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Wireless Cuts the Cord
November 01, 1999
by Joanie Wexler
For years, the mobile data market has been becalmed in the waters of a few vertical
industries like field service, trucking and public safety. However, technological
advances and increased public acceptance might put enough wind in the sails of
wireless data networks to finally propel them into horizontal business and consumer
markets.
After several false starts in the mid-1990s, the wireless data market is expected to boom, primarily
because of the growing reliance on the Internet for inexpensive access to e-mail, intranets and
electronic commerce. Meanwhile, people have also become accustomed to the freedom of making
mobile phone calls and picking up voice mail remotely. For such road warriors, blending these tasks by
using their mobile phones for Internet and intranet access and wireless e-mail is not a big psychological
leap.
"The influence of the Internet is solidifying the concept of wireless e-mail in the professional user's life,"
says Roberta Wiggins, director of wireless and mobile communications at the Yankee Group, a market
research firm.
The technology advances come in the form of lighter, cheaper mobile phones and faster networks. Due
to its scalability and potential for higher speeds, code division multiple access (CDMA) is the preferred
technology as the worldwide wireless platform of the future, analysts say. Sprint PCS and many other
network operators--including Bell Atlantic, Canada's Bell Mobility, GTE Wireless and Vodafone
AirTouch--run their digital wireless voice services using CDMA technology.
To be successful this time around, though, wireless data service providers face a challenge that has
plagued them for years: achieving near-ubiquitous network coverage. Few businesses find wireless
services useful if they cannot be used from virtually anywhere.
"We have a great interest in mobile data for intranet applications, tracking and investigative activities in
the field," says Tim Patterson, program manager of postal radio frequencies at the United States Postal
Service (USPS). "Historically, though, network coverage has not been broad enough for us to make
large investments worthwhile."
Why a Potential Comeback?
Customers are more attuned to the merits of wireless data than they were a few years ago, especially if
carriers can offer the right dynamic mix of coverage, cost and ease of use. In addition to providing
access to stock quotes, reservation systems, weather and other information, the latest mobile networks
promise that customers can perform most of the same functions on the go that they do in their home or
office.
"My criteria, in order of priority, include broad network coverage, ease of use and cost," says one
corporate telecommunications manager. "Coverage applies to geographic service availability--the
more, the better--and to the number and diversity of services that can be accessed from the wireless
devices."
From the carrier perspective, network operators are turning their attention to wireless data as a way of
generating additional billable traffic across their networks. Many U.S. personal communications
services (PCS) operators must recoup huge investments in 1,900MHz-frequency PCS spectrum and
infrastructure equipment.
"Increasing network use with value-added services such as Web browsing and short messaging
functions is becoming very important to carriers," says Eddie Hold, senior analyst for wireless services
at market research firm Current Analysis. "To survive, carriers must find ways to generate new revenue
and hold on to the high-volume business user as the cost of voice calls comes down."
For these and other reasons, research firms predict a resurgence in wireless data communications over
the next few years. The Yankee Group estimates that the number of North American mobile data
subscribers will more than triple between 1999 and 2002, from 3.4 million to 10.9 million. According
to Current Analysis, the worldwide market for mobile data services will generate about $6 billion in
revenue by 2002.
Wireless Cuts the Cord
page 2: Wireless Data Drivers
Historically, the growth of wireless data communications in the horizontal business and consumer
markets has been stunted by technology limitations, among them the weight, size, cost and battery life
of mobile devices; conflicting network standards that limit a subscriber's coverage area; and, until
recently, the high price tags attached to wireless network services and associated "roaming" options.
Another deterrent to corporate adoption has been mobile data network speed. Most established
nationwide networks from providers such as American Mobile Satellite and Bell Atlantic Mobile
(formerly RAM Mobile Data) run at 4Kbps to 9.6Kbps, making certain bandwidth-intensive
client/server and Web applications difficult to deliver to mobile workers. But, says the Yankee Group's
Wiggins, "networks are getting faster and more reliable, and subscriber devices are becoming less
expensive and more user-friendly."
For example, today's 14.4Kbps circuit-switched CDMA networks use compression algorithms to
boost throughput to as high as 30Kbps. Also, 3Com is scheduled to begin shipping packet-switched
CDMA infrastructure equipment late this year that allows uncompressed network speeds up to
64Kbps--the industry's fastest to date.
In addition, the mobile devices themselves are getting cheaper,
smaller and "smarter." Battery life has been extended to nearly a
month on some models compared with several days in many devices,
and the weight of some wireless phones has dropped from about 9
ounces to as little as 3 ounces. At the same time, prices for the
phones have plummeted from about $1,000 a few years ago to as low as $99 today.
Several other developments are driving the mobile data services market as well, including Mobile IP,
the Wireless Application Protocol microbrowser standard, a version of Windows CE for wireless
devices and a Microsoft-backed outsourcing service for wireless applications.
Forthcoming deployment of Mobile IP. Support for Mobile IP, a standard proposed by the Internet
Engineering Task Force, will enable traveling subscribers to have e-mail pushed to them automatically
without having to dial up a server, regardless of their physical location. Users will be able to roam
within and outside of their enterprise networks while maintaining their home Internet protocol address.
According to Ben Cardwell, director of product management for 3Com wireless carrier systems, the
company will support Mobile IP in its upcoming CDMA infrastructure equipment, enabling CDMA
network operators to offer "connectionless" services. "The user's phone 'goes to sleep' when no
communication is taking place," explains Cardwell. "This conserves battery life." Another advantage is
that subscribers will pay usage fees only when the devices are communicating.
Forthcoming implementation of the Wireless Application Protocol (WAP). An important
"microbrowser" standard now under development, WAP will streamline Web-based information so
that it runs more efficiently over lower-speed links and on smaller displays. WAP increases throughput
by stripping out the images in downloaded Web pages and other graphics-rich files and delivering text
only. No commercial implementations of WAP are yet available; existing services typically use WAP's
proprietary predecessor, Handheld Device Markup Language, to do the job. WAP-based browsers
are expected to appear in late 1999 or early 2000.
Microsoft's blessing and IT buy-in. In addition to developing a microbrowser for Windows CE,
Microsoft has formed a joint venture called Wireless Knowledge with commercial CDMA inventor
Qualcomm. Designed to spur the use of wireless data services by corporate customers, Wireless
Knowledge will provide outsourcing services to enterprises for authorizing and authenticating users of
wireless virtual private networks (VPNs). The services will relieve IT departments of the burdens of
configuring wireless implementations and worrying about security.
"Such developments should help mobile data gain IT mind share, which has been sorely lacking," says
Andrew M. Seybold, veteran wireless analyst and editor in chief of Andrew Seybold's Outlook.
Wireless Knowledge's wireless VPN, Revolv, is in trials now and will be commercially available late
this year, says Dave Whalen, vice president of sales and marketing for the company. Revolv runs
independently of a network operator's underlying airlink protocol. In other words, it supports all types
of PCS networks--those based on CDMA, time division multiple access (TDMA) and Global System
for Mobile communications (GSM) technology.
Wireless Cuts the Cord
page 3: Heating Up
The latest generation of wireless data services has begun rolling out, albeit a few months later than
originally expected. Sprint PCS, for example, plans to make its Wireless Web service available across
its nationwide 4,000-city digital network in late September 1999. It will enable a CDMA phone
customer to access the Internet directly using a stand-alone handset with a display. Alternatively, a
subscriber can plug a CDMA phone into a laptop computer or personal digital assistant and use the
phone as a surrogate modem. Bell Mobility is already offering a CDMA wireless data service, and the
other CDMA providers are expected to deploy services within a few months.
Wireless data network services based on other technologies are lagging CDMA's progress. For
example, 115Kbps services will emerge in the middle of next year for GSM networks, says Seybold.
"But there won't be any handsets that can interface with those networks till mid-2001, which sort of
defeats the purpose."
For subscribers to CDMA networks--about 8.8 million in North America as of March 1999,
according to the CDMA Development Group, a worldwide consortium--service costs will continue to
fall, a selling point for business users focused on upping their productivity. When added to an existing
wireless voice plan, Sprint PCS' CDMA services start at $9.99 a month for 50 minutes of wireless
data access and 50 Internet downloads from Sprint PCS partner Yahoo, says Charles Levine, chief
sales and marketing officer at Sprint PCS. Or subscribers can purchase monthly packages running
from $59 to $179 that combine both voice and data minutes.
But the real competition--among CDMA network operators and those offering mobile data services
based on other technology platforms such as TDMA (the underpinnings of the AT&T Wireless
network) and GSM--will come largely from the breadth of data network coverage and value-added
services an operator offers. On the coverage front, for example, Sprint PCS claims a competitive leg
up because its service will reach all 280 U.S. metropolitan service areas right out of the chute. This
may sound impressive, particularly compared with other carriers' deployment plans (see "Wireless
Data Services Road Map," page 202). However, subscribers that need access to rural areas will
frequently find themselves without coverage.
"We are on every Main Street in America," notes the USPS' Patterson. "So availability just in the
metro areas would provide only a partial solution for us."
For its mobile data needs, the USPS has deployed some pockets of the Ricochet service from
Metricom. While robust, the service has a couple of major drawbacks: It has been limited to just a few
markets, and it is a proprietary technology. But a recent $600 million investment in Metricom by MCI
WorldCom and Vulcan Ventures could be a shot in the arm to funding Ricochet's national rollout.
Through an agreement with Metricom, MCI WorldCom is planning to distribute Ricochet across the
United States.
"We're thrilled about the MCI WorldCom-Metricom relationship for the coverage potential," says
Patterson.
No Quick Uptake
While mobile data still has much to prove--particularly in terms of broader coverage--its time seems to
be ripening. Network speeds and service footprints will become less of a stumbling block as
technological advances and standards dovetail, say analysts. For example, within two to five years,
CDMA-based third-generation mobile networks will evolve to offer 2.4Gbps speeds. Intercountry
roaming will also emerge. Today, international travelers must use different phones and modems that
support the network technology and frequency adopted by the nations they visit, but future data
network subscribers will be able to use their wireless devices as they roam from country to country.
As all the pieces fall into place, data-network operators and customers alike will eventually gain a rich
set of revenue-generating and productivity-enhancing options in wireless data communications. But
acceptance will take place over a period of years--not overnight.
Joanie Wexler is a Campbell, Calif.-based writer and editor focused on computer networking
issues.
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