From the September 2004 issue of Entrepreneur

It may be the most overworked promise since low-cal foods and secure Windows computing. But 3G (Third Generation) cell phone service is coming-honest. A handful of cities already have test projects, and several more will have them by year-end. In general, cellular providers are moving up 3G rollout plans, so most major U.S. cities should have at least one offering by the end of 2005.

What's changed? It's all about the Benjamins. Cellular companies, which haven't been willing to invest the money to make 3G happen before, now plan to spend upwards of $1 billion each. Heightened competition and falling voice prices are forcing them to search for new revenue sources, explains Alex Slawsby, senior researcher with IDC, a research firm based in Framingham, Massachusetts.

What's it mean to you? Maybe some improvements in voice call quality from better network trafficking. But 3G is primarily about data-zippy downloads of e-mail, text messages and corporate files over your cellular network, and faster, more graphical Web browsing. With digital phone cameras and MP3 audio all the rage, 3G networks could provide a boost for streaming audio, full-motion video and transferring high-resolution color photos. Also expect more phone and PDA applications to tap company calendars, phone books and other data.

Cingular Wireless says upgrading its GSM/GPRS/ EDGE network with UMTS may even provide a broadband connection for homes and businesses out of reach of cable or DSL. UMTS delivers consistent data rates of 130Kbps and top speeds of 384Kbps. But Cingular is also testing a faster version with top speeds of 14.4Mbps in Atlanta. Cingular buyout target AT&T Wireless plans similar tests in San Francisco, Seattle and two other unnamed cities before the end of the year.

A different 3G technology is required for the CDMA protocol found on most American cell phones. Sprint plans to upgrade its entire CDMA network with EV-DO, a high-speed wireless data network, which delivers average data speeds of 300 to 500Kbps and peak download rates of up to 2.4Mbps. At its slowest, EV-DO will accelerate Sprint data rates to about that of most wired broadband connections. Sprint plans the upgrade for select markets later this year and for most major metropolitan areas during 2005.

Verizon Wireless, which has been offering EV-DO service for $80 per month in San Diego and Washington, DC, plans to expand 3G to about a third of its network by year-end and continue rollouts in 2005.

All upgrades require purchasing 3G-capable handsets or laptop PC cards, which should be more expensive than current generations, says Slawsby, but will deliver vastly improved operating and display capabilities.