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To: Eric L who wrote (11856)	5/23/2001 2:44:16 PM
From: Eric L	Read Replies (1) \| Respond to of 34857

re: 3G v. Wireless LANs >> Business Case For 3G Eroding, Wireless LANs On Up Elizabeth Biddlecombe Total Telecom 23 May 2001 Merrill Lynch is the latest company to express doubts about the value of third-generation mobile networks, according to a new report noted on Wireless NewsFactor. The investment bankers said the potential of the technology is likely to be overshadowed by other developments. Firstly there are the delays in rollout as recently announced by DoCoMo and BT. Then there is the amount of debt being supported - the company puts the total at US$650 billion, of which $100 billion was spent on 3G spectrum in Europe. Perhaps most significantly the report identifies 2.5G technologies and the wireless LAN standard 802.11b (or WiFi as it is sometimes known) as being challengers to 3G. 2.5G provides always-on capability but at a cost of $3 billion (in Europe) compared to $250 billion for 3G. "The cost/benefit analysis and therefore business case for 3G appears to be eroding," says the report. "If 2.5G can deliver an always-on, 9.6 Kbps packet-switched cellular system for a $3 billion upgrade cost, the $250 billion needed for an always-on, 1Mbps, packet-switched 3G cellular system looks like it could become the next High Definition TV - a neat technology with no customers." Wireless LAN technology is identified as "the sweet spot in wireless" with manufacturers such as Toshiba, Dell, IBM, Compaq, Microsoft and Handspring supporting it in their new products. The study highlights the strengths of the technology as being already interoperable and cheap, offering fixed-like connection speeds, being secure, and finally will be well received by enterprise customers since it is based on Ethernet, a local area technology known and trusted by "millions of operations people." The study identified the most likely usage will be via laptops and PDAs equipped with 802.11b and Bluetooth and mobile phones compatible with 2.5G networks that use SMS and Bluetooth. << - Eric -