WiFi, 3G or both?

At the height of the telecoms boom in 2000, network operators engaged in a vigorous bidding war across Europe to secure licences to operate next-generation 3G mobile services. These promised to satisfy all the voice and data communications needs for both businesses and consumers.

By late 2001, however, operators were struggling to find the funding to roll out 3G systems, and trials showed that the technology was harder to deploy than many had expected. By way of contrast, public 'hot-spots' based on WiFi (802.11b) technology were spreading across cities, providing a quick and relatively cheap way for businesses to give staff access to the Internet on the move. With so many hotspots available, some commentators began to ask: Is there even a need for 3G services?

In 2004, however, both sides of the debate appeared to moderate their positions. The realisation that the two technologies have different applications, and that they need not be mutually exclusive, has encouraged leading European mobile operators to begin to embrace WiFi (see box).

Cellular 3G services provide full mobility, and have near nationwide coverage; WiFi provides greater bandwidth, and is suitable for longer use in temporary, but fixed locations, such as in a hotel or airport.

WiFi still provides far higher data speeds than 3G. Today a standard 802.11b connection will run at around 5Mbps. 3G services, based on the European Universal Mobile Telecommunications Service (UMTS) standard, run at 384kbps. The next generation of mobile services, dubbed 4G, however, promises speeds of 1Mbps.

Ericsson has already tested High Speed Downlink Packet Access (HSDPA) networks running at 4.9Mbps in China, and it can theoretically support speeds of 14Mbps. As yet, however, no European operators offer HSDPA services and there are few firm commitments to launch.

Hotspot services will continue to evolve too, with operators upgrading access points to the 802.11g standard for higher speeds, and eventually to 802.16, or WiMax. This has the potential to reach speeds of up to 75Mbps with a range of 50km, raising the prospect of metro-area wireless services. But there are limitations. WiMax slows down when more users share the network, and fully portable WiMax equipment will be slower.

In the nearer term, enterprises will have to make do with a combination of WiFi, 3G and so-called '2G' General Packet Radio Services (GPRS) devices, with interoperability between them still limited. GPRS should not be considered outmoded: HP and Nokia are shipping handheld devices that support WiFi for high-speed data use on a wireless LAN or in a hotspot, and GPRS for use elsewhere. Few converged devices support 3G.

What businesses are already demanding, and what operators hope to provide, is integrated billing for all wide area services. In the UK, only T-Mobile offers combined 3G and WiFi tariffs; businesses should expect more operators to follow this lead, as the industry realises the standards can coexist.