The First Mobile Services

Published Date: 02 Nov 2017

http://people.csail.mit.edu/wlehr/Lehr-Papers_files/Lehr%20Wifi%203G.pdf

Abstract:

This article compares and contrasts two technologies for delivering broadband wireless Internet access services: ‘‘3G’’ vs. ‘‘WiFi’’. The former, 3G, refers to the collection of third-generation mobile technologies that are designed to allow mobile operators to offer integrated data and voice services over mobile networks. The latter, WiFi, refers to the 802.11b wireless Ethernet standard that was designed to support wireless LANs. Although the two technologies reflect fundamentally different service, industry, and architectural design goals, origins, and philosophies, each has recently attracted a lot of attention as candidates for the dominant platform for providing broadband wireless access to the Internet. It remains an open question as to the extent to which these two technologies are in competition or, perhaps, may be complementary. If they are viewed as in competition, then the triumph of one at the expense of the other would be likely to have profound implications for the evolution of the wireless Internet and structure of the service-provider industry.

Keywords: Internet; Broadband; Wireless; 3G; WLAN; Ethernet; Access; Spectrum; Economics; Industry structure

Introduction:

The two most important phenomena impacting telecommunications over the past decade have been the explosive parallel growth of the Internet and mobile telephone services. The Internet brought the benefits of data communications to the masses with email, the Web, and eCommerce; while mobile service has enabled ‘‘follow-me-anywhere/always on’’ telephony. The Internet helped accelerate the trend from voice- to data-centric networking. Now, these two worlds are converging. This convergence offers the benefits of new interactive multimedia services coupled to the flexibility and mobility of wireless. To realize the full potential of this convergence, however, we need broadband access connections. What precisely constitutes ‘‘broadband’’ is, of course, a moving target, but at a minimum, it should support data rates in the hundreds of kilobits per second (kbps) as opposed to the 50 kbps enjoyed by 80% of the Internet users in the US who still rely on dial-up modems over wireline circuits, or the even more anemic 10–20 kbps typically supported by the first generation of mobile data. While the need for broadband wireless Internet access is widely accepted, there remains great uncertainty and disagreement as to how the wireless Internet future will evolve.2

The goal of this article is to compare and contrast two technologies that are likely to play important roles: third-generation mobile (3G) and wireless local area networks (WLAN). Specifically, we will focus on 3G as embodied by the IMT-2000 family of standards3 versus the WLAN technology embodied by the WiFi or 802.1 lb standard, which is the most popular and widely deployed of the WLAN technologies. We use these technologies as reference points to span what we believe are two fundamentally different philosophies for how wireless Internet access might evolve. The former represents a natural evolution and extension of the business models of existing mobile providers. These providers have already invested billions of dollars purchasing the spectrum licenses to support advanced data services and equipment makers have been gearing up to produce the base stations and handsets for wide-scale deployments of 3G services.

In focusing on 3G and WiFi, we are ignoring many other technologies that are likely to be important in the wireless Internet such as satellite services, LMDS, MMDS, or other fixed wireless alternatives. We also ignore technologies such as BlueTooth or HomeRF, which have at times been touted as potential rivals to WiFi, at least in home networking environments.5 Moreover, we will not discuss the relationship between various transitional, or ‘‘2.5G’’ mobile technologies such as GPRS or EDGE, nor will we discuss the myriad possibilities for ‘‘4G’’ mobile technologies.6 While all of these are interesting, we have only limited space and our goal is to tease out what we believe are important themes/trends/forces shaping the industry structure for next-generation wireless services, rather than to focus on the technologies themselves.7 We use 3G and WiFi as shorthand for broad classes of related technologies that have two quite distinct industry origins and histories.

2. Some background on WiFi and 3G:

In this section, we provide a brief overview of the two technologies to help orient the reader. We will discuss each of the technologies in turn.

2.1. 3G

3G is a technology for mobile service providers. Service providers that own and operate their own wireless networks and sell mobile services to end-users, usually on a monthly subscription basis, provide mobile services. Mobile service providers10 use licensed spectrum to provide wireless telephone coverage over some relatively large contiguous geographic serving area. Historically, this might have included a metropolitan area. Today it may include the entire country. From a user perspective, the key feature of mobile service is that it offers (near) ubiquitous and continuous coverage. That is, a consumer can carry on a telephone conversation while driving along a highway at 100 km/h. To support this service, mobile operators maintain a network of interconnected and overlapping mobile base stations that hand-off calls as those customers move among adjacent cells. Each mobile base station may support users up to several kilometers away. The cell towers are connected to each other by a backhaul network that also provides interconnection to the wireline public switched telecommunications network (PSTN) and other services. The mobile system operator owns the end-to-end network from the base stations to the backhaul network to the point of interconnection to the PSTN.

The first mobile services were analog. Although mobile services began to emerge in the 1940s, the first mass-market mobile services in the US were based on the advanced mobile phone service (AMPS) technology. This is what is commonly referred to as first-generation (1G) wireless.11 In the 1990s, mobile services based on digital mobile technologies ushered in the second generation (2G) of wireless that we have today. In the US, these were referred to as personal communication systems (PCS)12 and used technologies such as time division multiple access (TDMA), code division multiple access (CDMA) and global system for mobile-communications (GSM). From 1995 to 1997, the FCC auctioned off PCS spectrum licenses in the 1850–1990 MHz band. CDMA and TDMA were deployed in various parts of the US, while GSM was deployed as the common standard in Europe.13 The next generation or 3G mobile technologies will support higher bandwidth digital communications and are expected to be based on one of the several standards included under the International Telecommunications Union (ITUs) IMT-2000 umbrella of 3G standards.

Auctions for 3G spectrum licenses occurred in a number of countries in 2000 and the first commercial offerings of 3G services began in Japan in October 2001. More recently, Verizon Wireless has starting offering ‘‘3G’’ service in portions of its serving territory.

2.2. WiFi

WiFi is the popular name for the wireless Ethernet 802.11b standard for WLANs. Wireline local area networks (LANs) emerged in the early 1980s as a way to allow collections of PCs, terminals, and other distributed computing devices to share resources and peripherals such as printers, access servers, or shared storage devices. One of the most popular LAN technologies was Ethernet. Over the years, the IEEE has approved a succession of Ethernet standards to support higher capacity LANs over a diverse array of media. The 802.11x families of Ethernet standards are for wireless LANs.16

WiFi LANs operate using unlicensed spectrum in the 2.4 GHz band.17 The current generation of WLANs support up to 11 Mbps data rates within 100 m of the base station.18 Most typically, WLANs are deployed in a distributed way to offer last-hundred-meter connectivity to a wireline backbone corporate or campus network. Typically, the WLANs are implemented as part of a private network. The base station equipment is owned and operated by the end-user community as part of the corporate enterprise, campus, or government network. In most cases, use of the network is free to the end-users (that is, it is subsidized by the community as a cost of doing business, like corporate employee telephones).

Although each base station can support connections only over a range of a hundred meters, it is possible to provide contiguous coverage over a wider area by using multiple base stations. A number of corporate business and university campuses have deployed such contiguous WLANs. Still, the WLAN technology was not designed to support high-speed hand-off associated with users moving between base station coverage areas.

In the last 2 years, we have seen the emergence of a number of service providers that are offering WiFi services for a fee in selected local areas such as hotels, airport lounges, and coffee shops.19 In addition, there is a growing movement of so-called ‘‘FreeNets’’ where individuals or organizations are providing open access to subsidized WiFi networks.

In contrast to mobile, WLANs were principally focused on supporting data communications. However, with the growing interest in supporting real-time services such as voice and video over IP networks, it is possible to support voice telephony services over WLANs.

3. How are WiFi and 3G same:

From the preceding discussion, it might appear that 3G and WiFi address completely different user needs in quite distinct, non-overlapping markets. While this was certainly more true about earlier generations of mobile services when compared with wired LANs or earlier versions of WLANs, it is increasingly not the case. The end-user does not care what technology is used to support his service. What matters is that both of these technologies are providing platforms for wireless access to the Internet and other communication services.

In this section we focus on the ways in which the two technologies may be thought of as similar, while in the next section we will focus on the many differences between the two.

3.1. Both are wireless

Both technologies are wireless, which (1) avoids the need to install cable drops to each device when compared to wireline alternatives and (2) facilitates mobility. Avoiding the need to install or reconfigure wired local distribution plant can represent a significant cost saving, whether it is within a building, home, or in the last -kilometer distribution plant of a wireline service provider.

Moreover, wireless facilities can provide scalable infrastructure when penetration will increase only slowly over time (e.g., when a new service is offered or in an overbuild scenario). New base stations are added as more users in the local area join the wireless network and cells are resized. Wireless infrastructure may be deployed more rapidly than wireline alternatives to respond to new market opportunities or changing demand. These aspects of wireless may make it attractive as an overbuild competitor to wireline local access, which has large sunk/fixed costs that vary more with the homes passed than the actual level of subscribership. The high upfront cost of installing new wireline last-kilometer facilities is one of the reasons why these may be a natural monopoly, at least in many locations.

Wireless technologies also facilitate mobility. This includes both (1) the ability to move devices around without having to move cables and furniture and (2) the ability to stay continuously connected over wider serving areas. We refer to the first as local mobility and this is one of the key advantages of WLANs over traditional wireline LANs. The second type of mobility is one of the key advantages of mobile systems such as 3G. WLANs trade the range of coverage for higher bandwidth, making them more suitable for ‘‘local hot spot’’ service. In contrast, 3G offer much narrower bandwidth but over a wider calling area and with more support for rapid movement between base stations. Although it is possible to cover a wide area with WiFi, it is most commonly deployed in a local area with one or a few base stations being managed as a separate WLAN. In contrast, a 3G network would include a large number of base stations operating over a wide area as an integrated wireless network to enable load sharing and uninterrupted hand-offs when subscribers move between base stations at high speeds.

This has implications for the magnitude of initial investment required to bring up WLAN or 3G wireless service and for the network management and operations support services required to operate the networks. However, it is unclear at this time which type of network might be lower cost for equivalent scale deployments, either in terms of upfront capital costs (ignoring spectrum costs for now) or on-going network management costs.

3.2. Both are access technologies

Both 3G and WiFi are access or edge-network technologies. This means they offer alternatives to the last-kilometer wireline network. Beyond the last kilometer, both rely on similar network connections and transmission support infrastructure. For 3G, the wireless link is from the end- user device to the cell base station which may be at a distance of up to a few kilometers, and then dedicated wireline facilities to interconnect base stations to the carrier’s backbone network and ultimately to the Internet cloud. The local backhaul infrastructure of the cell provider may be offered over facilities owned by the wireless provider (e.g., microwave links) or leased from the local wireline telephone service provider (i.e., usually the incumbent local exchange carrier or ILEC). Although 3G is conceived of as an end-to-end service, it is possible to view it as an access service.

Because both technologies are access technologies, we must always consider the role of backbone wireline providers that provide connectivity to the rest of the Internet and support transport within the core of the network. These wireline providers may also offer competing wireline access solutions. For example, one could ask whether a local wireline telephone company might seek to offer WiFi access as a way to compete with a 3G provider; or a 3G provider might expand their offerings (including integrating WiFi) to compete more directly with a wireline service provider. Of course, the incentives for such head-to-head competition are muted if the 3G provider and wireline telephone service provider (or cable modem provider) share a common corporate parent (e.g., Verizon and Verizon Wireless or Telefonica and Telefonica Moviles).

Finally, focusing on the access nature of 3G and WiFi allows us to abstract from the other elements of the value chain. Wireless services are part of an end-to-end value chain that includes, in its coarsest delineation at least (1) the Internet back bone (the cloud); (2) the second kilometer network providers (wireline telephone, mobile, cable, or a NextGen carrier); and (3) the last kilometer access facilities (and, beyond them, the end-user devices). The backbone and the second kilometer may be wireless or wireline, but these are not principally a ‘‘wireless’’ challenge. It is in the last kilometer—the access network—that delivering mobility, bandwidth, and follow-me- anywhere/anytime services are most challenging.

3.3. Both offer broadband data service

Both 3G and WiFi support broadband data service, although as noted earlier, the data rate offered by WiFi (11 Mbps) is substantially higher than the couple of 100 kbps expected from 3G services. Although future generations of wireless mobile technology will support higher speeds, this will also be the case for WLANs, and neither will be likely to compete with wireline speeds (except over quite short distances).22

The key is that both will offer sufficient bandwidth to support a comparable array of services, including real-time voice, data, and streaming media, that are not currently easily supported over narrowband wireline services. (Of course, the quality of these services will be quite different as will be discussed further below.) In this sense, both will support ‘‘broadband’’ where we define this as ‘‘faster than what we had before’’.

Both services will also support ‘‘always on’’ connectivity which is another very important aspect of broadband service. Indeed, some analysts believe this is even more important than the raw throughput supported.

4. How are they different:

In this section, we consider several of the important ways in which the WiFi and 3G approaches to offering broadband wireless access services are substantively different.

4.1. Current business models/deployment are different

[As noted above, the model is an extension of 3G mobile service provider. This is the preferred technology for the upgrade of existing mobile services to increase the capacity to expand and add additional services. The basic business model is a model of telecommunication service providers who own and manage the infrastructure (including spectrum) and sales of this infrastructure.23 End users typically have a monthly service contract provider 3G and See Operating your recurring payments, similar to a regular phone. As expected, the business model is close to the 3G wireless phone business. Thinking of capital assets and long-lasting, ubiquitous coverage and integration services. In addition, regulatory oversight of telecommunications, including common transport and interconnection standards landscape.24 part of service is conceived as a general rule, in the mass market, both residential and business customers on a subscription basis. Implementation services from top to bottom and 3G model, vertically integrated and is based on central planning and operation.25 It is expected that 3G services are provided as part of a range of services to exploit the potential of the implementation of the strategy price discrimination and consumer preferences to use'' stop'' / a bill service.

By contrast, Wi-Fi in a sector of data (LAN), a byproduct of the computer industry. The basic business model is one of the manufacturers that sell boxes to consumers. The services provided by the equipment may be free for owners of the equipment. For customers, the team is an important asset that depreciates. While Wi-Fi can be used as an access channel had not thought as end-to-end service. Only recently undergone WLAN in offering mass market for home users. Rather they are installed. In most typical business or academia users to buy the equipment and install it yourself and then connect to their facilities or access to the corporate network. Usually WiFi network users do not pay directly for access. The service is offered free of charge to the gated community of users, the cost of providing wireless access to subsidized firms or university. More recently, we have seen the emergence of the FreeNet movement and various service providers to offer initiatives to (semi-) ubiquitous access to Wi-Fi services.

Besides FreeNet movements, a number of services that are now studying the use of Wi-Fi as the basis for wireless access to a wide geographic areas.26 One of the most ambitious efforts Boingo, which was founded by Sky Dayton, president and founder of Earthlink.]

4.2. Spectrum policy and management

[One major difference between 3G and Wi-Fi, which we have just touched seriously, is that 3G mobile technology and other use of licensed spectrum, while the Wi-Fi uses unlicensed spectrum in common. This has important implications for (1) the cost of services, (2) quality of service (QoS) and congestion management, and (3) the structure of the sector.]

4.3. Status of technology development different

The two technologies differentiate with respect to their stage of development in a number of ways.

4.3.1. Deployment status

[In most OECD countries, the penetration of mobile phone services 2G is very high, consumers have a choice between multiple service providers existing facilities in most markets. In addition, most of the mobile phone service providers have plans 2G to 3G data services announced broadband. However, 3G services only slowly recovering. There are a number of reasons, including the high cost of acquiring 3G licenses, and the lack of 3G phones, and increasing expectations publishing costs, and reduce the likelihood of short-term income.]

4.3.2. Embedded support for services

[Another important difference between 3G and Wi-Fi is integrated support for voice services. 3G is specially designed to improve the technology for wireless voice so that the voice services are an integral part of the third-generation 3G technology. On the other hand, LAN provides data communications service of the lower layer can be used as the substrate on which the layer services, such as voice telephony. For example, enter IP over Wi-Fi, it is possible to support over Internet Protocol voice. However, there are still considerable uncertainties in the market about how voice services and guaranteed quality to implement through WLAN networks.]

4.3.3. Standardization

[It is also possible to compare the two technologies with respect to the extent that the uniform. In general, it seems that the criteria for an official picture of 3G is perhaps more pronounced than WLAN.]

4.3.4. Service/business model

[3G is more developed than WiFi as a service business model. It is an extension of the service of the existing industry to new services, and therefore not a substantial change in the underlying structure of the non sector. The main uncertainties in the market and as many remain undeveloped is the other side of the device and application / content provider and the end-use demand.]

5. Some implications for industry structure and public policy:

In this section we consider some of the implications that emerge from the past study, as well as offer some speculation on the possible implication for industry structure, competition, and public policy.

5.1. WiFi is good for competition

[One implication is clear from the above analysis is that the success of Wi-Fi wireless local access alternatives is probably good for local competition to be. First, unless he was alive 3G, it is unlikely that we are not vertically integrated, decentralized See. And high input costs associated with the acquisition of licensed spectrum and the need to build a larger network geographically to provide the service will start to reduce. The number of companies competing in the market and of course, this does not mean that wireless access services more than enough competition between mobile operators exist to prevent the exercise of market power will be able to compete, maybe. But there is also the possibility that some 3G providers will have even less through mergers, and when combined with the power of the local market for fixed-line operators, and this can be a powerful Nexus for the continuation of the monopoly in installations Visitors miles offer. Of course, companies that have a chance of potential market power, mobile operators and carriers exchange local time (that a large proportion of mobile operators have) been proven to have a strong incentive to efforts to control monopoly on hybrid wireless services group interdependent.

Secondly, if both 3G and Wi-Fi survive, then the diversity of communication strategies able to survive will not lead to more facilities-based competition.

Third, the success of the Wi-Fi model to help open a significant investment in network infrastructure that can be used as a basis to build an alternative infrastructure for wire and cable networks PSTN. As mentioned above, this requires the addition of business functions and technical support to enable the station owners account for Wi-Fi. Once it is developed, and increase the ability to create in order to take advantage of existing investments in new infrastructure in new ways.]

5.2. WiFi and 3G can complement each other for a mobile provider

[Another alternative could be integrated WiFi 3G type networks. In fact, this seems the most likely scenario, given that there are compelling reasons why these two technologies can be used together.Each of the technology has a clear advantage over the other, which will allow each to a higher quality of service under different conditions to offer. Put the two together make more valuable to offer. Services to a wider range of services]

5.3. Spectrum policy is key

[Clearly, spectrum policy has been and will continue to play an important role in how the wireless future. One of the main distinguishing features between 3G and Wi-Fi, the use of unlicensed spectrum by unlicensed.

Continued progress towards creating secondary spectrum markets benefit both 3G and WiFi models. For 3G, secondary markets allow more flexible management of the property. Secondary markets allow greater flexibility in spectrum allocated to higher value uses, and can improve the dynamic performance. For example, to balance the supply and demand of regional imbalances.

For Wi-Fi, the rise of spectrum markets makes it possible to find a suitable mechanism to deal with congestion problems.]

5.4. Success of WiFi is potentially good for multimedia content

[Services, the benefits of multimedia content more bandwidth, so that the ability to support the arrival of high-speed wireless help promote the development of multimedia content broadband.

On the other hand, the lack of a clear business model for the deployment of broadband services through a network of Wi-Fi, check out how they will pay content / or digital rights management (DRM) to be increased. Can the issues and problems of digital rights management can be difficult to control in a more decentralized, and focuses on the network from a central service provider end user. Can be a form of vertical integration to provide 3G greater control, increased production of content that can actually increase.

This is a complex issue that deserves more attention. It is premature to say that the two effects tend to be larger.]

5.5. Technical progress favors heterogeneous future

[Technical advances in wireless services for heterogeneous wireless future. There are several reasons for this. First, with any technology, the rapid innovation, several generations of each technology coexist in the network simultaneously. Along with this heterogeneity, the constant competition between alternative wireless technologies. All these common benefits shared to some extent, all benefit from advances in basic elements, such as modulation techniques, smart antenna design, power management and battery technology and signal processing technology. However, because different technologies have asymmetric fundamental problems affecting progress. Different This means that the horse continued rise different technologies at different times.

Once the world the need to coordinate heterogeneous technologies, accepts opportunities to evolve the management of these environments. For example, the success of the IP protocol suite is set in a large part on its ability to support through heterogeneous network. Interoperable communications and physical infrastructure Similarly, the evolution of wireless technology, the coexistence of heterogeneous wireless access technologies favor.]

6. Conclusions:

[This article provides a qualitative comparison of two wireless technologies that could be considered as a substitute and / or complementary pathways for the development of wireless broadband access simultaneously. Both 3G technology, mobile operators upgrade preferred path and Wi-Fi, one of the many wireless technologies.

The purpose of the analysis is to explore two different visions of the world to the future of wireless and speculate on the chances of success and possible interactions between the two technologies in the future.

While the analysis raises more questions than answers, are some preliminary conclusions. Firstly, both technologies are likely to succeed in the market. This means that future heterogeneous wireless access technologies included, so that manufacturers, service providers, end users and policy makers should not expect to see a simple wireless future.

Secondly, it is expected that 3G mobile providers to integrate their networks. WiFi Technology So expect these technologies to be the most successful complementary mass market deployments.]

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