Next-Gen Mobile Phones: Vision vs. Reality

At the ITU telecom-fest in Hong Kong, everyone wants to create a super, do-all, mobile phone. But no one can agree on which network standard to use

The current collective big think at the ITU Telecom World 2006 forum in Hong Kong goes something like this. Mobile phones are destined to evolve into all-purpose digital appliances (think veritable computers in your pocket) that will pack awesome processing power and operate at blistering data speeds that will seamlessly connect to the Internet and handle such tricks as video streaming on 30 or more channels.

The optimism comes from the fact that 3G, wireless, mobile-phone technologies seem to have reached a tipping point. The number of 3G users more than doubled between 2004 and 2006, topping 260 million users at the start of this year. Some 60 million of those subscribers, mostly in Japan and South Korea, use handsets that run on high-speed networks with capacity of 256 kilobits per second using the W-CDMA or CDMA 1X EV-DO technology standards.

However, there is a problem—a big one. The global telecom industry is nowhere near a consensus on what sort of network standard or combination of them will support, in an efficient and cost effective manner, the kind of whiz-bang functionality now being predicted. On top of that, most of the real growth ahead in the mobile telephone industry will be in emerging markets, where high-end handsets and data services make little economic sense.

Upgrade, or WiMax?

A recent report by Gartner forecasts emerging markets will account for 87% of the additional 1.5 billion in worldwide mobile-phone subscription growth predicted by 2010. (Worldwide, there are about 2.1 billion mobile-phone users now.)

And that raises the question of whether operators will really want to throw additional investments into new "super 3G" network upgrades, or look at alternative wireless-access technologies such as WiMax (short for Worldwide Interoperability for Microwave Access) that have been lauded by Intel and others as a cost-effective way to reach developing-world consumers.

WiMax networks support data speeds of up to five megabits per second and can transmit signals over a much bigger coverage area than can existing wireless technologies. An evolution of this technology, Mobile WiMax, is so powerful that it can seamlessly handle video conferencing, TV viewing, and ultra-fast data transmission for a consumer in a car moving at speeds up to 60 mph.

Less Infrastructure Required

South Korea's Samsung Electronics (SSNGY), a big WiMax proponent, has demonstrated in a limited area that a Mobile WiMax network could transmit data at a speed of up to one gigabit per second when stationary and 100 megabits per second on a moving vehicle.

WiMax, which is spoken of by supporters as a stepping stone for 4G (or fourth generation), also represents a far more affordable and realistic option for some countries such as India over digital subscriber lines and cable, which would require expensive physical wiring infrastructure and maintenance.

One camp consists of telecom operators and technology companies—already invested heavily in the two big, existing 3G network technologies—who argue for a gradual improvement approach. The biggest rap against WiMax from this crowd is that it still is a largely unproven standard vs. existing ones. "There is a lot of work to be done with WiMax to make it work commercially," says Paul Jacobs, chief executive officer of Qualcomm, the world's second-largest maker of mobile-phone chips and the owner of CDMA technology.

WiMax Fan Club

The path to digital nirvana may be upgrades to the existing two networks, such as high-speed downlink pack access, or HSDPA, grafted onto WCDMA networks. Add-ons to CDMA 2000 1X networks such as EV-DO (evolution data optimized) Revision A also are the way to go, some argue.

Mohammad Shakouri, the corporate vice-president of strategy at Israel-based Alvarion, begs to differ. He is definitely a partisan in this debate. "We only have one mission in life: to make WiMax successful," he says. Shakouri thinks WiMax is perfect for developing economies such as India and Africa that want to leapfrog from spotty, fixed-line telecom networks into the high-speed, next-generation, wireless era. "We can put this solution in Africa," he says, "and the value proposition is that you don't have to wait 5 or 10 years."

The argument is that even "super 3G" won't introduce perfectly seamless mobility and that WiMax could cut through 3G and fixed-line broadband altogether to lead developing countries directly toward the utopia of 4G through the evolution of Mobile WiMax.

Wait and See Attitude

In the agnostic camp are telecoms such as China's ZTE. Qiang Cao, a vice-president at ZTE, thinks WiMax "is a cost-effective option and that coverage (quality) is comparable with other technologies." However, he does concede the wireless technology is "immature" and may end up complementing rather than displacing existing standards. ZTE is going to let the market sort things out before committing, he says.

In the final analysis it is probably going to take years before this all gets sorted out and the visions of high-powered, do-all, mobile phones becomes a reality for the majority of global consumers. "How are we ever going to deliver that in a world of diverging standards?" asks Guenter Weinberger, president and chief executive officer of Sandbridge Technologies, a fabless semiconductor company. That is a question that has yet to be untangled.