4G hype: Time for a reality check
Wireless carriers tout a new wave of wireless technology but it will be years before most consumers benefit — and before carriers make money.
4G Phone: Samsung's Mondi device operates on WiMax networks. Image: Samsung
Verizon Wireless, a joint venture of Verizon (VZ) and Vodafone (VOD), last week announced it had completed data "calls" using its flavor of so-called 4G technology, a new generation of radio upgrades that promises to improve the throughput  and capacity of wireless phone networks.
Rival Sprint Nextel (S) immediately responded with a flurry of news releases touting its 4G network, which uses a competing technical standard. Â In proclaiming its ability to deliver peak downlink speeds of 10 Mbps, one release gushed: "At these speeds, Sprint 4G breathes new life into wireless Internet."
Um, wasn't that what 3G was supposed to do?
Okay, that was a little harsh. But some analysts say the wireless carriers and their suppliers are hyping 4G technologies way before the services –and devices–are ready for prime time.
Indeed, many carriers globally still are building out their third-generation networks, and are only now starting to see returns on their investments, which included substantial payments for additional spectrum licenses.
3G all over again?
"Yay, Verizon made a test call on LTE," deadpans Jane Zweig, CEO of the Shosteck Group, a telecommunications consulting firm. LTE stands for Long Term Evolution, and it is the technology Verizon and many other incumbent phone operators are using to transition to yet another generation of broadband networks.
Zweig, whose firm has predicted that global wireless giant Vodafone won't make a return on its 3G investment (including spectrum) until 2013, sees 4G as a replay of 3G: a long, painful slog that will take many years to get up and running–and many more after that to produce financial gains for the carriers.
"Let's replay 3G," she says. "Where are the devices? What is it that people are going to do?  How much is the build out going cost? What's the resturn on investment. Is this a vendor dream or a carrier's nightmare?"
The carriers' 3G experience in the U.S. and abroad certainly offer clues as to how long it will take for 4G to become pervasive (and useful) to consumers.
When carriers started rolling out 3G systems in the early part of the decade–Japan's NTT DoCoMo (DCM) in 2001 became the first operator of a 3G network; Verizon followed two years later as the first major carrier in the U.S. to offer 3G–there was a lot of excitement (ample press releases, white papers and briefings by breathless executives) but not a lot for consumers to do with the network.
Some road warriors procured wireless data cards to hook their laptops up to the new network, but the first wave of 3G phones didn't offer much of a multimedia experience.
If you build it…
A few executives at U.S. wireless operators admitted at the time that 3G mainly allowed them to handle high volumes of voice calls at peak times. Not exactly what the futuristic data network was intended for.
Along came Apple's (AAPL) Â iPhone: More than five years after 3G launched in the U.S. consumers finally had a device that showed them the power of mobile broadband networks. (Ironically the first iPhone ran on AT&Ts (T) less robust EDGE network, sometimes referred to as a 2.5G network.)
Other 3G devices started hitting stores, and today there's a real consumer case for 3G: almost a decade after carriers pledged billions of dollars to acquire wireless spectrum and build out networks. And, still, as Zweig and other analysts point out, 3G coverage in the U.S. remains spotty and service problems persist.
Will 4G help? Many operators (and the vendors that hope to sell them expensive new gear) are already touting 4G as the solution to issues of data overload they are now facing as consumers spend a growing amount of time downloading applications and doing heavy-duty computing on their mobile devices.
But as with 3G, fully formed 4G systems–the networks, the devices, the applications–are years away. Telecom executives like to quote the 1989 movie Field of Dreams: "If you build it, they will come." They'll come, alright, just not any time soon.
The comment on the government's role in the spectrum is totally unfounded. Read up on the spectrum and how it's divided an why it is sucha challenge to manage – especially with the absolute need of military communications – government influence is essential
One of the big cost factors is licensing fees for spectrum. We need to get the govt. out of this business. Licenses should be awarded to the most competent players that can actually execute on a defined timetable and charge just a minimum fee so the carriers actually have money to build it out, and we can more rapidly advance the network to the consumers benefit. The current system is insane. Of course there needs to be some balance in who gets spectrum and maintaining open standards so that the whole industry prospers.
The 4G network can piggyback off of the 3G network until they complete the buildout of the 4G. I would not say years away as far devices and applications. I think you will be surprised how much faster this generation will move as compared to the 3G. The people are getting smarter with their smart phone. Intel, Google, Vz, Comcast, AT&T, Sprint and all the applications will be there when they come. Build it and they will be there. This technology will not change what we are already doing, only make it faster.
4G (WiMax) is here and moving right along. Sprint is the only wireless carrier so far that has major cities on 4G (WiMax): Atlanta, Charlotte, Chicago, Dallas, Ft. Worth, Honolulu, Las Vegas, Philadelphia, Portland and Seattle. In 2010, Sprint 4G will rollout in Boston, Houston, New York, San Francisco and Washington, D.C. There are some serious heavyweights backing the 4G (WiMax) technology, namely Intel, Google, Time Warner, Comcast, Cisco, Samsung, and Clearwire to name a few. I'm sure the likes of others big companies will join. Sprint's 4G infrastructure buildout so far has been the most aggressive among the wireless carriers. I expect Sprint 4G wireless handsets (Smartphones) to follow shortly.
Sprint's WiMAX IS being deployed right now, in major cities and has devices and support from major players. So how can you say it's years away.
4G is a along way from coming? I signed up with Sprint's 4G service in Baltimore and the service is increadible. Sprint says its 4G service is WiFi the size of a City. That is so true… I cancelled my my cable modem service and dont need to look for and pay for wifi hotspots since I can use Sprint 4G everywhere I go… the other night I was watching a HD movie on HULU and was shocked of how well wireless data over Sprint works. At the same time I was able to keep up email and other things running sumultaneously. Sprint's 4G is based on the wireless Internet Model and I can run any apps and now Multimedia applications such as remotely video monitoring my house for security, video conference and use Voice over IP service from skype with friends etc all for nothing!
3G networks are maxed out and carriers cannot keep up with the demand… so not sure where this person is getting their information. Verizon was not the first 3G network in the USA…that was Sprint that built the first 3G network and now is announcing commercially available markets on 4G. Here in Atlanta Sprint launched yesterday! I signed up and the service ROCKS! My iPhone is a brick costing me $146 per month but now with my sprint 4G wireless hub my iphone rocks. I am considering the Palm Pre with Sprint anyway since it costs less than $75 monthly for a better experience overall than iPhone with ATT.
Anyway, I also am saving since I cancelled my DSL at home and now using sprint 4G and saving there..plus I can take Sprint 4G anywhere in Atlanta with me where my dsl at home sitting idle all day has NO VALUE to me.
cant wait till Sprint lights up Florida so my condo is covered too…
Stephanie,
With all due respect, you guys need a bit reality check while writing such articles.
"But as with 3G, fully formed 4G systems–the networks, the devices, the applications–are years away."
I am not sure what you meant by that ?
The carriers are ready SPRINT has rolled 4G in Baltimore , Atlanta, Vegas, Portland.
Verizon is rolling LTE next year.
Regarding devices,
they are ready long time back
http://www.engadget.com/2008/10/10/htcs-first-wimax-enabled-handset-revealed-t8290-from-russia-w/
Please learn more by clicking the links
http://www.htc.com/www/product/max4g/overview.html
https://www.nokiausa.com/find-products/phones/nokia-n810-wimax-edition
Regarding applications , you probably need to get yourself familiar with all the web2.0, cloud, widgets, …..
They are ready.
The only question is the price point.
You ignored it.
Neverthless a good article.
I think 4G will be a big hit. It took the iPhone to show the tech industry the possibilities of mobile internet devices. Now that the bar has been raised the problem that is arising is bandwidth. If you really think about it this is the same problem that occurred with regular computers and the internet. Once companies really saw the potential of the internet consumers had to upgrade from dial-up to broadband to utilize the new features. Wireless isn't just about cell phones this time. There are a large number of devices that can be made to operate on the 4G networks. Also with Verizon planning to make their network an open network 4G looks promising. When 3G came out there wasn't the technology to compliment its capabilities, but 4G does not have that issue.
Ryan in Peoria, IL – Switch to Sprint…they have had 3G in Peoria for over a year now. You mention no 3G and incompete EDGE coverage, which leads me to believe you have ATT. Make the switch.
I think the industry is clearly getting ahead of itself. 3G isn't even running at full capacity across the country. The providers need to get 3G running reliably and blanketed good before putting money into 4G. Slow down, quality first.
I love how no one ever mentions backhaul, just the optimal up/down speeds from the tower, but as iPhone users in NYC will tell you, those optimal speeds are nowhere near reality when you have a ton of active users on the system. Also, this is in a 3G world where data usage patterns on even iPhones are nothing compared to what people do on aircards/USB modems, which will likely be the biggest device for 4G initially.
So its great that VZ is putting in 4G, but unless they're also investing a commensurate amount in more cell sites and backhaul (alas outside the cities its still mostly T1s), I wouldn't start drooling over that 10Mbps down number yet. This could be where Clearwire has the upper hand in the 4G game since they're doing backhaul in-house via microwave which could help throughput tremendously, especially during peak load times.
The issue with 3G or 4G is not demand, it's the technology itself. The claimed data transfer rates are lab test results in controlled lab environment with a single user or a very limited number of users.
All of the theoretical data transmission rate breaks down faster than you can say "dou" when you put the real life situation in place where highly concentrated number of users compete for the same chunk of licensed frequency.
It's law of physics, folks, there's a finite mount of data that can be carried by a given signal spectrum bandwidth (Shannon's limit), no amount of technology, coding technique is going to change that. That means with a fixed amount of RF spectrum for each carrier, there just isn't enough to provide high rate data service to a user pool of any significant size. Unless each carrier can get more RF spectrum (which is simply just not available), high data rate wireless service in celluar band is just pipe dream. Large number of users each at 10Mbps demand serious amount of RF bandwidth, and the RF bandwidth is just not available or affordable to any cellular providers. The more advanced the coding technique, the more interference prone it inherently becomes, which means it will demand more cellular towers, and more spectrum in order to serve a fixed number of users. But more tower and larger RF spectrum only make the interference issue worse, so the vicious cycle continues.
I won't hold my breath for any signficant 3G service to be available much less 4G (at least in a large country like USA) any time soon (I'd say 2013 is even an aggressive goal for 3G, 4G, not less than a decade and ot without serious remapping of the RF allocation). The cost of providing the coverage and getting the RF license is simply prohibitive, or the resource is just not available (RF bands).
"And, still, as Zweig and other analysts point out, 3G coverage in the U.S. remains spotty and service problems persist."
Huh? That statement couldn't be farther from the truth. Both Sprint and Verizon run 3G (EVDO, REV A) on 99% of their respective sites, so if you are in either provider's coverage, you have 3G. PEROID. I am a huge user of Sprint EVDO and love the piss our of it. It is so nice to have a small, USB data card that I can use on just about ANY Windows-based PC. AT&T's 3G has the potential to be faster than the current EVDO standards, but AT&T doesn't have 3G everywhere, and they have more service issues.
I really wish writers would talk to the providers before they write articles like this. Wireless 3G data is becoming a staple in the US business and consumer marketplace, and 4G will simply build on that and make it better, faster and cheaper in the long run.
Interesting article. I think it's coming sooner than you think.
The demand is there. Smart phones are driving the demand.
3G profits to providers should be ramping. I'm going long VZ and T and the darkhorse, MOT.
Thanks
4G is here to stay and those that deploy sooner will definately reap the rewards. The team behind Sprint's Wimax is as good as it gets; Intel, Google, Comcast, Time/Warner, Cisco and Samsung.
Great title, but not much substance. I would have liked to see a real evaluation rather than a critical review of a waning technology that is going to have to be improved if customer experiences with newer products like mlb,nfl-tv, blockbuster, netflix and the like are to be maximized. I want to know which technology platforms are best? Which companies are most poised to take advantage of that fact? Who has the best deployment plan? How long b/4 there might be a "real" 4g?
Thank you Stephanie for the reality check. 4G is way over-hyped and many areas of the US are still wondering when 3G is coming to town.
"They'll come, alright, just not any time soon."
Maybe. But maybe not. As you put it, 3G was out there for 5 years, and then – "…along came Apple's (AAPL) iPhone…."
I'm one of those old enough to have bought an original Mac in 1984. It had 128K of RAM, and everyone thought that it was crazy to have that much ram!
Bottom line: Once again Apple has changed the name of the game. Ergo, the old rules no longer apply.
I disagree. Consumers are hungrier for faster data now and will provide the demand to get it rolled out faster
Your piece would have been of more value to readers had you listed a few of the planned benefits of 4G over 3G.
Sure, you have to plan for the future, but today's future isn't 4G, it is still 3G.
My brand new iPhone 3Gs is my first smart phone. AT&T's service map showed I was well within their 3G service area.
I could be polite and call that a misrepresentation, but it would be much more honest to call it a lie.
3G, on the rare occasions I can find it, works okay. The EDGE network, which is what is actually out there, is dial-up reborn. Painfully, painfully slow.
Believe it or not, I'm happy with my iPhone. Just last night, while traveling, I was able to search for an address that I could never have found without an internet connection. It took ages, but it worked.
I'm not at all happy with AT&T. They suckered me, and I'm sure they suckered many, many others. 3G was the future, and for many of us it still is.
I'm resigned to waiting years for reliable access to 3G. Talking about 4G just strikes me as silly.
Not a real intelligent article really. LTE is cheaper to operate than 3G (at least EV-DO). Oh and did you know Verizon and other CDMA carriers don't use EV-DO for voice use? (Thus the turn DO aka data only).
Well, everything you download thru your cell phone, all the files you send across, watching videos, watching sports, tv, news, etc., downloading music, listening to web radio while driving, using GPS on yr phone – all this was enabled by 3G – why are you hating on 4G?
What happened with 3G is not necessarily true when it comes to what might happen to 4G. The consumer and businesses were not ready for 3G however 4G is a different matter. There are plenty of businesses that see substantial potential in the merits of 4G. 4G will allow content providers a new venue to sell their wares and should bring the Telcos on a level playing field as the cable providers. The latency associated with 3G made it impossible for many businesses to compete with the cable providers however 4G is a different matter. To date its seems Sprint is the only company that has spent significant sums to outlay their 4G platform. If Sprint continues outlaying its 4G network ahead the likes of ATT, I see many businesses switching over, enabling Sprint to capture many of its former customers.
Your article states that the Japanese carrier had 3G in 2001, and that Verizon had theirs "two years later." Sprint launched their 3G network in 2002. Check it out. Where's the love for Sprint?
What good is a 4G network if any provider can't even provide 3G or hell even complete EDGE coverage everywhere in the Nation's top 50 metro areas (Peoria is #47 and has no 3G coverage).
Very good article. There are several companies, such as zero1, and FDI that are touting 5g technology. I am glad that those rumors can be put to rest.
I just wanted to point out one thing about the 3g 4g networks. As a person who has worked in tech support for both att and sprint. I have studied for years the ability to transmit faster service. I wanted to make a few points just for thought.
#1 the iphone. The i phone will never be able to have the capabilities that it suggests as att has still not caught up with the times in terms of their network. They are still running an average of about 300kbs. In terms of speed it is technically broadband…but when compared to sprints EVDO rev-A and their current 3mbs….as the saying goes…"they aint got S#%T."
2) Sprint may have not made any "test calls" but the 4g network has been a work in process years before verizon even thought about gearing up to put up a tower. Already 4g will be available and active in at least 12 major markets by the end of this year. Now a majority of this will be used in data cards but major players such as samsung and LG have already commited to making it available in a mobile phone by the middle of next year.
These are exiting times…previously failed features such as ATT real time video sharing will now have a fighting chance on such a network. Things like mobile tv have the ability to be called "actual tv." Immagine having a reliable VOIP service that wont take up your minutes. ITS INCREDIBLE.
My personal thoughts…..
I might be out on a limb but lets immagine for a second that the nation is covered in 2012 by 4g networks. Instead of buying cell phone minutes. You only have to buy a mobile data package. 4g networks have expanded to a point where you have only VOIP with features like Google Voice to back you up. I know this seems insane…but 3 years ago even….if you would have told me i could do things on the internet as fast as i could on home DSL….I would tell you your crazy! But it happened. I just did a speedtest at sprint.com/speedtesst and got 1.5 kbs on a datacard.