Minutes for voice costs are plummeting, so it's not justified for voice. But Web access is questionable to justify. It will cost billions to upgrade to 3G, and that might end up with too high a price point for services. In the final analysis, however, he believes that wireless providers need to build the infrastructure to support these kinds of data services, which will account for the majority of their business in years to come. As cost improves and competition increases, the amount of subscribers has put a strain on the networks.
Wireless data is our new opportunity to increase the market.
But he also believes that difficulties in justifying the cost of building out 3G means that serious 3G work may not happen for another three to four years in the United States. Some carriers may decide that the less costly incremental move to 2.5G technology, which, after all, promises to improve throughput fivefold or more-will be sufficient for the time being. Carr Krueger, a partner in the technology, media, and communications group at Arthur Andersen, agrees. A 2.5G network should provide throughput as high as 128 Kbps to 384 Kbps, he contends. Most carriers don't have a burning desire to be first to market.