You are on page 1of 5


WiFi Vs 3G: Is 3G going to die? (February 2006)
Mr. Syed M Hassan, MIEEE MSc. Communications Engineering The University of Yotk, UK.

Abstract— This report is intended to be a survey of the comparison between third generation mobile telephony (3G) and wireless local area network (Wi-Fi). Wi-Fi and 3G technologies are used within this article as a platform for discussion. 3G is a collection of services that was designed to offer mobile users high speed data and voice services over a mobile network and Wi-Fi refers to the Ethernet standard 802.11x designed to provide wireless access for Local area networks. Although both the technologies are very different from each other they are both intended to provide broadband wireless internet access to portable devices. An examination of the basic infrastructures is then provided along with the discussion of various technical issues that can be evolved while providing this type of service. Viability of 3G in the presence of its rival technologies is also discussed. It will then conclude with an opinion on the various effects on 3G market place.



HE explosive parallel growth of internet and mobile telephony had a great impact on telecommunication over the past decade. Now, these two entirely different worlds are converging. The union of these two offers the benefit of the internet multimedia with the flexibility and mobility of wireless. To provide high speed internet connection without the restriction of boundaries is the main idea. Third generation mobile technology was developed to achieve this goal. There is another wireless technology which was designed to provide connectivity to the portable devices for local area network which is known as Wi-Fi, had emerged in the last decade. The goal of this report is to compare 3G and Wi-Fi technologies which are likely to play a role in this convergence. This report will focus on 3G which is IMT-2000 standard versus most popular and widely used wireless LAN standard IEEE 802.11b/g or Wi-Fi. These technologies which have an entirely different philosophy are used by this report as a reference to focus on how wireless internet access might evolve. Billions of pounds of investment have been made to obtain licenses and to purchase expensive equipment to support high speed data rates. Equipment manufacturers are developing base stations and handsets for large scale

deployments for 3G services. On the other hand, Wi-Fi operates in the unlicensed ISM band which does not require huge amount of investment, atleast to acquire licenses. Equipment is cheap as compared to 3G base stations. What it does require, is the deployment over a large scale. This report will not discuss other technologies which are considered to be important to provide wireless internet such as WiMAX, Satellite, DVB-S/DVB-RCS or other fixed wireless alternatives. However, this report will provide a brief introduction of mobile generations in the initial sections but detailed comparison of these generations such as 2.5G GPRS or EDGE is beyond the scope of this report. The focus will be on 3G and Wi-Fi (802.11b/g) as a point of discussion that have distinct origins and entirely different histories. A brief overview of Wi-Fi and 3G is provided in the section II. This section describes the history and the standards associated to these two technologies. A basic cost analysis is then shown in the section III. Most resent deployments and the market reviews are presented in the section IV and finally, the conclusion is provided in the section V of this report. II. TECHNOLOGY

Fig. 1. Adopted from GSA (Global Mobile Suppliers Association), shows the evolution of mobile generations.

In this section, a brief overview of the technologies is given to supplement the reader’s knowledge. A. 3G Third generation mobile phone technology was designed to provide mobile phone users access to anything, any where and any time. 3G is an integration of fixed and mobile communication networks, internet and broadcasting, for

Copyright University of York, UK.

2 example; Television broadcasts can be seen using a mobile phone. This can only be achieved with the higher data rate. The data rates supported by 3G are: • 2Mbps ( Indoors, Max. speed up-to 10 km/h) • 384 Kbps (sub urban, Max. speed up-to 120 km/h) • 144 Kbps (Rural, Max. speed up-to 500 km/h) Development efforts were started in 1988 when International Telecommunications Union defined requirements for 3G. In 1992 World Administrative Radio Conference (WARC) defined frequencies for Future Public Land Mobile Communications which is now known as IMT2000. In June 1998, 10 satellites based and 5 terrestrial based radio interface solutions were submitted to ITU. Finally three of them were selected, W-CDMA from Europe, cdma2000 from USA and TD-SCDMA from China. Ideally there should be only one standard throughout the world as one of the reason behind the great success of GSM technology was that it was a single standard at least in Europe, “how good it would be if they carry on the same spirit throughout the world”[9]. In December 1998 third generation partnership project (3GPP) was established. 3GPP is an agreement of collaboration between a number of telecommunications bodies like Association of Radio Industries Association (ARIB Japan), China Communications Standards Association (CCSA), Alliance for Telecommunications Industry Solutions (ATIS) and Telecommunication Technology Committee (TTC). According to 3GPP,“The original scope of 3GPP was to produce globally applicable Technical Specifications and Technical Reports for a 3rd Generation Mobile System based on evolved GSM core networks and the radio access technologies that they support (i.e., Universal Terrestrial Radio Access (UTRA) both Frequency Division Duplex (FDD) and Time Division Duplex (TDD) modes). The scope was subsequently amended to include the maintenance and development of the Global System for Mobile communication (GSM) Technical Specifications and Technical Reports including evolved radio access technologies (e.g. General Packet Radio Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE))”[4]. This is a very brief history of the great efforts which have been made to provide up-to 2 Mbps to a mobile device. B. Wi-Fi Wi-Fi refers to IEEE 802.11 standard for wireless Local Area Networks (WLAN). Wi-Fi is mainly used to connect devices without the use of wires and allows them to share network resources such as printers, file storage and broadband internet connection. Wi-Fi provides broadband to Wi-Fi enabled devices by using back haul Internet connection. Wi-Fi operates in 2.4/5 GHz unlicensed ISM (Industrial, Scientific and Medical) band. Discussion about all the standards related to 802.11 is beyond the scope of this report. Only 802.11 a/b/g are intended to be discussed. IEEE 802.11a operates in 5 GHz ISM band and can achieve up-to 54 Mbps data rate. IEEE 802.11b and 802.11g operates in 2.4 GHz ISM spectrum and can support data-rate up-to 11Mbps and 54Mbps respectively. IEEE 802.11g is also backward compatible with IEEE 802.11b, which means that devices based on 802.11b can connect to 802.11g and vise versa. Copyright University of York, UK. 802.11g is the most popular due to dual mode operations and simplified RF design. 802.11a required much more complex and expensive RF circuitry to operate at 5 GHz Frequency and hence did not catch up. In general Wi-Fi can provide a coverage up-to 10s of meters. Multiple base stations can be used in order to increase the range of coverage. Each area served by a particular base station is known as a Hot Spot. There could be several hotspots in a building and hundreds of them in a city. Universities and a large number of corporations had deployed their hotspots to various locations such as Airports, Hotels, coffee shops and train stations all over Europe and America. Recently a UK based company named ‘The Cloud’ has announced city-wide Wi-Fi coverage in the nine major cities in the UK including London, Manchester and Birmingham. Wi-Fi has also reached to trains and coaches for example a US based company ‘WiRan’ is providing broadband connection to the coach passengers using Wi-Fi and EDGE. Wi-Fi does not provide hand-offs between base stations. A user has to remain in the same cell in order to receive continuous service. It is widely seen that Wi-Fi is used for data-services such as web-browsing, e-mail clients and file transfers. However, it is also possible to use wireless LANs to transport real time voice and video traffic as well, which enables Wi-Fi to support voice telephony services over Wireless LANs.

In order to undertake the cost comparison between 3G and Wi-Fi capital expenditure (CPX) and operational expenditure (OPX) have been taken in to account. This estimate is focused entirely on the last mile access network which is the most dominated area in the field of telecommunications. CPX includes base station (BS) equipment cost, site development cost and installation cost, whereas annual operational and maintenance, power consumption, site lease and transmission costs are included in OPX. This estimate does not include the license fee, which is 4 billion pounds in the UK for 20 years license. Other costs such as depreciation are beyond the scope of this report. A. Mobile Base Station Costs The approximate figures are provided to estimate the costs of typical 3G base stations. Initial expenditure [1] • There are three variations in the configuration of the base stations: 3 sector with 1 carrier per sector approximately £35K/BS 3 sector with 2 carrier per sector approximately £55K/BS 3 sector with 1 carrier per sector approximately £75K/BS • Site build cost approximately £50K/site • Site installation approximately £20K/site Annual Cost[2] • Site lease: This cost is entirely site dependent. According to a rough estimate: 6 to 7 K in urban and 2 K in suburban • Transmission cost approximately 2 to 3 K per annum which is subjected to increase by 5% a year

3 Power consumption cost is estimated to be 3% of equipment cost • Operational and maintenance (O&M) cost is estimated to be 5% of equipment cost Annual cost [7] • Site lease This cost is entirely site dependent. According to a rough estimate: 6 to 7 K in urban and 2 K in suburban • Transmission cost approximately 2 to 3 K per annum which is subjected to increase by 5% a year • Power consumption cost is estimated to be 3% of equipment cost
TABLE 1.1 MOBILE BASE STATION COST SUMMARY Cost Categories Urban Suburban BS Equipment cost (K £/BS) 35/55/75 Site Build out ( K £/Site) 50 Site Installation ( K £/Site) 20 Site Lease (K £/Annum) 6.5 Average 2 Transmission (K £/Annum) 2.5 Ave. (5% annual rise) Power consumption (K £/Annum) 1/1.7/2.3 O&M ( K £/Annum) 1.80/2.80/3.80

TABLE 1.3 MOBILE BASE STATION COST SUMMARY No. of Urban Suburban carriers 5yrs 10yrs 5yrs 10yrs per sector 1 102.93 CPX ( K£) 2 123.51 3 144.10 1 63.54 123.58 39.52 75.55 OPX (K£) 2 71.78 140.05 47.75 92.00 (New BS) 3 80.01 156.52 56.00 108.5 OPX (K£) 1 13.72 27.45 13.72 27.45 (Upgrade BS) 2 21.95 43.91 21.95 43.91 3 30.19 60.38 30.19 60.38 1 166.5 226.5 142.5 178.5 Total Cost( K£) 2 195.3 263.6 171.3 215.5 (new BS) 3 224.1 300.6 200.0 252.6 1 116.7 130.4 116.7 130.4 Total Cost ( K£) 2 145.5 167.4 145.5 167.4 (Upgrade BS) 3 174.3 204.5 174.3 204.5 Above table is reproduced from [8]. OPX= Operational Expenditure, CPX= Capital Expenditure, BS= Base Station, K= 1000

related to individual sites are considered here. These costs can be divided into following major categories. Initial Cost Wireless router and other equipment cost (Ave.): 700G.B.P. Site Installation: The site installation cost is a function of the number of sites and the number of access points per site. Assumptions have been made that on average 5 labor hours required to install and configure a typical WLAN Access point. This gives approximately 200G.B.P/Site. Life cycle: Approximately 5yrs Per Annum Cost Site Lease: This part of the cost is not considered due to the existing infrastructure of broadband service providers. Transmission: Taking into account the existing wired infrastructure of broadband service provider for last mile communication to the WLAN access point, this part is not included in the estimate. Annual O&M: 5% of the total hardware cost. This cost is too small as compare to the mobile base station cost.

Above table is reproduced from [8].

Operational and maintenance (O&M) cost is estimated to be 5% of equipment cost

Table 1.1 summaries the cost estimate for mobile base stations.

New BS CPX BS Equipment Site Build-out Site Installation OPX Annual O&M Power consumption Site Lease Transmission Yes Yes Yes Yes Yes Yes Yes

Upgraded BS Yes No Yes Yes Yes No No

Above table is reproduced from [8].

2G sites can be re used by upgrading and adding more transivers in order to cop with 3G. In this case site build-out, site lease and transmission need not be considered. Different cost elements for new and upgraded base stations are summarized in Table 1.2. The cost per base station can be estimated according to different configurations. The results have been provided in the Table 1.3 based on 5 and 10 years life cycle periods. B. Wireless LAN Costs WLAN cost estimation is based on [2]. The author performed detailed cost estimation in tow steps, modeling of the cost on the basis of individual sites and cost which is shared between many sites for example cost of the router which connects various sites and the rest of the internet. In order to keep this report simple only the capital expenditure and running costs

In October 2005 Philadelphia, one of the most historic cities in the US, announced the plan to build the city wide wireless broadband network. This network will be the biggest (135square-miles) municipal wireless network in the United States of America. It will provide wireless broad band access to low income residents just under $10 per month. “A growing number of cities in the US are treating highspeed internet as a basic amenity for citizens, like running water or the electricity grid but as the concept expands so does the battle with big business”. [5] A UK based company known as The cloud provides multi service platform to ISPs, mobile and cable companies to offer their customers a best possible wireless LAN experience and ease of use. By supporting all the major internet service

Copyright University of York, UK.

4 providers, site owners can also maximize their potential revenue. City of London Corporation announced a roll-out of the WiFi network throughout London with the partnership with The Cloud. London city will go live within six months. The idea is to utilize street furniture and lamp posts to mount WLAN access points. As London is Europe’s most visited city, this roll out will allow millions of visitors and local people to access internet any time and any where on or off the streets using their Wi-Fi enabled devices such as laptops, PDAs and Wi-Fi enabled mobile phones. Chief Executive of the Cloud said, "Providing ubiquitous datarate. Third generation mobile system promises mega fast data connectivity and an increase in capacity of the network. Wi-Fi provides the better datarate at a lower price as compare to 3G. However, 3G provides ubiquitous coverage. Initially coverage was an issue with Wireless LANs but after the recent deployments of very large number of Hot Spots around the world, it is now possible to access the internet at the broadband speed in the majority of the places in the major cities. If a user wants to surf the internet or download multimedia contents, it can be done with a nice cup of coffee in the relaxed environment which would be rather more pleasant than checking the emails while moving at the speed of 144 km/hr. Regarding 3G, different people have different views. Some people believe that 3G is viable others think that it is a waste of time and money for the standardization bodies, service providers, consumers and the people who are still trying to develop a killer application for it. It seems that the mobile market has left its users behind. It is observed that majority of the people use mobile phones just to make voice calls or sending Short Text Messages, even if they are on a 3G network. One of the possible reasons 3G is not been widely accepted that mobile devices are getting smaller and the users cannot do much with such a small screen. The information people need on the mobile devices does not have to be updated at super fast speed and it is not worth watching a movie on a screen 2” x 2” which increases the bill by a factor of 4. As the numbers of Hot Zones are increasing, it seems that Wi-Fi will be a big rival of third generation mobile phone network in the near future. REFERENCES
[1] K. Johansson, A. Furuskar, P. Karlsson, and J. Zander. “Relation between Base Station Characteristics and Cost Structure in Cellular Systems”, paper submitted to IEEE PIMRC, 2004. K. Thompson. “Large Scale Deployment of Public Wireless LANs- a Feasibility Study”, MSc Thesis, Royal Institute of Technology (KTH), Feb. 2003. J. Wang, “Will WiMAX + WLAN Constitute a Substitute to 3G- A Techno-Economic Case Study”, MSc Thesis, Royal Institute of Technology (KTH), Mar. 2004., last accessed 15 March, 2006., last accessed 12 March, 2006 m , last accessed 11 March, 2006 , last accessed 13 March, 2006 , last accessed 16 March, 2006 D.J Pearce, Lecture Notes on “Personal and Mobile Communications”, 2006 5_3.htm

Fig. 2. Adopted from [8], showing the basic infrastructure of The cloud network.

wireless broadband access, over a network that is available to millions of Wi-Fi devices, and will be available to the new generation of Wi-Fi phones, gaming devices and other applications will have a major impact on the way people communicate, work and play in city centers," [5]. Most of the mobile phones which are now available in the market have Wi-Fi chip installed. By just pressing a button on the mobile phone the device can by-pass the mobile network and connect to the internet in order to make the cheap IP phone calls. According to BBC, a company known as BROADREACH and net telephony firm SKYPE has announced a roll-out of their services to 350 hotspots around UK. Users will be allowed to download the FREE Skype software from the internet. Then they will be able to make internet phone calls either PC-to-PC or PC-to-Phone using Wi-Fi air interface. Telephony over WLAN is becoming very popular; there are around 28 million WLAN users all over the world. Broadreach have covered virgin mega-stores, the Travelodge chain of hotels and all the major rail terminals in London and currently serving around two million users.



[4] [5] [6] [7] [8] [9] 1. 2. 3. 4. 5.



First generation mobile systems used analog technology for voice transmission, Global System for mobile communications (GSM) also known as 2g, become digital, adding more capacity and letting data to be transmitted. General Purpose Radio Service which is 2.5g upgrade of GSM it provides data-connectivity by allowing packets of data to be sent separately from voice. Enhanced Datarate for GSM Evolution marked as 2.75g, allows GSM to handle 3G level of

Syed M Hassan (M’02) has done his BE from Hamdard University, Pakistan and currently he is doing MSc. in Communications Engineering at The University of York. He has been involved in various projects both hardware and software based since 1999. His current research interests includes low cost transivers design, antenna design, radio wave propagation, advanced

Copyright University of York, UK.

modulation and coding techniques, digital signal processing and electromagnetic compatibility issues for wireless systems. Previously he worked as a networked administrator at Orient Enterprise in Pakistan for 2 years. He is a member of IEEE since 2002.

Copyright University of York, UK.