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The skinny on CTIA Wireless 2006

Wireless-service providers and equipment makers gather in Las Vegas to tout the latest.

The wireless industry has headed for the desert.

This week in Las Vegas, mobile-phone operators and vendors will rub elbows with media and entertainment giants as they set the stage for what's coming next in mobile wireless.

The CTIA Wireless 2006 trade show, the biggest event of its kind in the U.S., is expected to attract some 40,000 attendees and will showcase speakers and products from big mobile-phone companies such as Sprint Nextel, Verizon Wireless, Cingular Wireless and T-Mobile. Also prominent among the speakers and exhibitors are mobile-service suppliers such as Nortel Networks and Siemens, handset makers Motorola, Nokia and others, and media and entertainment companies such as AOL, CBS, Disney, ESPN, HBO, MTV and Yahoo.

This mingling of service, gear and content providers reflects the fact that wireless handsets increasingly are taking on new functions. They serve not only as phones, but also as mini TVs, MP3 music players, cameras and even as gateways to the Internet. Mobile operators and handset makers have already begun working with media and entertainment companies to adapt content for the small screen and mobile environment.

For the most part, the next generation of mobile wireless features and services--from mobile TV to full-fledged online access--has already been determined. Now the industry must figure out how to deliver all these new services and applications to the masses.

Speeding up delivery
Number one on the list of issues to be debated at this year's CTIA is where the mobile networks of today will go from here. As networks are flooded with higher volumes of interactive content, faster download speeds will be required.

There are several technologies to choose from when it comes to supercharging the network. Will it be WiMax, designed to provide greater coverage than Wi-Fi wireless service, or will it be the next generation of cellular technology? Then there are the mobile broadcast technologies being developed by subsidiaries of Qualcomm and Crown Castle, which create separate "overlay" networks for delivering live TV.

The industry will also be debating the impact of a growing number of mobile virtual network operators (MVNOs), which include ESPN, and the Walt Disney Company's Disney Mobile, which is scheduled to launch during the show this week.

Even though phone companies have spent billions of dollars upgrading their cellular networks, they still offer limited capacity. Today's 3G wireless networks, for example, transmit only between 400 kilobits per second and 700kbps per user--not enough to replace wire-line broadband connections.

The new mobile WiMax standard, IEEE 802.11e, ratified in December, is considered a promising next-generation wireless technology because it supports high data rates and has a long transmission reach. The technology supports peak data speeds of about 20 megabits per second with average-user data rates between 1mbps and 4mbps. Transmission distances range from a few hundred feet, in densely populated areas, to between one and two miles, in suburban areas.

A WiMax combination?
Cellular still has a longer reach than WiMax, but supporters of WiMax believe that cellular operators could use the technology to augment their networks and provide more capacity for data applications like mobile Web surfing or e-mailing. Mobile operators might also deploy the technology within densely populated areas while using their farther-reaching cellular technologies to service customers in more rural areas.

Intel and Motorola have been collaborating to develop products that can use the mobile WiMax technology. Intel is already working to put WiMax silicon in notebooks starting in 2007. The effort is widely expected to create a mainstream market for WiMax, just as Intel's Centrino platform did for 802.11 Wi-Fi. Motorola and Samsung are also expected to demonstrate the Korean version of WiMax, called WiBro, during CTIA.

But WiMax isn't the only next-generation mobile broadband technology on the table. Qualcomm, which acquired Flarion Technologies last year, plans to use its Flash OFDM (Orthogonal Frequency Division Multiplexing) technology, a modulation technology that sends multiple signals at different frequencies to get the maximum use out of spectrum bandwidth. The company is expected to talk at CTIA about its plans to put the Flarion technology into handset chips.

Next-generation cellular technologies, such as new versions of CDMA (code division multiple access) or UMTS-HSDPA (Universal Mobile Telephone System-High Speed Downlink Packet Access) could also provide higher data rates. Last week, Nortel Networks and Qualcomm announced they had achieved downloads of 7.2mbps based on the UMTS-HSDPA standard. The companies will show off the high-speed capability during a demonstration at CTIA.

Sprint Nextel, which owns a lot of the 2.5GHz spectrum ideal for WiMax and OFDM, is already studying these technologies. It's expected to make a decision by the middle of 2006 on which one to use.

"Everyone is waiting to see how the Sprint Nextel situation will play out," said Philip Solis, a senior analyst at ABI Research. "That will tell us a lot about where these technologies are going."

Upgrade strategies
Sprint Nextel also said Thursday that it plans to upgrade its Sprint Power Vision network, which uses EV-DO (Evolution-Data Optimized), to increase upload speeds. The upgraded service will become available in the first quarter of 2007. The carrier, along with its partners, Nortel Networks, Novatel Wireless, and Sierra Wireless, will take advantage of CTIA to demonstrate Sprint Nextel's new PC cards, which provide the cellular service.

Equipment suppliers will also be debating and demonstrating emerging wireless technologies that are used for broadcasting TV to handsets. The two main ones that will be seen at the show are digital video broadcasting-handheld (DVB-H) and MediaFlo.

These technologies create overlay networks designed to broadcast multiple channels of digital audio and live or prerecorded video programming to handheld devices without using up cellular-network capacity. Both are expected to be commercially available to consumers in 2006. Crown Castle subsidiary Modeo will offer the DVB-H service. And Qualcomm's MediaFlo division will offer its service in select markets. Verizon Wireless has already signed on as a MediaFlo customer.

The MVNO movement
In addition to the technology and networking debates, industry experts will also be looking at mobile virtual network operators (MVNO), which lease network capacity from mobile operators to offer their own service. Big brands such as ESPN and Disney have used their name recognition to launch a service tailored to a specific market segment. ESPN, launched during the Superbowl this year, focuses on hard-core sports fans, while Disney Mobile, which will debut at CTIA this week, will be aimed at moms and families.

Other MVNO's don't leverage an existing brand, but they focus on a specific demographic. EarthLink and Korean giant SK Telecom have formed a joint venture they call Helio, which targets high-tech hipsters. Headed by EarthLink founder Sky Dayton, the company, formed in 2005, is trying to bring the culture of phone use in South Korea--where networks are more advanced and subscribers spend far more time and money on multimedia and entertainment features--to the United States. The service is expected to launch sometime later this year, but Helio executives will be on hand at CTIA to pump up the company's new service.

These new mobile operators don't own cellular towers or the network itself. But they will compete with services offered by traditional wireless operators. Though they may only comprise about 5 percent of the market today, their market share is expected to grow and could reach as much as 20 percent over the next few years, according to some estimates.

"We're at a very interesting time in the industry," said Solis. "Things could change a lot in the next five years, as technologies and markets mature."