see vendors go to these sorts of systems as we move along the path to 3G wireless.

Bottom Line for Accounting

3G is coming, but getting the 2 Mbs that is promised is still 18 to 24 months away for most of us. For example, in late July, AT&T Wireless launched 3G service in only four cities: Detroit, Phoenix, San Francisco, and Seattle, and is expected to begin service in Dallas and San Diego by the end of 2004.

How does this benefit the Accounting Professional? One of the biggest benefits for the accounting profession, and, in general, for any mobile worker, can be summed up in three words: mobility, mobility, mobility. Getting out of the office and getting closer to our clients, potential clients, and, in general, "The Action," is critical to most successful businesses. Being mobile and staying connected in today's business world is critical. The next 18 to 24 months could bring some significant changes of wireless communications and we all need to do some planning.

The competition here in the United States of wireless providers, at a minimum, is spirited. In many cases, these providers are making huge infrastructure upgrades. In addition to AT&T Wireless, there are at least five other national providers all looking to own this market space, and there are multiple technologies at play in servicing the wireless consumer. This all adds up to, and smells like . . . consolidation! In fact, many analysts predict that we will be down to four or less major U.S. carriers within the next 18 months.

So what do we do about it? The impact of these mergers will affect timing of 3G services and we should approach plans to use 3G with caution. In addition, as a result of the mergers of the revised rate plans, service availability and roaming will be affected.

We should all consider short-term contracts so that we can take advantage of new rate plans as they become available. Although it isn't perfectly clear how and when the world of 3G wireless will happen, it is clear that it's almost here. The standards have been established, the demand is there and wireless providers are building the infrastructure . . . so hold on; the ride should be interesting.