March 19, 2004 12:57 PM PST
Tough sell for wireless data services
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What's new:
Wireless data services will take center stage at the CTIA show, as the cell phone industry searches for new sources of revenue to offset dropping calling prices.
Bottom line:
The lack of common standards and interoperability could cloud the future of cell phone data services and the higher-speed networks they depend on.
Better devices and higher bandwidth mean that wireless data applications--such as instant messaging on cell phones--no longer have to be a mind- and thumb-numbing exercise. But in the United States, the second-largest cell phone market in the world, it's still a lot more convenient to use a wired Internet connection.
"Data just isn't growing" for the wireless market, Gartner analyst Paul Dittner said.
Data services are shaping up as the central theme this year for the U.S. wireless industry's largest annual trade show,
Industry watchers said they are expecting a slew of announcements next week touting improvements in cell phone data services and the higher-speed networks they depend upon. But a lack of common standards and interoperability clouds the future for many of these.
Applications are central to the success of wireless data among consumers, executives have said. Among the applications slated for launch at CTIA is
In the services arena, Internet services company VeriSign plans to debut a product intended to secure business transactions made over cell phones, a feature that Vernon Irvin, an executive vice president, said is a key missing ingredient in mobile e-commerce. And equipment maker
On the voice front, handset makers are expected to announce new services that could extend the reach of popular "
Analysts also said to expect new push-to-talk phones that run on the GSM (Global System for Mobile Communications) standard, the basis of about 80 percent of the cell phones in the world.
Verizon Wireless, the largest carrier in the United States, will announce improvements to EV-DO, its "3G," or third-generation, wireless broadband service, sources said. It is expected to offer more details on the EV-DO adapters for desktops and laptops that it is planning to sell later this year and to unveil details about its $80-a-month EV-DO service
Microsoft plans to host its own wireless developer show next week in San Francisco, where it is expected to release an
Looming standards battles Despite the big wireless data push, analysts said major infrastructure issues could hold back services in the United States for years. Among other things, the region has yet to settle on a single cell phone standard--a problem that's likely to get worse before it gets better.
All of the major U.S. carriers are expected to renew their support for their
Bill Gough, a telecom industry manager in the Global Sales Organization marketing group at Sun Microsystems, believes there's a direct relationship between large amounts of wireless data revenue and the presence of a single unified cellular standard.
"In Asia or Europe, there's homogeneity of technology that allows you to have broad distribution of common services," he said. "In the United States, we have interoperable CDMA, TDMA, GSM, and each sometimes works in two or three different frequencies each."
Competing standards and interoperability problems could slow the growth of popular push-to-talk services, which are gaining acceptance among carriers around the world.
Most push-to-talk services currently use the CDMA and IDEN (Integrated Dispatch Enhanced Network) standards, but plans are in the works to extend support to GSM and to develop technology that would work with all of the major cell phone standards.
Mark Lowenstein, the managing director of
Pioneered by Motorola and Nextel Communications, push-to-talk allows only one person to speak at a time on a call. Although the service doesn't offer true two-way communication, it has taken off with business users because it can be cheaper and more efficient than standard cell phone service.
The arrival of GSM push-to-talk phones comes as some of biggest cell phone makers are working to develop multistandard support for push-to-talk, although interoperability problems between Nokia and the rest of the handset industry threatens to spoil the party.
Nokia, Ericsson, Motorola and Siemens decided in October to use the same push-to-talk standards and then to test their gear for interoperability--but the alliance seems to be fraying.
Ericsson executives earlier this week revealed that Nokia's push-to-talk products do not work well with network software from other suppliers.
"The Finnish vendor's interoperability issues possess damaging repercussions, since internetwork service could well be jeopardized were Nokia's (PTT) platform out of step with the rest of the industry," analyst Adrian Baschnonga wrote in a research note earlier this week from the World Markets Research Centre.
Nokia said in a statement on Tuesday that it will provide "a smooth network software upgrade path" for the technology.
EV-DO or EV-don't?
Next week should also see the cell phone industry continue its longstanding battle over wireless broadband standards.
EV-DV supports both voice calls and wireless data applications, while EV-DO can only be used for data sessions.
Verizon Wireless is among the biggest proponents of EV-DO, having
At 300 to 500 kilobits per second, the BroadbandAccess service now available in San Diego, Calif., and in Washington, D.C., can compete admirably as an alternative to wired Internet providers, according to Verizon.
"The decision here is clear," Lawrence Babbio, vice chairman at Verizon, said. "We'll be the first to launch a wireless high-speed broadband in major markets. And timing is everything in this business."
"There's a more efficient, better path, with EV-DV," Forsee told analysts this week.
The battle between competing wireless broadband standards has given another standard, called EDGE, room to grow even though it only provides bandwidth speeds of about 100kbps. EDGE was supposed to be a temporary step carriers would take before building the much faster 3G networks based on EV-DV and EV-DO. But it's lasted longer than many had expected, as carriers struggle to find the capital to buy 3G equipment.
"We see third-generation rollouts accelerating, but with EDGE as a complement," Karl-Henrik Sundstrom, Ericsson's chief financial officer, said.
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