The New York Times
July 10, 2000
Cellular Phone Carriers Untangle a Wireless Web
By SIMON ROMERO
Back in Reykjavik, Skuli Mogensen saw the wireless Internet craze
that was sweeping his native Iceland and had an inspiration: Why
not try to export the revolution by taking his company's software
for mobile wireless devices to the United States?
Photo Credit:
Philip Greenberg for The
New York Times
Photo caption:
Nortel's experience in optical networks has helped it become a leading
builder of wireless networks, which must be able to interact with
wireless systems. Above, a Nortel crew installs an optical network for
a client, Fibernet, at 60 Hudson Street in Manhattan.
_________________________________________________________________
So he has been preparing his company, OZ.com, to be a
trans-Atlantic wireless contender."I had no doubt this thing will
explode in America," said Mogensen, 31, who incorporated OZ in San
Francisco. "The U.S. market has relatively high usage of the
Internet, PCs, cable modems, Palm devices and cell phones, so why
shouldn't the wireless Internet be used to unite all of these
things?"
It is far too early to handicap the chances for OZ, which recently
received a large equity investment from Ericsson, the Swedish
telecommunications company. OZ is but one of many hopefuls in a
free-for-all involving dozens of other start-ups and large
telecommunications companies to develop and promote access to the
Internet. And like the migrating Mogensen, the wireless Internet
craze is coming to the United States from overseas -- primarily
Europe and Asia, where for various reasons the trend took hold
first.
The wireless Internet, which provides Web access on devices like
pagers, cell phones and Palm hand-held devices, is being promoted
as the most promising technological development since the Internet
itself started taking off in the early 1990s. In two or three
years, there are expected to be almost as many wireless Internet
users worldwide as people accessing the Web on wired PCs. But given
the current state of play in the industry -- and some distinct
technical shortcomings -- can the wireless Web live up to its
billing?
The answer may depend on the ability of companies to wade through a
morass of competing technical standards in their efforts to make
wireless Web access faster and more convenient. And at least in the
early going, American consumers will find that wireless Web surfing
is a slow, bare-bones experience bearing scant resemblance to the
hard-wired version.
"We're in the euphoria phase right now, where the future seems very
bright," said Jane Zweig, executive vice president of Herschel
Shostek Associates, a wireless research firm. "But pretty soon
we'll get to the pain phase, when the complications of the wireless
Internet will become apparent. Then it'll take a while to get to
the pleasure and perfection phases."
Consumers in this country can already glimpse the wireless
Internet's potential through applications that enable them to get
stock quotes, check the weather or send short text messages over
their mobile phones or other devices. And judging from experiences
in Europe and Asia, Americans have only started to scratch the
surface.
In Japan, teen-agers download still cartoons on services provided
by NTT DoCoMo, the country's leading wireless company, whose mobile
Internet customers account for 30 percent of Japanese Web users. In
Italy, daily horoscopes are the rage. In Finland and Sweden, one of
the hottest applications is a mobile banking service allowing
people to conduct nearly every banking transaction except
withdrawing cash.
Global growth estimates for the mobile Internet can be heady.
According to the ARC Group, a London consulting firm, about 100
million of the world's 500 million mobile phones in use by year-end
will be capable of Internet access. Within three years, ARC says,
an estimated 300 million of 900 million wireless phones will be
Internet-ready. Other industry forecasts say that in five years, as
many as 500 million people worldwide -- one of every dozen -- will
have phones or other devices capable of wireless Internet access.
Whether those projections are close to attainable will depend
largely on efforts now under way to increase the speed of wireless
Internet connections. For now, the fastest wireless speeds range
from 9,600 to 14,400 bits a second, much slower than the Internet
connections of up to 56,000 bits a second available to people using
dial-up modems on their home computers. (And, of course, other
kinds of wired connections, like cable modems or high-speed lines
are much faster still.)
Today's wireless speed limits mean that most wireless users in the
United States can do little more than send or receive a few lines
of Internet text through cell phones -- maybe reading a brief news
alert about the latest interest-rate decision by the Federal
Reserve, or sending a short e-mail message over a Yahoo or Hotmail
account.
Yet, nearly everyone in the wireless industry agrees that by next
year speeds approaching that of a typical home PC connection will
be available through wireless devices, allowing sophisticated
applications like the downloading of images.
"Speed is a temporary problem," said John Garcia, senior vice
president for sales and distribution at Sprint PCS, one of the
nation's largest wireless operators, which is busily adding
Internet access to cities throughout its network.
One reason wireless technology does not yet allow for more
sophisticated Internet applications is that companies in different
parts of the world have adopted different technological standards,
instead of rallying around a single standard that might ease
development of a common mass market for wireless Internet access.
Europe, for the most part, has adhered to a digital technology
known as GSM, which stands for global system for mobile
communications. In Asia, a mixture of standards is in use, with
CDMA, which stands for code division multiple access, dominant in
Japan and South Korea, while GSM is sporadically used elsewhere.
But it is in the United States where standards have been most
fragmented, helping explain why the wireless Internet has been
slower to catch on here.
AT&T uses a format called TDMA, or time-division multiple access.
Because TDMA does not support data transmission, AT&T has been
forced to overlay an older format to provide Internet access
through its cell phones, adding further complexity to its current
generation of handsets.
Meanwhile, other American carriers like Sprint and Verizon have
adopted CDMA. And still others, including VoiceStream Wireless and
Pacific Bell, a unit of SBC Communications use European-style GSM.
Unless special measures are taken to enable a phone to use several
of these formats, a device designed to work with one wireless
technology cannot be used on a network that employs another
technology.
Most creators of wireless Internet applications have compensated
for this technical Tower of Babel by agreeing to a format called
WAP -- for wireless access protocol -- which works with any of the
various cellular transmission formats. Any WAP-enabled cell phone,
used with any flavor of cellular network, can use the same WAP
application -- a wireless restaurant locator, for example, a
stock-quote system or some wireless Internet offering. (The iMode
technology used by NTT DoCoMo in Japan is not WAP compatible.)
Taken together, the disparate carrier standards are known as the
second-generation of wireless technology -- the first generation
having been the nondigital analog technology that the original
cellular industry rolled out in the 1980s. Over the next two to
five years, the global wireless industry expects to move to a
so-called second-and-a-half digital generation, followed by a third
generation. The differences can be arcane, but the coming
generations of formats are meant to allow for much higher data
speeds -- and to be compatible with one another.
Whether WAP continues through these next generations, or is
replaced by a new format for programmers who write the application
software, the next generations of wireless technology should make
it easier to roam from one continent to another with a single
hand-held Internet access device. And the ability to send larger
amounts of data may make the wireless Internet an option for
businesses and individuals.
"Sooner than you think, we'll be able to do videoconferencing with
wireless access," said Anil Khatod, president of global Internet
solutions at Nortel Networks, the maker of network equipment.
Along with Nortel, companies like Ericsson, Motorola, Lucent and
Nokia are competing for tens of billions of dollars of contracts to
build new generations of wireless networks. Last year, the value of
wireless infrastructure contracts worldwide reached $28.7 billion,
a 22 percent increase from 1998, according to the Cahners In-Stat
Group, a research firm. Some of those companies, along with others
like Palm, Research in Motion and the Swatch Group, are developing
new types of devices for sending and getting wireless data and
images.
"We are coming up with things that will make your head spin," said
Lawrence Rabiner, vice president for research at AT&T Labs. One of
AT&T's projects under development is a pair of Internet-accessible
ski goggles with a built-in wireless phone that would allow skiers
to hold conversations, transmit a video of their downhill descent
or pull down a course map projected onto a visor. "It's James Bond,
'Mission Impossible' stuff," Rabiner said.
Of course, there are big questions about how many new mobile
Internet services people really want, and how practical it will be
to provide or to use the most exotic applications.
"Obviously the whole wireless Internet nirvana hype sells a lot of
papers," said Mark F. Bregman, who as head of pervasive computing
at IBM is working on third-generation and even fourth-generation
wireless technology. "We need to realize that the wireless Internet
is not a panacea, that some things like doing video on a cell phone
would be impractical because video hogs so much bandwidth."
To be sure, there are concerns about the amount of available
radio-wave spectrum that can be used to transmit wireless data. And
some industry executives worry quietly about whether some consumers
might get turned off at this early, homely stage in the industry's
development.
But despite such qualms, many new participants are entering the
wireless fray -- including Brad A. Silverberg, a former
high-ranking Microsoft executive who led the company's Windows
business. In March, Silverberg and former executives from McCaw
Cellular formed the Ignition Corp., an investment firm focused
entirely on wireless Internet ventures.
"This is a huge wager we're making, but my instinct tells me the
wireless Internet is the next tech tidal wave, like the PC and the
Internet itself," Silverberg said. "Will we win the bet? If you
judge our chances by the number of people and amount of resources
committed to this thing, I'd say they are very good."
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