Study: 3G Vendors Face Failure

Third generation (3G) wireless systems could easily
become commercial failures if operators focus on
so-called killer applications such as multimedia, a new
study released Wednesday by consultants Herschel
Shosteck Associates claims.

“The relentlessly cited 3G future – ‘full motion video’ and
‘multimedia’ – is irrelevant,” said Dr. Herschel Shosteck
of the consulting firm. “The concept of the killer
application is flawed and its pursuit is detrimental to the

Instead, operators should focus on delivering the
basics, the study said. It predicts that initial 3G profits
will come not from applications like multimedia but by
operators providing fast, low-cost Internet access for
existing low-bandwidth applications.

The study claims the infrastructure costs for delivering
the type of ubiquitous high bandwidth for applications
such as multimedia will be too high for wireless operators.

“By distracting attention from the ultimate end-goal, the attention paid to
full-motion video and multimedia becomes pernicious,” Shosteck said.
“Recognizing this is crucial.”

Even if operators pay for such bandwidth, the resulting costs to consumers
will be too high for widespread acceptance, the study said.

Jane Zweig, executive vice president for the firm, adds that one problem is
that the wireless infrastructure industry and the Internet industry don’t fully
understand each other.

“Because of the disconnects between the (wireless) and IP worlds, the IP
world is developing advanced RF applications and services which cannot
succeed on early 3G systems, Zweig said. “The potential for economic loss is

Zweig also cited the high price governments are demanding for 3G spectrum
and “competitive paranoia” by network operators in creating a potentially
dangerous situation.

“These factors, combined with additional ‘disconnects’ have contributed to
industry-wide confusion and hysteria,” stated Ms. Zweig. “This confusion and
hysteria have virtually precluded a dispassionate and rational analysis of the
3G transition.”

The results are from the study: Third Generation Wireless (3G): The
Continuing Saga.

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