Wireless Devices: Wait This One Out

The confusing mishmash available now should winnow down in a year or so

The proliferation of ads from such companies as AT&T Wireless and Sprint PCS give the impression that cruising the Internet on your mobile phone is a breeze if you just sign up for their services. Would that it were true. Despite limitations in data display and entry, phones could be useful for retrieving critical information, even handling such things as stock-trading. But first, phone systems have to get better at the daunting job of handling data.

The good news is that data service is improving, though it is happening a lot faster in Europe and Asia than in the Americas. The key to better data, including e-mail and Web-based information, is a move to a technology called packet-switching. Expect a blizzard of unfamiliar acronyms and competing claims whose validity will be murky until companies decide on features and pricing. Here's a brief guide to making sense of the situation.

Currently, wireless phones connect to the Internet a lot like computers, using dial-up lines. A phone with a mini- browser makes a call to establish a connection, which can mean a long delay before you see any data. Packet-switching is more like going online with a cable modem or DSL phone line. The Internet connection is always on, eliminating the wait while a call is established.

There are bigger benefits. Current connections are inefficient because you have exclusive use of a circuit that is idle most of the time. Packet-switching allows you to share a channel, providing faster, cheaper connections.

The speed increases will be dramatic. CDMA wireless systems, such as those operated by Sprint and Verizon, currently carry data at 14.4 kilobits per second. The CDMA 1X system the carriers will roll out later this year will increase that speed tenfold. In Europe and Asia, carriers are introducing a technology called GPRS, which offers a similar speed boost. The leading U.S. carriers for European-style GSM service, VoiceStream Wireless and Pacific Bell Wireless, will offer GPRS in selected markets this fall.

Packet-switched wireless data are available today. In Japan, NTT DoCoMo's iMode service has made mobile phones the dominant means of Internet access. In the U.S., AT&T Wireless and some Verizon Wireless systems have offered a data service called CDPD for the past couple of years. But PocketNet, as AT&T branded it, offered only spotty coverage in major cities, a top speed of just 19.2 KBPS, and worked only on clunky phones. CDPD has been used mainly with special modem cards in laptops and handheld devices, such as the Novatel Minstrel modems for Palms. Now, AT&T has relaunched the service with beefed-up coverage and spiffy new phones. Basic PocketNet service is free to AT&T Wireless voice customers.

All these approaches are only interim steps. Carriers are moving toward what's called third-generation (3G) wireless services, which will feature megabit data rates and easier global roaming, though seamless worldwide roaming is likely to remain elusive. Watch for 3G networks in Europe and Asia in 2002 and in North America by late 2003 or 2004.

I suspect that in the PC-centric U.S., new data networks will end up mostly serving wireless-enabled laptops or handhelds. But data phones will have their place. In the rest of the world, where PC-based Internet access remains relatively sparse, people are using phones today to buy everything from soft drinks to movie tickets. And despite the difficulty of entering text from a keypad, a kind of instant messaging, called short-message service, is the rage.

It will be at least a year before quality data service is generally available on phones throughout the U.S. In that time, a lot will happen with new and more capable phones, new ways of using phones with other devices, and new--and, with luck, cheaper--service plans for data. For now, it's a good idea to watch and wait while the industry sorts out the new world of wireless data.

Before it's here, it's on the Bloomberg Terminal.