No matter how promising their technologies seem, Broadstorm Telecommunications Inc., of Bellevue, Wash., Flarion Technologies Inc. and Tantivy Communications Inc. face an uphill battle to persuade major carriers to switch allegiance from the third-generation standard.
Their greatest allies in that battle may be the large corporations that have committed to 802.11b wireless LANs because all-IP alternatives to 3G will enable mobile users to move seamlessly between the office LAN and the Internet.
"When enterprises start using wireless LANs on a regular basis on corporate campuses, carriers will look to that and say, How can I capture that customer?" said Matt Brookshier, vice president of marketing for PacketAir Networks Inc., of San Diego.
With that in mind, PacketAir is developing its own migration path. Until mobile operators deploy all-IP wireless networks, it is focusing on wireless LAN deployments within enterprises. Its routers, however, can support an integrated wireless LAN and IP WAN, anticipating a service that can hop networks instantly and automatically.
Brookshier said this capability could prove advantageous for voice communications as well. Deploying wireless voice over IP could allow workers to carry on voice conversations while moving from one network to the next.
That logic seems to be gaining support. Cisco Systems Inc., one of the largest suppliers of wireless LAN gear, recently invested in Flarion. Ray Dolan, president and CEO of the Bedminster, N.J., company, said it will partner with Cisco, since Cisco wireless LANs interoperate with Flarions WAN technologies.
But will these anticipated efficiencies be enough to persuade carriers? One executive with a nationwide carrier, who asked that he not be identified, said his company looked closely at Flarions technology and found it promising. But the carrier was not persuaded to change its migration course from 3G, he said, mainly because Flarions flash-OFDM (Orthogonal Frequency Division Multiplexing) is not a standard, and theres little device development under way.
In addition, CDMA (Code Division Multiple Access) operators face a smooth transition to 3G. Many are already implementing CDMA2000 1xRTT, a so-called 2.5G technology, which makes the move to 3Gs CDMA2000 1xEVDO standard a relatively painless incremental upgrade.
"The carriers have either locked into something or are going about this carefully by doing upgrades," said Jerry Kaufman, president of Alexander Resources, a research and consulting company, in Dallas.
Besides, even if challengers offer slightly better alternatives, they cant offer backward compatibility. "Most people would say, So what? They need to do it in a cost-effective way thats backward-compatible," said Perry LaForge, executive director of the CDMA Development Group.
Meanwhile, major TDMA (Time Division Multiple Access) operators AT&T Wireless and Cingular Wireless LLC are both converting to GSM (Global System for Mobile Communications), the standard throughout Europe and much of the world outside the United States, and plan to deploy GSM versions of 3G.
Still, the challengers say GSM carriers would make a good customer base because they lack a data-only technology comparable to CDMA2000 1xEVDO. Tantivy, of Melbourne, Fla., for example, has been trying to persuade North American standards bodies that its solution will be ideal for GSM operators to compete with CDMA2000 1xEVDO.
An increase in demand for wireless data services could also open doors. The main appeal of 3G is the promise of at least doubling the number of voice users a network can support. Today, voice customers are profitable for operators, while the wireless data market is just developing.
In the end, challengers may find their best market lies with startup carriers, most likely companies that dont exist today. Flarion has tested its gear in the 700MHz spectrum, which the Federal Communications Commission plans to auction in the middle of next year. Buyers of those licenses might be interested in launching wireless data services as a way of breaking into the Competitive Local Exchange Carrier, or CLEC, market without having to pay local carriers or cable companies for network access.