Why Wait?

They've become a staple of cellular advertising on TV--those videoconferencing, mobile sales force and other whoop-de-doo applications that will turn cell phones and wireless PDAs into offices away from the office. But it could be a while before your automobile console can replace your desk.

Wireless companies are still building the Third Generation (3G) networks that are supposed to jumpstart the revenues and productivity of America's 40 million road warriors. But a three-year recession, a pile of debt and a slowdown in new subscribers make carriers reluctant to give a date for delivery on the 3G deal.

By year-end, most cell networks will top out at dial-up modem speeds--on a good day. Even when the 3G switch gets thrown-years from now, analysts reckon-Internet data will still flow at a not-so-zippy 70Kbps to 150Kbps.

Meanwhile, at the office--and at coffee shops, gas stations, bookstores, hotels and airports across America--high-speed wireless zones are sprouting like mushrooms after a rain. Wi-Fi (802.11) networks already deliver 10 to 20 times that of cellular networks over a short distance with lots of headroom for more bandwidth, range and traffic capacity.

Wi-Fi wasn't designed for wide-area transmissions, so it's unlikely this local-area technology will replace cellular networks entirely. But by 2004, at least 1 million Wi-Fi access points will be broadcasting to 3 million client nodes across America, some of which could relay data as well, says In-Stat/MDR senior analyst Allen Nogee.

Why not stitch them all together? Analysts and even wireless providers can see mobile work force applications and other 3G data services jumping between 3G and Wi-Fi networks, depending on the application and your location.

Follow-on Wi-Fi flavors like 802.11a include data security and more bandwidth. Companies like San Francisco start-up Vivato have technology to extend the outdoor range of 802.11 access points-up to four miles for Vivato's 802.11 switch. Wireless Internet service providers (WISPs) could create broadband data service areas in cities and suburban areas for businesses and multitenant buildings with just a few inexpensive Wi-Fi access points.

Some WISPs in America's heartland already do this using Wi-Fi with other wireless technologies. Technically, they could add VOIP services in underpopulated areas where wireless carriers can't afford to build cell towers.

But even city dwellers could use better voice services inside tall buildings and commercial complexes. Richardson, Texas, start-up InnerWireless is partnering with wireless providers to turn public spaces like New York City's Rockefeller Center into zones of clear access for cell phone, Wi-Fi and other wireless transmissions.

"Eventually, we'll have a network of Wi-Fi hotspots in businesses and high-traffic areas--and it will complement 3G networks," says Roberta Wiggins, director of The Yankee Group's Wireless/ Mobile Services Group.

When and How?
There are enough bumps and potholes on the road to Wi-Fi "networks" that its time of arrival is no clearer than that of 3G. Intended for LANs near AC outlets, Wi-Fi draws enough power to shorten the battery life and even overheat a cell phone. But power-saving technology from AMD, Intel and Texas Instruments is addressing that problem, and no device will spend that much time in Wi-Fi mode anyway--especially cell phones.

Wi-Fi won't be built into cell phones soon, but there are Wi-Fi and GSM/GPRS receivers in PC Card and CompactFlash form factors for smart phones and PDAs. T-Mobile plans an integrated Wi-Fi/GPRS data card, and Nokia and Qualcomm also have Wi-Fi on their handset roadmaps.

After hardware, there's the challenge of programming all the common logical elements to mix voice and data networks on a grand scale--in other words, a turf war over standards. But there's no insurmountable technological hurdle.

Unlike the nation's cell networks created by a few highly regulated players at great cost, Wi-Fi networks will just spring up in unregulated wireless bands with lower costs shared by many providers. Free of the rat's nest of telecom regulations and billion-dollar bandwidth auctions, Wi-Fi networks will develop more like the PC industry--the result of cutthroat competition.

Expect ongoing issues with interference, security, compatibility and usability--and lots of bankruptcies and takeovers. As in any free market, you'll want to ask the tough questions before entrusting your company's communications to a provider.

On the other hand, that's sort of how the Internet developed. That worked out OK, didn't it?

Mike Hogan is Entrepreneur's technology editor. Write him at mhogan@entrepreneur.com.