The Future is Calling: 4G and the New Age of Wireless
In response to a question about what technology he is packing these days, Karl Schlieber pulls out a BlackBerry and iPhone. He places these two slim packages next to his coffee cup on the table at the coffee shop near the University of Pennsylvania Bookstore. The BlackBerry is a sign of the device's dominance in email and other business applications; the iPhone is there because of the stunning user interface, not to mention the fact that Schlieber works for AT&T's Wireless Group.
Schlieber, EMTM '02, remembers the caffeine-charged air of this coffee shop from his days as a student in the EMTM program five years earlier. The world has changed dramatically since then. But we haven't come here to talk about the past, or the wireless present embodied in the two devices before us on the table. We have come to discuss the future of wireless, namely 4G.
With decades in the wireless business, Schlieber started with dumb pagers that couldn't even identify the number that was calling him, and first-generation cell phones the size of bricks. As a sign of the rapid transformations in the industry, he has worked for six different companies often without changing jobs. As Director of Architecture Governance at AT&T, he is now helping to shape this future. To get a broader view of what 4G will be, and what it will mean for business, we spoke with Schlieber and EMTM graduates from Sprint and RIM, as well as EMTM faculty.
4G Doesn't Exist
Before discussing 4G, we need to make one thing clear: 4G doesn't exist. "There is no technical definition for 4G," said Mark Pecen, EMTM '05, who has just returned from a U.N. meeting on wireless standards by the International Telecommunications Union in Geneva. The ITU meeting drew some 450 delegates from 191 countries, but the discussions still focused on 3G. There are no global standards for 4G. Pecen, who helped develop the GSM standards that defined the previous generation of wireless, is now Vice President of Advanced Technology for Research in Motion (RIM).
The fact that 4G doesn't exist complicates our discussion a bit, even before we get to the technology issues. This
means that every blind man has a different view of the elephant. There is also another standards war brewing, with
jockeying between 4G standards such as Long-Term Evolution (LTE), heir apparent of GSM, and mobile WiMax. While
champions of the new technology paint different glowing pictures of the future, financial analysts, underwhelmed
by the results of 3G, express the usual skepticism. (As an analyst at Charter Equity Research told The New York
Times in 2006, 4G is "just a lot of marketing and hot air.")
The truth is somewhere between the hype and cynicism, but there is a sense that while 3G might have been an incremental improvement, 4G could be a much more significant disruption, leading to true wireless broadband and smart devices connected in what Scott Snyder, an EMTM faculty member, calls a "digital swarm."
Snyder points out that companies have underestimated the wireless market in the past. At the time of the AT&T breakup in 1984, the company estimated that there would be fewer than 1 million cell phones in 2000; there were 740 million. In 1994, AT&T paid more than $11 billion for McCaw Cellular. Because of the complex interaction of social, political, technological and other forces, the path of such innovations is often hard to predict.
Wireless: The Next Generation
Defining the boundaries of a generation is never an easy task for demographers or technologists, but the four generations of wireless break into roughly these eras:
- 1G: Analog
- 2G: Digital
- 3G: Faster networks, with digital voice plus data
- 4G: Ubiquitous, hyper-broadband and seamless all-IP network (competitive with fixed broadband)
The third generation of wireless has had its challenges. Companies bid up 3G licenses in Europe, leading to a 60 percent drop in value for major carriers. Pecen points out that the dream of 3G technologies was that it would drive applications such as video phones, but users were more interested in applications such as voice, email and navigation. "Excellent technical solutions are routinely discarded by the industry and consumers because they ignore or aggravate the non-technological forces that constrain the industry," he said.
One thing 4G will do is flatten the underlying technology by moving to an IP-based platform. If the current wireless systems appear to run smoothly and easily, it is not as a result of the elegance of the platforms. There are sometimes as many as five cores layered one upon the other like an archeological site: a circuit core for voice, a packet core for Internet, cores for messaging and GPS data. Fourth generation wireless will move 2G, 3G and WLAN to an IP-based platform with speeds of up to 100 Mbps for mobile and 1Gbps for fixed, according to the vision of the Wireless World Research Forum.
When does the new generation begin? Companies are still in the process of building out their 3G networks. Schlieber's
iPhone runs on 2.5G, but by the end of 2008, they expect to uplink at 5 Mbps and increase to 14 Mbps by 2009. Doug Smith,
EMTM '01, Chief Technical Operations Officer for Sprint's new mobile WiMAX service Xohm
(www.xohm.com), says they plan to roll out their first offerings in two
major markets by the end of April 2008, with additional expansion throughout 2008 and into 2009. He estimates that this
puts them about two years ahead of rivals based on other standards.
What does faster IP-based technology mean? At a certain point wireless becomes the new Internet. "It is not just the same old thing we were doing," Smith said. "We are mobilizing the Internet. Manager's need to know this is coming. It is not just the next cell phone with a few more things added into it; it really is a paradigm shift. We are taking the broadband connection and making it untethered, as well as introducing wireless capability or Internet access to a whole host of new devices."
Smith compared it to the impact of cell phones on landlines. "When cell phones came in, the total number of minutes went up, but cellular took away from landline service. Now, wired broadband has taken away from dialup. Imagine taking the wired broadband experience that you have at home or in the office to the beach or throughout a city, with fast throughput that travels with you."
With lower costs, more devices can be wired and users don't need to be locked in to long-term contracts. This represents a rethinking of the cell phone business model. "Traditionally, you build the network and develop the handset," Smith said. "The carrier would subsidize the expensive handset and lock users in to two-year contracts. It has always been closed off, a walled garden approach, so if you want to use my network you have to buy one of my devices. Instead, Xohm WiMAX is an open network. Mobile WiMAX technology can be put onto $20 chips, which are being included in laptops and other electronic devices.
The advantage of wireless Internet is that it can offer real-time, location-based services. Map-based applications from directions to services that allow you to chart the location of friends (such as Helio's "Buddy Beacon") are growing rapidly. Users are turning to their cell phones for directions, or to find restaurants and movie theaters. User-generated content such as YouTube videos are moving to the wireless web. Micropayments and microlending are being done by cell phone, particularly in developing countries, and there are increasing opportunities for collaboration through wikis and social networking. "You will see mass collaboration proliferate and move from the hobby to the business domain," said Pecen.
Smith said one business application might be the use of real-time video by a technician in the field, who could show a problem to an expert back in the office. AT&T has already launched a 3G service that allows a user from a wireless device to send a real-time video feed to another, so grandma can watch video of her grandson on the soccer field. "However, it is not always about speed," Schlieber said. "The iPhone is a huge success because it makes the applications easier to use. We can deploy faster networks, but the driving factors are applications that will bring a paradigm shift."
Snyder, President and COO of Decision Strategies International, Inc., a management consulting firm specializing in scenario planning, calls digital cell phones "the Trojan horse of communications." He sees the potential for a more significant disruption than unplugging the Internet. "While current systems like 3G are all about making the pipes (networks) we have bigger, 4G is about a shift in mindset. With 4G, we are working with controlled chaos many different networks and devices interoperating and the user's profile and context will drive what services are delivered."
Snyder sees the potential for "a continuum of interoperable, broadband, peer-to-peer, context-aware, cognitive, and user-centric networks, devices, and applications." Smart devices will communicate with us and one another in new ways. In the same way that the wired Internet transformed computing into something beyond computing, this wireless Internet could transform the meaning of wireless.
High-speed, wireless networks could change how organizations approach knowledge management and innovation. "While there has been a lot written about current wireless networks (2nd and 3rd generation cellular) as well as future wireless networks (4G), the perspectives presented have been technology-centric with very little attention to the broader strategic and organizational context for businesses using these networks," Snyder said. "Industry leaders will move beyond basic wireless connectivity to integrate wireless into everything they do."
Among the innovations Snyder sees arising from the wireless networking of people and devices are:
- Distributed phone systems that combine VoIP, P2P Networks and WiMax
- Smart dust that combines cognitive radios, ambient power sources and nano-electronics
- Personal bio-monitoring through the combination of medical devices, short-range broadband wireless and mass mobile storage.
This extended "wireless ecosystem" can be used to scan for changes in the environment, for innovations, feedback and learning (through wireless surveys, for example), and for customer rollouts (through downloads to customers).
A Gap in WiQ
Most organizations are unprepared for this environment. Snyder developed a survey of organizational capabilities to meet this wireless age and found a significant gap between their current "WiQ" and what they need to succeed in an unwired future. Most of the innovation in wireless, in fact, has been driven by the consumer sector. "There is a broad consensus that the business sector has been a laggard in adopting and leveraging wireless technology when compared to the consumer sector, where innovation runs rampant," he said.
And these changes could have even broader implications for society and business. "The idea of individuals self-organizing, like a Digital Swarm, to act in a way that results in the most efficient and effective outcomes is certainly appealing," he said. "But this also raises some fundamental questions about the state of society, the economic system, and the world."
In adopting 4G and other new wireless technologies, managers need to give careful thought to the applications they want to run, as well as to issues such as usability and security. Managers also need to understand "the forces that drive and limit wireless technology today," Pecen said.
Among the challenges facing technology firms designing 4G systems are latency and jitter due to the arrival times of packets, given that packets can travel along different paths. Mobility control in managing cell selection and handover are also critical. Gains in actual battery life have been much slower than demand, so advances in power management have been essential. Limited spectrum is demanding clever workarounds such as smart antenna technologies. A proliferation of base stations is leading to increased interference. It also is much harder to achieve security for a device that is not locked down and is communicating fluidly with the world.
The biggest challenge for managers may be assessing the true capacity and speed of these emerging networks. Companies may offer unlimited data plans, but Pecen recalls the CTO of a wireless company who started streaming television programs on his wireless data card under an "unlimited" data plan. The provider cut him off in less than two days; it used just too much bandwidth. In addition, advertised speeds and actual speeds in real conditions can be different by orders of magnitude due to the extreme variability of the wireless propagation channel.
One thing is certain: Technology is only a part of the equation in the development of 4G. The emergence of 4G will be shaped by the intersections of technology and socio-political forces. EMTM graduates say the program has helped them to understand these complex forces that determine the path of new technologies. "Value chains are so complicated in technology companies," Pecen said. "We have several value chains for our own company alone, and all of them have the potential to interact with and cannibalize one another."
Schlieber said EMTM helped him better understand the business issues involved in making investments in the face of uncertainty. "Building infrastructure is a critical decision for carriers to make and it is not cheap. You need to make sure you are doing it at the right time," he said. "The reason I joined the EMTM program is because my background was mainly technical. EMTM opened my eyes to thinking about how to deal with innovation."
Pecen said the program helped him better evaluate the financial impact of long-term investments. "Most companies treat research like development," he said. "But the payoff from research is long-term." Given the cost of capital over these periods, there is a need to keep experiments small and use options. This approach helps avoid the overcommitment that is a common problem in investing in new technologies.
He points to a graph showing the tradeoff in wireless between bandwidth and data rates as described by Shannon's Theorem. A technology manager may not need to know all the details of the equations, but he or she does need to understand the tradeoffs. "As an executive, you don't necessarily need to be able to calculate bit error probability, but you do have to understand that there is a tradeoff between wireless system capacity and data rates. Then you can understand the distinction between what is possible and what is practically achievable, and whether you can live with the economic consequences."
Smith notes that disruptive technologies such as 4G wireless were a key focus of the EMTM program. Sprint is working with an "ecosystem" of partners including Motorola, Samsung, Nokia and Intel to develop its 4G systems. "EMTM helped me look at the balance between the technology and business," he said. "Great technology is not going to go anywhere unless you have the business environment in which it can succeed. That's why we are focusing on building an entire business ecosystem. EMTM addressed the issues that I am now living with every day."
Before discussing 4G, we need to make one thing clear...
4G doesn’t exist.
“Excellent technical solutions are routinely discarded by the industry and consumers because they ignore or
aggravate the non-technological forces that constrain the industry.”
Mark Pecen, EMTM '05
Advanced Technology at Research In Motion, Limited
“We are taking the broadband connection and making it untethered,
as well as introducing wireless capability or Internet access to a whole host of new devices.”
Doug Smith, EMTM '01
Chief Technical Operations Officer
“Industry leaders will move beyond basic wireless
connectivity to integrate wireless into everything they do.”
Scott Snyder, PhD
President and COO, Decision Strategies International, Inc.
Adjunct Associate Professor, Electrical and Systems Engineering
University of Pennsylvania
“The reason I joined the EMTM program is because my background was mainly technical. EMTM opened my eyes to thinking
about how to deal with innovation.”
Karl Schlieber, EMTM '02
Director of Architecture Governance