The Big-G 2-Step, Success or Failure?

Wireless carriers have spent billions of dollars for licenses to secure their piece of the generational phenomenon — 2G and 3G.

In the case of 3G, it has yet to prove it can be more than a technologist’s dream. Analysts and industry theorists are making money hand over fist supplying interested observers with their rationales for the slow ramp-up. Some say it’s the lack of new applications; some claim it’s because of the lack of truly useful wireless Internet applications; some say it’s the lack of applications that are sensitive to the mobile environment’s unique characteristics; and on and on.

Keep in mind, this 3G scenario is a close re-enactment of the hype, hysteria, letdown and realism that was to become 2G. Initially, 2G was going to do everything conceivable on wireless devices because it was “digital.” In addition to this huge expectation, TDMA, CDMA and GSM systems were slow to roll out. By the time the air interfaces actually landed in the market, carriers admitted that aside from the digital moniker, 2G didn’t really provide the customer much. 2G just dished up more capacity for the carriers.

Despite all of the dark clouds above 2.5G and 3G created by pessimists without patience, the evolution of 2G networks will provide positive results for the wireless industry once the migration is complete, according to Allied Business Intelligence (ABI; www.alliedworld.com).

2.5G and 3G carriers are expected to realize almost $300 billion worldwide in subscriber revenues from an audience of more than half a billion subscribers in 2006. Likewise, infrastructure vendors will see more than $100 billion in infrastructure sales of 2.5G and 3G base stations through 2006.

“The key is realizing that this is an upgrade path in many cases, and the building of new networks by large carriers with a sizeable customer base in others,” said Larry Swasey, ABI president.

“In both cases, subscribers can be turned over to new services rather easily, but like any other evolution in technology, it will take some years to complete the transition.”