It’s Business As Less-Than-Usual For Wireless

Lots of companies are looking for the killer app in the wireless world. But wireless is the killer app. Despite the bleak economy, wireless developments and adoptions will flow— though at a slower pace.

CELL PHONES • The core trend of completing the installation of 3G cell-phone capability remains on target. Companies like AT&T and Verizon already have most of their main sites 3G-capable, deployed with HSPA technology. Sprint is still working on it and T-Mobile is getting going, though the downturn will slow that rollout. With handset saturation in the U.S., operators are anxious to get their 3G data capability in place to take advantage of the latest smart phones and boost revenue with new data services.

However, serious delays are expected in the installation of Long Term Evolution (LTE), the 4G technology adopted by most of the world’s carriers. The standard itself is expected to be finalized in 2009. With most major vendors already designing LTE equipment, and LTE handsets in the works, functioning systems were expected in 2010. With the downturn, it will most likely move out a year or so.

That may be good news to carriers, as they will get a better return on their 3G investments by extending their life a few more years. Some companies actually say the more advanced 3G technologies like HSPA+ are so impressive that LTE may not be needed for a long while.

There will be less growth for handsets, though. Consulting firm Ovum expects mobile connections and revenues to rise only 6.3% in 2009. Others project new wireless subscribers to drop to about 7%, which is less than the two-digit growth of the past few years.

Nonetheless, the smart phone will continue its penetration. Currently, smart phones number about 26 million units, or about 16% of recent mobile handset acquisitions in the U.S. A steady stream of new models like the HTC Google Android G1 are arriving. The Sony Ericsson Xperia X1 and the Samsung Instinct also will give the Apple iPhone and RIM BlackBerry models some competition. Look for increased penetration into the replacement market.

Applications like mobile search, Internet access, and location-based services will move forward, but moderately. Mobile TV will be delayed, though there’s some progress toward a version of the U.S. ATSC standard, which can be received by cell phones equipped with an appropriate tuner. Machine-to-machine (M2M) cellular applications will also make steady progress. The applications use the cellular system to monitor and control remote items. For example, M2M is widely deployed in interstate trucking companies and is increasingly being deployed in industrial applications for sensor monitoring and even remote control. Home uses include security like video cameras that can be called up and monitored on cell phones worldwide.

M2M hasn’t had the visibility of other more glamorous applications like mobile TV, but it’s seen solid growth. Older, slower data technologies like GPRS and 1xRTT are fast enough for most applications. ABI Research estimates that 95 million M2M modules will ship in 2013, representing a significant ramp up. About 34 million of those modules are expected to go into telematics (vehicular use) and 39 million modules into telemetry (monitor and control).

GPS will see greater use in smart phones. Most have it now, and more handsets will add it in the coming years. This should fuel the location-based services (LBS) market, which is still trying to emerge. Most LBS efforts have centered around E911 requirements, but that’s changing as E911 becomes fully implemented.

The femtocell is just about ready to hit the big time, but economics again may delay deployment. These miniature home basestations with backhaul through the consumer’s high-speed broadband connections promise not only better at-home cellular service, but also a competitive option to other broadband wireless technologies.

While all wireless operators are testing femtocells, the decision to deploy is still up in the air. How many subscribers have bad service at home anyway, and will the carriers admit that and then charge the subscriber for femto service? The lack of a broadband connection at home will also slow adoption. Finally, can the carriers and femto manufacturers make units that will not interfere with the in-place macro and micro cells?

Despite the downturn, carriers are expected to continue upgrading their backhaul networks. Up to now, most cell site backhaul has been via multiple T1/E1 lines. With the surge in mobile data applications and video, the backhaul systems are maxed out in many areas.

The solution is to replace the T1/E1 nets with IP/Ethernet connections with 10G fiber. Carrier Ethernet is emerging as a great solution where it can be deployed. Microwave Ethernet connections are also being deployed where fiber isn’t a favorable option. The good news economically is that standard Ethernet connections and equipment are affordable.

Finally, the movement to a more open architecture for phones and networks will continue. This means more opportunities for subscribers to select and use the phone they want instead of the carrier’s choices. It also means more third-party software, applications, and services outside those offered by the carrier.

Apple started this movement, but it’s spreading. Both AT&T and Verizon, the largest of the carriers, are moving in this direction.

WI-FI • Now into its twelfth year, Wi-Fi is the most stable and reliable wireless networking technology around. Many companies will begin upgrading to the faster and more secure 802.11n technology, which should finally be ratified this year. In the meantime, the Wi-Fi Alliance approved testing and certification of Draft 2.0 version of the standard.

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On other fronts, more smart phones are adopting Wi-Fi as an alternative way to access the Internet. Also, we’re seeing greater numbers of dual-mode unlicensed mobile access (UMA) phones that allow both cellular and Voice over Internet Protocol (VoIP) over Wi-Fi calls. Lower-power Wi-Fi chips are now available, too.

Don’t overlook the possibility of 1-Gbit/s Wi-Fi in the future. The Very High Throughput (VHT) study group is looking at standard possibilities right now. The idea is to move the development forward to form an IEEE 802.11 working group. So far, the 60-GHz band is being considered because of its very high-speed capability. But range is limited and wall penetration is practically nil. That’s why spectrum under 6 GHz is also being considered with special modulation methods as well as multipleinput multiple-output (MIMO).

WIMAX • This wireless metro-area networking technology has slowly but surely emerged from standards efforts and business model development. Sprint and Clearwire launched their Clear initiative and will see it expand over the next few years. The IEEE 802.16e-2005 mobile version of WiMAX can be used for voice using standard VoIP techniques, making it a potential 3G/4G cell-phone technology, though it’s doubtful that this will be a primary application.

WiMAX most likely will find a home in broadband connections both fixed and mobile here in the U.S. WiMAX is a real hit outside the U.S., as developing companies snap it up to substitute for non-existing wired telephone and broadband infrastructure. Look for data cards, USB modems, and embedded WiMAX in future laptops (see the figure).

BLUETOOTH • Like Wi-Fi, Bluetooth is well established and will easily survive the downturn. In fact, it turned 10 years old last year. While new advances are minimal, we may finally see Bluetooth 3.0, the Ultra-Wideband (UWB) version for higher speeds, appear later this year. Also, development is ongoing for an ultra-low-power version.ULTRA-WIDEBAND • Speaking of UWB, a Bluetooth version may be the only bright spot for this technology, which has not fulfilled its potential. Intel recently dropped its R&D funding for UWB. WiQuest, one of the major vendors of UWB chips, recently closed its doors. It’s been a rough few years, as chip vendors fought for business in the wireless USB sector and most funded a second generation of chips that could meet the needs of different spectrum assignments across the globe.ZIGBEE • There isn’t much new on the ZigBee front, but this short-range mesh technology continues to find new industrial applications. It’s particularly successful in the home and building control field and will find new applications in energy management. But several competitors have developed, such as Dust Networks and Z-Wave.

In the industrial market, the International Society of Automation’s new ISA100a wireless standard threatens ZigBee’s future. ISA100a uses the 2.4-GHz band with direct-sequence spread-spectrum (DSSS) wireless technology. It’s similar to ZigBee, but will simultaneously communicate with most popular wired comms protocols.

SPECTRUM ISSUES • Numerous radio spectrum issues could get solved this year, especially those involving the recently auctioned 700-MHz spectrum and the so-called “white spaces.” The spectrum abandoned by UHF TV between 698 and 806 MHz was auctioned off in August 2008.

AT&T and Verizon bought most of this spectrum to expand cellular service in the future. But a portion of it will end up in apps like high-speed wireless broadband using WiMAX.