InformationWeek

September 25, 2000

It's A Wireless World

Wireless technology is the primary network interface in many areas of the world. And although U.S. service providers have built networks, usage lags behind other areas.

By Terry Sweeney

More on wireless:

sidebar: Schwab Takes It Slow On Its Wireless Service

sidebar: Wireless Messaging Lets United Be Proactive

Tele.com: Standards (9/18/00)

TechWeb: Nortel Inks $100 Million Wireless Deal in Spain (9/7/00)

TechWeb Finance: Deutsche Telekom Flexes Global Muscle (8/28/00)

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ractitioners of the hybrid discipline called cultural anthropology can detail the diet of the Anasazis, the religious practices of the Druids, even the work ethic of the ancient Hittites. But they can't explain the difference in wireless usage between the United States and the rest of the world.

Service providers have built networks, but users haven't come, at least not in the United States. Whether for data or voice, wireless use in the United States has historically lagged behind Europe and pockets of Asia-Pacific such as Australia, Japan, Hong Kong, and Singapore.

"The more you travel, the more it becomes clear that the primary interface to any sort of network is wireless," says Andy Lippman, a senior research scientist at MIT. "So it's certainly striking when you come back to America that we're seemingly way behind." Lippman is also director of the Digital Life research program at the MIT Media Laboratory that explores new forms of communities by studying structured media, learning, human expression, interfaces, and agents.

Market numbers push that impression into stark relief. There have always been more wireless subscribers in Europe than in the United States. But in 1997, Western Europe alone overtook U.S. subscribers--56.8 million to 55.5 million, according to the Strategis Group, which counted both cellular and digital data users in those figures. Wireless use is growing faster in Western Europe than in the United States: In the second quarter of this year, Western Europe counted 218 million users to only 88.5 million users in the United States.

"I hate to put Europe in one bucket," says Dan Black, director of E-commerce systems for United Air Lines Inc. "If you compare the United Kingdom, Germany, and France, we're on a fairly similar adoption rate. But Europe also means Scandinavia--Finland and Sweden are way ahead of anyone else in Europe."

Clearly, the United States is hardly a sleepy market. But the longstanding discrepancy in wireless usage has led many IT executives to ponder whether wireless E-commerce will follow the same limp trajectory. Will a populace that has embraced the PC and the DVD player with such speed and enthusiasm spurn the wireless wallet or shun the Wireless Applications Protocol (WAP) phones now hitting the U.S. market?

Those are big questions that American corporate IT is asking as they test the waters for delivering--via a wireless interface--such things as access to Web portals, pager-style alerts that tell customers important updates such as "Your flight's been delayed," shopping services, or even a universal in-box for voice-and E-mail. There are also longer-term possibilities for wireless Internet. Security personnel could monitor locations via streaming wireless video. Or an executive could initiate a voice-or videoconference by hitting the "Call Broker" icon on a handheld's touchscreen while watching the stock market. Some even foresee broadband wireless heralding the era of Personal Area Networking, where wireless technology would replace the landline pay phone: while strolling in a mall, a shopper wants to check another store's price, so he opens a connection with the mall's broadband microcell.

IT executives are still learning what kind of interface best fits customers and each service. Maybe the interface should be a WAP phone, maybe a Palm VII, or as one IT executive says, "Maybe it's something we've never considered as a wireless 'device' per se, such as a piece of furniture, a car's steering wheel, or a pair of eyeglasses.'' What is known is the hype: Witness the fashion spread in the magazine of the Sunday New York Times a few months ago: Gaunt generation Y'ers wore techno-jackets with an MP3 player and a wireless phone sewn into them. Yves St. Laurent, meet Dick Tracy.

But it's likely that clothing designers won't be able to foist wireless on American consumers any more easily than Sprint PCS has. Regardless of the application or user segment, critics point to three main areas that have been a drag on wireless uptake in the United States.

The technology is far from mature. Industry analysts say today's measly 9.6-Kbps or 14.4-Kbps connections on wireless don't let users do anything interesting. And with so many different kinds of terminals, operating systems, and digital cellular flavors at work in the United States, it's difficult for third-party developers to create applications that a mass market would buy.
Academics say increasing the usage of wireless data in the United States is simply a matter of better marketing and education. American consumers aren't aware of all the cool things they can do with a wireless terminal while waiting in airports or stuck in traffic. But even as Nokia touts the trendiness of its WAP phones, AT&T, Verizon Communications, and other wireless service providers have done a poor job explaining what their subscribers can do with the new Wireless Web.
A third group points to cultural, social, and regulatory differences that make wireless more attractive for European and Asian users and less desirable for Americans. They cite the cost of a PC vs. a mobile phone: Consumers are hard-pressed to find a new, adequately equipped desktop or notebook for less than $2,000, while a mobile phone that supports cellular and digital data can be found for about $300. They note the ubiquity of the landline network in America, which in other regions isn't a given. And some blame the practice of "calling-party pays," traditional in Europe but only now reaching the United States. This practice ensures that the initiator of the call pays the freight, rather than the traditional model in the United States, in which wireless users pay to make and receive calls. This has made many U.S. users reluctant to give out their wireless numbers as readily as their Euro-counterparts.