CIO Update Q&A with iPass

May 11, 2006

Allen Bernard

Like many a new technology, 3G (and 4G) holds a lot of promise for the mobile enterprise but the hype out-paced the technology by many years.

CIO Update sat down with Anurag Lal, senior vice president of Business Development at iPass, a provider of enterprise, wireless connectivity services, for a history lesson and to find out just how mature the technology is today, where it's being used and why other countries such as Japan and South Korea have been able to so easily leap-frog the U.S. in its deployment.

CIO Update: Where are things at today with 3G?

Lal: There has been a lot of hype around 3G and 3G means different things depending on what part of the world you are coming from. If you are coming Europe and Asia, it is primarily UMTS which it's an evolution of the GSM standard. If you're in North America it's essentially 1xEVDO which is an evolution of the CDMA standard.

But, in essence, 3G was meant to provide a broadband user experience to the end user. That was the big hype the mobile providers were looking to take 3G to market with. As of now, I think they're still in the midst of rolling out that technology in different parts of the world. Depending on what service you choose, its deployment standards vary. In my opinion, we're still at the 3G phase. There's a lot of talk at various forums about 4G but I think that's were we are with 3G technology.

Why is Japan so much further ahead than the U.S.?

I think with Japan—Korea also is far ahead of us—a couple of unique things in that part of the world. Firstly, both those countries have a very mature technology infrastructure.

They were first to deploy 3G yeas ahead of the other countries in other parts of the world. And, also, were years ahead of everybody else in deploying applications both for the consumer market and the business market; and have been able to get traction on both those market segments.

As a result, they are evolving their capability to newer, greater heights. But, having said all that, I'd like to throw in a good word for WiFi. WiFi is one technology were are seeing being deployed more aggressively across the world—pushing it to the point of ubiquity and availability.

But because of it's disruptive nature and its unique capability with regards to delivering a broadband experience to the end user, I think it is more closer to the 3 1/2, 4G capability that people would like to have on wide-area basis but it's available today now.

What is the difference between 3G and 802.16—aren't these competing technologies?

I believe 802.16 will coexist very well with WiFi as well as 3G technologies. In essence help reduce the backhaul cost for those two technology deployments. Over a period of time we will see, in the case of WiFi, more metro-area deployments were WiMAX or 802.16 will be used as the backhaul technology.

I don't see it as competition, I see it as a compliment to 3G. Because, ultimately, all these technologies promise certain user experiences under certain circumstances. And we believe at iPass the end user will ultimately want to be able to connect in a seamless and secure manner without worrying about underlying technologies.

The mobile version of WiMAX, which is a couple of years out, once that's available clearly it will step up and deliver on the next promise from a 4G or 5g perspective because of the broadband throughput it is said to be able to deliver.

But I do believe that is some way out. I think the standards has to be completely ratified, products have to be developed, chipsets have to be developed, and end-user products have to be deployed. While, at the same point in time, service providers need to deploy services as well.

Ultimately we will see chip sets that cater to these different technologies and that allow the user to go from network to network in a seamless manner assuring them that they're always connected and enjoying a secure broadband experience.

What is 3G today? I can already get internet on my cell phone, I can watch TV on my cell phone.

And again, 3G in this country is really different things to different segments. To a consumer end-user 3G would be the ability to do some rudimentary surfing on the Net leveraging their cell phone, getting some rudimentary video clips leveraging their cell phone, and maybe doing some messaging-based applications leveraging their cell phone.

To the business and enterprise market it's really the ability to leverage horizontal or broadband Internet connectivity in a ubiquitous manner on a wide-area basis to leverage a whole range of enterprise applications.

But this time not only accessing it from a cell phone but also accessing it using a 3G card that's inserted into a laptop.

That's the challenge of 3G too because it's expensive to deploy, it's expensive to use. So, it's like a chicken and the egg situation from a user perspective too, but, in essence, if you were in a city center in most of the cities out there you could get 3G service.

What has stopped 3G from being adopted as it has in Korea and Japan?

We have a pretty good network, the only different between the United States and Korea and Japan is physically, geography-wise, the cost to deploy 3G networks in those countries and this country were very different. Because of the physical nature and the vast geographical area that has to be covered in the United States the cost is that much more.

And the cost is not only technology costs but network costs from a backhaul perspective as well as spectrum costs, which is regulated considerably. In the case of Korea and Japan, the spectrum cost was much, much less; where the government actually incented the service providers to deploy 3G technologies.

If you look at the cost components in the deployment of a 3G network one is over-the-air-spectrum, which is government controlled and costs money, two is the backhaul from the cell tower to the Internet or the phone network, and then third is the hardware costs that is deployed at the cell tower itself and at the central office.

Does 802.16 get around those costs?

What .16 would do is allow you to go from the cell tower wirelessly to the phone company network. So that cost component decreases considerably.

Plus because it's wireless backhaul now it allows you extend the network in parts of the country and provide incremental coverage in areas you previously wouldn't have done so because you weren't able to get a backhaul wireline network to that point.

What about demand? Is there a call for 3G technology in this country?

Clearly, the demand is not there as aggressive a manner as everyone expected it to be and the primary reason is cost. We will see the demand increase as the cost comes down but again as the demand increases the network takes on more load and as a result requires the phone companies to upgrade their network and that's the challenge really that the phone company faces.

On the enterprise side the biggest application there to drive demand is horizontal Internet access off the 3G network. And, again, that is weighted by the cost of every packet that goes back and forth. And because that cost is high, typically within an enterprise corporation, 3G cards are made available either to top exec's or a vertical application that is being deployed that justifies the expense of 3G.

How long has 3G been around? It seems like I've heard about its promise for a long time now.

It started initially in 1995 with more hype in the '98-'99 timeframe. Then things slowed down when the (Internet) bubble burst because clearly a lot of the demand that was forecast tended to go away and also the days of being able to raise debt and capital in an endless manner from the public markets kind of quieted down too.

Then ultimately in the 2002-2003 timeline we started seeing 3G outside of the Japan and other parts of the world with 2003, 2004, 2005 is when you started seeing it in the United states.

So, then, what is 4G today just a bigger pipe to move more data?

It depends who you talk to and what they can define. You can define WiFi as 4G. You can define WiMAX as 4G. You can define the next step in WCDMA technology … as 4G technology. It's like taking an ISDN line and upgrading to a DSL line and going from there to a dedicated T1 line.

Is there much excitement today from the user community for 3G technologies?

The users get lost in all the terminology. What the user wants to do is connect remotely … and not worry about all these different technologies, and all these different cards, and all these different pricing plans, and all these different authentication mechanisms.

Unfortunately, a lot of times the phone companies get bogged down in all these great technologies and they loose their perspective of what the end user is looking for.

So, at some point, 3G, 4G, WiFi, WiMAX, etc. are all just going to go away and people will just be connected?

Well all those (acronyms) are gong to be irrelevant to the end user. They won't go away, they'll be there. They'll be irrelevant to the end user as they should be today because end users, at the end of the day, don't buy any one of the those technologies they buy a single, simple seamless, and secure usage experience. That's what they're looking for.


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