4G Networks

4G -The Next Generation

So what is this 4G anyway? 4G refers to the fourth generation of cellular wireless standards. It is a successor to 3G and 2G standards. The first was the move from analogue (1G) to digital transmission (2G). This was followed by multi-media support, spread-spectrum transmission and at least 200 kbit/s (3G) and now 4G, which refers to all IP packet switched networks, mobile ultra-broadband (gigabit speed) access and multi-carrier transmission.

Carriers are looking to build capacity through 4G networks that use internet technology to deliver data to users quickly and efficiently. The rapid proliferation of smartphones has created bottlenecks on 3G networks as many users try to get online at the same time. With 4G, carriers are creating pipelines for data, based on newer internet technology that can handle greater information volume. With Sprint's newest 4G network already receiving good reviews in test cities, it's unlikely any wireless carrier will continue to focus on updating their 3G connections.

In the same way Apple has already dropped support for their "outdated" first and second generation iPhones, wireless carriers will likely take the plunge into 4G now, instead of waiting for carriers to fully implement it first. In fact, 4G actually surpasses most broadband speeds, so businesses that are looking to gain an edge will jump on the 4G bandwagon instead of traditional internet carriers like Comcast, Roadrunner and Dish Network.

Sprint has already lowered it's monthly unlimited 4G data service for its Overdrive hotspot to $60 a month. Verizon charges $60 for a single mobile-laptop connection. Sprint's current and Verizon's estimated 2011 4G solutions will pull customers from other carriers, making the 4G change much more affordable for personal users.

For businesses looking to upgrade, you'll have to consider where it's used first. If you spend your time in or around large commercial steel buildings, network coverage will still be spotty. In an open area, coverage can be much stronger.

The Race to 4G

Sprint Nextel, the nation's third-largest cell-phone carrier, is betting big on 4G. The company has spent several billion dollars in recent years to build wireless broadband service capacity to try to leapfrog larger rivals by offering consumers and businesses fast connections for smartphones, laptops and other devices.

Sprint bet on Palm's Pre smartphone, which launched to great fanfare in 2009, but which hasn't come close to matching AT&T's sales of Apple's iPhone. To lure customers while keeping current ones loyal, Sprint has recently issued a flurry of announcements about its 4G capabilities based on the WiMAX standard. On Mar. 23 at the wireless trade show, Sprint unveiled the EVO, a smartphone made by HTC that will be the first in the U.S. to access a 4G network. Sprint's moves could give it as much as a year's lead over Verizon and other rivals in delivering wireless products capable of using super-fast data connections.

The device joins Sprint's well-received Overdrive 4G mobile data hotspot introduced in January, which lets users connect up to five high-speed devices wirelessly. By the end of 2010, Sprint hopes to build a network covering 120 million potential customers.

Sprint's rivals are moving quickly to close ground. Verizon has said that by the end of the year it will begin rolling out a 4G network based on a technology called Long-Term Evolution (LTE) and is currently conducting LTE trials in Boston and Seattle with plans to have 4G handsets available in early 2011.

T-Mobile, the U.S.'s fourth-largest carrier, says it will be able to match Sprint's speed advantage without immediate plans to move into 4G, as 3.5G upgrades happen this year. Owned by Deutsche Telekom, T-Mobile says it will upgrade its 3G network to a technology called HSPA+, which can provide more speed on the existing network.

AT&T, which for three years has sold the hit iPhone and now offers the iPad, has largely chosen to sit out the rush to 4G, staying with GSM/UMTS/HSDPA technology. Last year, the company said it would spend up to $18 billion on network upgrades, in part to resolve network congestion in cities, including San Francisco and New York. AT&T has said that until there are more 4G devices available to take advantage of the faster network speeds, it will let competitors duke it out alone. "What we're trying to do is not get ahead of the ecosystem", says AT&T CTO John Donovan. They may not have to wait long, as consumer demand for the new iPad and the associated networking load is expected to be enormous. AT&T has also been testing HSPA+ in its labs, and says it can quickly roll out the technology when needed, at little or no expense.

Complicating life in the mobile market is competition from unconventional quarters. On Mar. 26 private equity firm Harbinger Capital Partners filed plans with the Federal Communications Commission to use spectrum owned by satellite companies to build an LTE network that would cost over $4 billion by 2015. And Clearwire, the wireless company in which Sprint holds a controlling stake, is selling services to Comcast, Time-Warner and other cable operators.

Nearly all these competitors stand to gain from an eventual move to 4G. Robert Syputa, principal analyst at market researcher Maravedis, says "Each company will benefit since the overall pie will continue to grow" as 4G usage spreads. The switch will over time let service providers offer data far more cheaply and reliably than on today's 3G networks, analysts say.

One of the biggest uncertainties facing carriers that back 4G is how to market their soup of technologies. Wireless carriers are constantly jockeying to claim that their networks will offer the fastest, broadest coverage. With LTE poised to become the most dominant 4G standard, analysts say carriers may be forced to embrace LTE, possibly by providing phones that can switch between the technologies.

Sources: Betsy Brottlund via startupnation.com, Cliff Edwards and Olga Kharif via businessweek.com

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