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Where does 3G fit?

A range of choices.

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With 3G data facilities routinely built into laptops later this year, will the service displace the use of the Wi-Fi technology that is already built into them? That's the bold claim of 3G
operators. But are they serious?

The answer will depend mostly on the relative cost and convenience of the services, according to analysts. 3G currently offers up to 300 kbit/s, while Wi-Fi offers multi-megabit/s speeds; and although prices are notoriously hard to understand, 3G is definitely a more expensive option.

On the other hand, 3G is - or at least should be - available in more places. Is that benefit enough to tip the scales in its favour?

Convenience means coverage
3G will be so convenient, users will treat it as their default connection, says Mark Whitby, director of third party channels at Vodafone: "We ran a big user trial in the UK, and found that users would default to it."

The PC makers are, as you might expect, more neutral: "I think it will remain a combination," says James Griffiths, head of client products for Dell in EMEA. "Everyday email is manageable at 3G speeds, but people doing more demanding work will still revert to wireless LAN when they have got it.

"Wi-Fi is better for handling larger files and so on," he points out, "but I need to be on a reasonable connection at some point."

The biggest part of 3G's convenience is availability. While Wi-Fi networks are available at specific locations such as coffee shops and airport lounges, the idea with 3G is to make it available everywhere.

So far, the story on coverage is good, with operators quoting figures that imply a majority of people in the UK should be able to get 3G connections. However, the story is not simple.

Under the terms of the 3G licences, the providers must reach 80 percent of the population with 3G networks by the end of 2007. This means covering less than 80 percent of the landmass, obviously, as the population is concentrated in urban areas.

The 3 network, focused on voice and consumers, claims to have reached 80 percent a year ago. Orange claims around 70 percent, and Vodafone claims 60 percent. O2 and T-Mobile only claim coverage of major cities, but T-Mobile makes a good point about the others' claims.

"We don't quote a percentage for 3G coverage, because it's really misleading," says Rob Langton, data marketing manager for T-Mobile in the UK. "As you get further away from a cell site, the quality of the signal degrades. So you can technically have coverage, but on the edges of that coverage, the throughput speed is very poor - you may be better off with GPRS."

Price varies
Pricing is just as hard to compare. The prices are subject to change, and different options contain different extras, such as access to the company's Wi-Fi services. These links should take you to the current 3G data prices of Vodafone (£45+VAT for 1GB in the month), O2 (£75+VAT a month flat rate), Orange (£45+VAT per month, apparently "out of stock" at Orange - but available elsewhere - at the time of writing), and T-Mobile(£74+VAT, for 1GB in the month).

"Before we see significant uptake, operators need to sort out predictable costs," says Rachel Lashford, of Canalys. "There are flat monthly charges, but they tend to have a usage limit of 1 Gigabyte. Those details need to be sorted out."

Above the "fair use" level, 3G data tariffs tend to apply a "run-on" charge, but operators promise this will eventually go. "We see the market going to a fixed cost price," says Langton, "where you get the service and don't have maximum amount above which you get charged."

"We understand the need for predictability, and are trying to respond with our tariff plans," says Vodafone's Whitby. "We have a flat rate tariff, and pre-published roaming charges."

No one is talking about a price-crash for 3G services, though: "I think operators need tariffs to remain high, so their share prices are highly valued," says Lashford. "There is a perception of future revenue
opportunities, and operators are not prepared to let that go yet. They've set their tariffs at a level where they are waiting for service uptake."

The future's faster
The big boom in 3G may in fact not come till later, when the speed gets higher. HSDPA (high speed downlink packet access), sometimes called "Super 3G" or 3.5G, will arrive later this year, taking 3G networks to about four times their current speed.

Today's top rate of 384kbit/s will becomes 1.8 Mbit/s, with the usual caveats about speed dropping off with distance from the cell station. And, since HSDPA is an upgrade to existing 3G networks, its availability should pretty rapidly reach the same level as 3G.

"In the next couple of months, we'll have a new version of the card," says T-Mobile's Rob Langton. "HSDPA turns 3G into true mobile broadband, with speed comparable to a 1 Mbit/s ADSL link."

Lashford agrees that HSDPA may be the key and it will be sold to businesses first. "We will probably see card first approach," she says. "It will be promoted to business notebook users, and there will be data cards before there are phones."

The arrival of HSDPA could get some marketing messages in a twist though. Orange recently announced it was delivering an EDGE, an upgrade to its GPRS network that could give speeds like current 3G services across the UK.

While this is a very good move (that we've been asking for for some time), it may play badly in 2006. Why Upgrade GPRS when you can deliver 3G and super 3G? The answer is to get fast data where 3G is not going to reach: "I see EDGE filling in the gaps," says Lashford.

In the end, while 3G coverage may be good enough to distinguish it from Wi-Fi, the speed will have to be good too, to make it worthwhile.


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