The future in 3G

Third-generation mobiles could boost production as well as consumption - if only network developers would develop them. Early in June 2002, the Coalition Provisional Authority in Iraq made a little-noticed concession. Bringing Iraq a mobile phone network was something that could no longer be postponed until after an indigenous government took office. Instead, the Americans put out requests to 10der not just to America's Motorola, but also to Alcatel, Ericsson and other European providers of second-generation (2G) phones (1).

By contrast with 2G phones, 3G phones offer a modest version of broadband over mobile networks. That means they handle voice calls and SMS messages, colour snapshots, email and web access, as well as video clips, locational services and payment services. With 3G networks, as with broadband, there is no dial-up - they are 'always on'. In prospective, at least, they offer not just the fast visual and aural delights of broadband, but the reliability of professional equipment. They will not just be a fun toy to play with, but a powerful tool for organisation and endeavour.

So Iraq may have to wait for 3G. Western capitalism is prepared to wait an unconscionable amount of time for it. First, British mobile network operators spent most of their tiny 2002 budgets for new infrastructure on 2G rather than 3G networks. Worse, British firms are not even demanding mobile intranets to aid the productivity of their more and more peripatetic workers. They do not - or perhaps can not or will not - see the point. Last, even the mighty Nokia, which gets 50 per cent of its revenues from business customers for mobiles, will not sell European businesses 3G handsets equipped with industry-by-industry business applications until 2005 or 2006 (2).

Given the indifference Western business shows to 3G networks, Iraq looks like getting them only when it regains its sovereignty. Nevertheless, when the Americans opened the Iraqi 2G market to Global System for Mobile Communications (GSM) - the 10 kilobits per second (kpbs) system that Europe developed - the move was significant. In business, as in the war against terror, the US showed itself forced to play a multilateralist card. And that card was surely noticed in what will be the world's largest market for 3G phones: China.

In China politicians have already led both America and Europe a merry dance around the classicals that the country will adopt for 3G. Will it go for America's CDMA 2000 phones, which build simply on its old Code Division Multiple Access networks and run at around 100kbps? Or should the Middle Kingdom instead plump for Europe's Wideband CDMA phones? They are based upon GSM but, since they handle a hefty two megabits per second, represent a tough and expensive technological leap up from it. Or should Beijing rather adopt its own flavour of 3G?

Conflicting classicals partly explain why 3G has been such a long time coming. But a more important impediment has been the politically motivated ridicule that has attached to 3G. In the wake of the dot.bomb and 'WAP is crap' episodes, both stock market analysts and IT funksters have united in condemning 3G as a grand, top-down, Technology Push solution - all the more risible for being advanced in a world where the only good innovations are modest and based on Market Pull: on popular needs, sexy handset designs, and delightfully usable interfaces.

In 3G, therefore, we have a vital symptom of the hostility to technological innovation that so of10 dogs the West nowadays. On both sides of the Atlantic, the feeling is growing among management buffs that innovations are best developed not simply as Big Lab corporate efforts to reach radical goals, but as a mix of existing technologies brought about by 'open' networking with savvy users, entrepreneurs, small R&D houses and universities (3).

In this kind of climate, an innovation like 3G is regarded as hubris, as the wrong and old-fashioned way to go - in a word, as Republican and top-down in inspiration, rather than Democratic and peer-to-peer in flavour. As ever, the international IT community generally, if implicitly, holds the democratic approach to be the correct one.

So 3G is uncool because it is too ambitious and not bottom-up enough. Instead of suppliers building it and hoping that consumers and businesses will flock to it, suppliers wait. They wait for consumers to develop new consumer applications; they wait for businesses to get round to wanting to make investments in organising their internal data so that their workers can have mobile access to company information. Meanwhile, everyone likes to worry about all the security problems that corporate use of 3G will bring.

As it happens, Asia's richest man, Li Ka-shing, has already won half a million British and Italian consumer subscribers to 3G through his company Hutchison Whampoa. But despite that achievement, the City still pokes fun at his hopes of boosting his base to a total of two million subscribers by year end. Indeed, his order of 3 million 3G handsets from Motorola and NEC has been derided as 'misplaced confidence' (4). 3G is, the Financial Times observed, Li Ka-shing's 'boldest bet to date': a write-down on it 'could be seen as an admission of defeat and dent his image as the shrewdest of investors' (5).