Quotes of the Day

Ask a European mobile-phone exec about fourth-generation cellular technology — 4G — and you can almost see them bite their tongue. These are the same folks, remember, who just five years ago couldn't stop talking up third-generation technology. The pitch went something like this: 3G services, with their high-speed wireless Internet access, would allow us to use our mobile-phone handsets to do everything from making home videos to surfing the Web. If investors would just give them billions of dollars, telecom operators would have the whole world plugged into 3G by, oh, about 2001.

They got their money, from credulous investors and governments, but they are nowhere near keeping their side of the bargain. About 1% of the world's more than 1 billion mobile phone users now have access to 3G technology — and what services they get are clunky and bug-ridden. "The time frame for 3G is still unclear," says Christoph Nettesheim, a partner with Boston Consulting Group in Berlin. "There aren't too many services available today which absolutely need it." No wonder the industry is so reluctant to talk about 4G, a leap in technology that could render all those hideously expensive 3G networks obsolete even before operators figure out how to make them work. "Those operators who are deploying 3G are worrying about what they're going to use them for," says Jeremy Green, a senior analyst with Ovum, a London-based communications research group. "It would be bad if they already started talking about 4G."

The lone exception: NTT DoCoMo. The Japanese operator was the only one to roll out a 3G service in 2001. It only has one million 3G subscribers, but it sees the need for more speed — so it's already pushing into 4G. The company is spending an initial $5.3 million to set up a 4G research facility in Beijing and aims to launch commercial service at 100 mbps — 50 times faster than 3G — by 2010. "We are experimenting, but can't disclose anything about it now," said Tokyo-based NTT DoCoMo spokesman Nobuo Hori. Not to be left behind, the Korean government has earmarked $100 million for 4G research through 2005, according to Ovum. Samsung, which has launched the Samsung 4G Forum, is also pushing the technology.

In Europe, 4G's champions are not the operators — Deutsche Telekom, Vodafone Group, France Télécom and others are reluctant to talk about the next step before they clean up their 3G mess — but manufacturers of handsets and network equipment. In 2001, Alcatel, Ericsson, Motorola, Nokia and Siemens formed the Wireless World Research Forum (WWRF) to explore 4G. The forum, which also includes Asian and North American companies, is studying the way people actually use technology in hopes of plotting a navigable course to the future. In the U.S., major operators haven't even deployed 3G: wary of the huge investment required and the lack of common wireless standards, they are deploying interim technology, dubbed 2.5G. Analysts suggest U.S. operators could skip 3G altogether and move to the next generation.

So what is 4G, anyway? The wwrf defines it as a network that operates on Internet technology, combines it with other applications and technologies such as wi-fi, and runs at speeds ranging from 100 mbps (in cell-phone networks) to 1 Gbits (in local wi-fi networks). Think of Tom Cruise in Minority Report — that scene where he is walking down an aisle and is "recognized" by local advertising networks, which offer products tailored to his consumer habits, in ads that only he can see and hear.

The 4G world will be about much more than handsets. The technology, Alex Lightman says, will give birth to a whole new dress code. You might call Lightman the Gucci of wearable computers — he's one of the few people who dares to openly fantasize about the 4G future. He's even written a book about it: Brave New Unwired World (John Wiley & Sons; 320 pages). He is tireless in his efforts to get industry chieftains and global regulators to forget 3G and focus on the next wave. "4G is not just a technology; it's a lifestyle," he says over a cell phone from his home in Los Angeles. "It's one of those things that when no one company can own it, no one company can control it."

In his day job, Lightman runs a company called Charmed Technology, which makes wearable computers — like the CharmBadge, a palm-size device that creates personalized Web pages tracking a person's activity at a conference to help network with other delegates. In Lightman's vision, a citizen of the 4G world will be wired from head to toe: from sunglasses that include computer screens and miniature digital-video cameras to shirts made of a flexible high-tech plastic that double as TV screens. The technology won't just allow us to access the Internet, it will make us a part of it, as mobile nodes in the worldwide network.

Lightman's enthusiasm for 4G may seem a throwback to the gaga years of Internet hype that ended in the technology bust and global recession. But since it's impossible to tell how 4G will pan out, it's probably a mistake to dismiss his vision out of hand. Green, at Ovum likens the current state of play on 4G to the early years of the World Wide Web: nobody could have imagined then how much the Internet would change the world. "What we're going to be doing with 4G," he says, "is something that nobody even knows about right now."

The wwrf forecasts European deployment of 4G by 2011, according to analysts. At the moment, few European operators care to peer that far into the future: their eyes are fixed on the more urgent matter of making 3G work. Most 3G networks won't be launched until next year. And the few that are already in operation serve as cautionary tales. The 3 network, majority-owned by Hong Kong's Hutchison Whampoa, is launching 3G operations in nearly a dozen countries and has been plagued with problems. In Italy, the first set of 3G phones, from Japan's NEC, were not only expensive — at $720, they cost 10 times as much as some regular cell phones — they didn't work very well and tended to get hot. (The new generation of 3G phones are going for around j300.) "There were problems on video calls with heat dispersion, but it's been resolved," says Vincenzo Novari, the ceo of 3's Italian operation. "The battery life is weak if you use a lot of 3G applications."

Amid the bad press and customer complaints, 3 started giving the phones away in Italy. Customers who pay a j99 connection fee, spend j30 a month and receive at least 60 minutes of free calls are eligible for a free phone. Novari says the problem now is getting enough phones to meet demand. "If we had 600,000 phones this summer we would have sold them all, but we only had 300,000," says Novari. "We will meet our goal of 1 million subscribers within our first year of service." Novari says profit margins on data calls — like video and Internet access — are 80%, more than twice the margin in current 2G networks.

Novari also sees evidence that 3G is changing the cellular business. His company is marketing heavily to couples and families who use video conferencing to stay in touch. In the past three weeks, he says, 135,000 soccer clips were downloaded by 3's video goal service. "The handsets will change next year because we now have a multimedia platform," says Novari. But 3's video service still needs to prove itself. Customers have complained about shoddy service, bad video and the high price. Other 3G customers say their calls get cut off when they move out of the limited-range 3G networks and into a 2G zone. The problem hasn't been resolved.

To make matters worse, a new study published in the Netherlands last week suggests signals from 3G networks could be a health hazard. People in a test group exposed to 3G signals "felt tingling sensations, got headaches and felt nauseous," a spokeswoman from the Dutch Economics Ministry said. It's too soon to say what impact the study will have on demand for 3G services, says Bram Oudshoorn, spokesman for Royal KPN NV, the dominant Dutch telecommunications company. "It was good that they did a study, because it must be clear that 3G is not a hazard," he says. "This study is not conclusive, however. It is good that the government said it will do further research."

After the overhyped birth of 3G, it's easy to see why there is so much attention focused on the shortcomings of the embryonic services. And like many people in the industry, Motorola 3G specialist John Thode says that's a reason to resist hyping 4G. "I think of 4G as a kind of convergence of technologies," he says. "There isn't one of these technologies that isn't already here today. It's not something new and different," he says. But if it works really well, it may seem that way.

• WILLIAM BOSTON
• After the 3G flop, can 4G connect with consumers?