WSJ article, courtesy of John Hayman on SI
EV-DO Technology
May Be Next Big Thing
By ALMAR LATOUR and JESSE DRUCKER
Staff Reporters of THE WALL STREET JOURNAL
March 18, 2004; Page B1
When George Bishop walked out of his dentist's office in San Diego last month, he got a panicked call from a colleague with a massive computer problem.
Mr. Bishop, an information-systems director for a small pharmaceutical company, quickly pulled out his laptop and started working. Within minutes, he gained access to his company's internal system, found the necessary data to solve his colleague's problem and fired off a few e-mails telling a co-worker how to tackle the task.
The trick? Mr. Bishop's laptop -- like those of 28 of his colleagues -- is equipped with a wireless access card linking the machine to his company's network from practically anywhere in the region.
Mr. Bishop says the service, offered by Verizon Wireless at $80 a month, has saved him money on phone and Internet bills at hotels when he travels and has made his work hours more flexible. "If there is a critical issue over lunch, we can actually solve the problem even if we're not at the office," he says.
Mr. Bishop is one just of a few users of the wireless Internet service. But Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, hopes that will change soon. The nation's largest cellular-phone company is investing $1 billion in the coming two years to upgrade its network to enable wireless Internet access at speeds comparable to digital subscriber lines or cable-modem connections. By year's end, the carrier plans to cover roughly one-third of its network with the new technology, according to a person familiar with the matter, making the service available to nearly 80 million people in dozens of cities. The service will expand further in 2005.
Verizon Wireless hopes that the technology, called EV-DO, which stands for "Evolution Data Optimized," will generate new revenue in years to come. The service has been available in metropolitan Washington and San Diego since late last year, using equipment from Lucent Technologies Inc. and Nortel Networks Corp. Verizon Wireless is expected to unveil more details about the rollout at the Cellular Telecommunications and Internet Association trade show next week in Atlanta.
EV-DO is different from Wi-Fi, a wireless technology that mushroomed over the past couple of years. Wi-Fi generally can be used in a radius of up to about 300 feet from a transmission station, or "hot spot," which in turn is linked to an existing landline network. Wi-Fi is featured at many coffee shops and fast-food restaurants around the country, as well as in many people's offices and living rooms.
By contrast, EV-DO can provide a longer, wider range coverage of wireless access to the Web over a cellular network and offers an average data speed of 300-500 kilobits per second. It even could be used by a passenger in a moving car or train.
But EV-DO technology has its drawbacks. Because it relies on cellphone networks, EV-DO won't work in "dead spots" where a regular cellphone signal is weak, including deep inside some buildings. And in places where Verizon Wireless service depends on "roaming" agreements with other cellular providers, users may have to settle for a slower connection, using older data-transmission technology. In most cases, EV-DO wouldn't be a practical replacement for conventional wired Internet connections such as DSL or cable modems.
Most major wireless carriers in Europe and Asia, where sending and receiving data on cellphones is far more popular, also have experienced hiccups in rolling out similar services. In the U.K., Sweden and Italy, a wireless operator called 3, which is controlled by Hutchison Whampoa Ltd., features handsets with large color screens, video-conferencing capabilities and services such as downloadable video clips. But battery life on the handsets is so short that it's impractical for serious users at this point.
Still, some analysts say the impact of EV-DO in the U.S. could be significant. "The best thing that can happen is that this really is the beginning of wireless data as we hoped and envisioned it, because until now wireless data has been a barely satisfactory event at best," says Roger Entner, a wireless analyst at Yankee Group, a technology consulting firm in Boston. "With EV-DO, the network is definitely not the problem anymore."
The price of the service, geared to business users, is expected to drop as more sign up. Subscribers tap into the technology by plugging a special card into their laptops. Equipped with a miniantenna, the card connects the laptop to Verizon Wireless's network and establishes an Internet connection.
Later this year, Verizon Wireless also expects to roll out consumer applications based on the technology, and to offer EV-DO personal-digital assistants and cellphones. Possible services could include gaming, downloadable video and music clips, and news services. The carrier eventually expects consumer services to make up a significant part of EV-DO revenue.
Verizon Wireless isn't the only company trying to bring faster wireless Internet service to the masses. AT&T Wireless Services Inc. last year launched "Edge," which offers wireless access to the Internet in most areas where it has cellphone service, though at slower speeds than EV-DO.
Other wireless Internet services in the U.S. include the so-called Vision service from Sprint Corp., which has speeds comparable with a dial-up connection. And Nextel Communications Inc. is testing a technology called "Flash OFDM," which promises even faster speeds than EV-DO, equaling that of a high-speed Internet line called a T-1.
Verizon Wireless has higher hopes for EV-DO than it does for Wi-Fi, but that doesn't mean Verizon and other phone companies are abandoning their Wi-Fi plans. Since last year Verizon has installed some 500 hot spots, many of which are converted phone booths around Manhattan through which Verizon DSL customers can access the Internet free of additional charge. While that helps Verizon keep customers on its network, the falling price of Wi-Fi equipment is making it easier for smaller competitors to poach its customers.
One competitor to EV-DO are so-called hot zones, or large areas such as office buildings or university campuses that have multiple Wi-Fi stations, allowing seamless wireless access to the Web and even wireless voice calls over the Internet connection.
What's more, small wireless Internet-service providers are using variants of Wi-Fi, or various proprietary technologies, to provide wireless Internet access with ranges of several miles. That could become an even bigger threat for big cellular carriers like Verizon Wireless when a new long-range wireless standard known as WiMax becomes available, expected later this year.
Write to Almar Latour at almar.latour@wsj.com and Jesse Drucker at jesse.drucker@wsj.com
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