3G and 4G Wireless Networks 1

3G and 4G Wireless Networks

Kelly Lynch
Dr. Sergey Samoilenko, PhD
Information Systems and Decision Making
Strayer University
October 28, 2012

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Abstract
3G and 4G networks have a lot of similarities, but when it comes to speed, 4G LTE is the service many people are looking for. Unfortunately, 4G LTE is largely unavailable in rural areas and the cost of the service is substantially high, forcing most users to use a 3G service until these factors change. While the technical differences between 3G and 4G service can be a little confusing, buyers can compare upload and download speeds, customer perceptions and service availability to determine what service is best for them.

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For consumers, the differences between a 3G network and a 4G LTE network can be a little confusing but there is some good information available to the discerning shopper. For those who wish to learn a little more about 3G and 4G technology, examining what each network does and does not offer, can help them decide which service is best for them.
3G and 4G Networks Both 3G and 4G networks offer similar services and applications to their customers. They both offer faster and better connection to the Internet, enhanced audio streaming, video conferencing and TV through the Internet support (Unuth, 2012). While 3G networks offer wider coverage, 4G networks can be up to 4-10 times faster than 3G networks. In many rural areas, consumers can only use 3G networks while 4G services are currently more available in metro areas. However, with the introduction of Apple’s new iPhone 5, it’s possible that more 4G users will emerge over the next few years in areas that were previously unable to support a 4G network. “Many new phones offer you faster speeds with their ability to connect to the 4G LTE network. Apple’s new iPhone is expected to offer this capability. You currently need a new phone because this technology is so different compared to the changes with 4G service” (“New Apple”, 2012). One of the advantages for a 4G user is that if they are in an area that only offers 3G services, their 4G services will default to a 3G service. This is not an option for 3G users. Their phones will not upgrade to 4G if it’s available to them in area that carries it. While 4G service providers promote faster and easier Internet access, these enhanced features may not make that much of a difference to the average 3G user. Currently, 4G LTE services are geared
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toward heavy data users or iPhone users (Strathman, 2012). “If you are looking at basic email, basic web browsing, no, you’re not going to see much difference” (Strathman, 2012). No matter which service the consumer chooses, the cost isn’t cheap. 4G services can cost anywhere from, $100.00 to $300.00 with a contract, and $450.00 to $600.00 without a contract. 3G services can run from, $54.00 to $500.00. For Services and applications, 3G services use CDMA 2000 and UMTS. 4G services use Wimax2 and LTE-Advance. For their network architecture, 3G wireless uses Wide area cell based services and 4G services merge wireless LAN and Wide area. 4G has a wider throughput than 3G allowing more data to come through as well. Typically, 3G throughputs can be up to 3.1 mbps while 4G’s throughputs can potentially range from 100 to 300 mbps. While this kind of data may be a little confusing to the average buyer, there are some perceptions about each service that may or may not help a buyer decide what they want. One perception is that 3G offers fast Internet service and is user-friendly when developing apps for billing purposes and videoconferences. It’s also a popular platform for games that contain a lot of animation and graphics. It’s thought to be cheaper than 4G LTE services and that’s generally true. Many buyers also have the perception that 4G is widely available for use right now when in fact; it’s still being developed and has a limited number of users and availability in rural areas. “For users, not understanding how 4G differs from one carrier to the next can mean getting and being stuck with, a slower phone for the next couple of years” (Nguyen, 2011). Because companies like AT&T and Verizon couldn’t wait to start promoting the benefits of 4G, many consumers felt they had to have it. What they failed to tell their customers is that while 4G services are excellent for speed, there are some drawbacks to the service. “As an end-user, you
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should know that while HSPA+ and WiMax have been providing some progress in terms of speed, all 4G networks aren’t equal. LTE is currently the king, by a good margin” (Nguyen, 2011). Because users frequently want what advertisers tell them they should want, they may end up buying a service they can’t use. “You should realize that the coverage in ‘your’ area is what matters. Things can be very different from one part of town to the next, and local construction features like metallic structures can affect reception” (Nguyen, 2011). It’s important to note that 4G LTE is still in its early stages so bugs and glitches can occur at any time. It does offer more security than 3G Wi-Fi but its limited availability makes it difficult for some businesses to acquire it. It’s speed, security and great connectivity appeals to many consumers, but before they fall into the trap of, “I must have the 4G LTE service”, buyers should be aware that they could actually use 3G wireless for less money and very little to no difference in the services it provides.
Characteristics of 4G LTE, 4GWiMAX and 4G WiBro networks Different companies own 4G LTE, 4G WiMAX and 4G WiBro, but the services have one thing in common. They are all extremely fast. Verizon provides 4G LTE, which means Long Term Evolution. It’s the fastest service with upload speeds ranging from 5-12 Mbps when downloading information and 2-5 Mbps when uploading information. Sprint owns 4G WiMax, which stands for, Worldwide Interoperability for microwave access. 4G WiMax has upload speeds of 3-6 Mbps and download speeds of 1 Mbps. The Korean owned WiBro, (short for wireless broadband), had 4.2 Mbps when uploading information and 1.49 Mbps when downloading information. It’s important to note, that speeds may vary according to location and service availability but consumers can get a general number for speeds when deciding what they
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are looking for in a service. For user perceptions, 4G LGE is the most widely known service and owners of the new iPhone 5 are enjoying the 4G LTE technology. WiMax is owned by Sprint and is lesser known than the LTE technology. “WiMAX started out as a way to deliver wireless broadband to homes and businesses. In many parts of country, ‘wireless ISP’s’ still deliver home broadband via WiMAX” (Segan, 2012). Although Sprint announced mobile WiMAX in 2006, by the time they built their network, it was 2008 and WiMax was on its way out before it ever really got off the ground in the West. “While Sprint dithered, the whole cell phone industry turned away from WiMAX (and Intel) to LTE, which came from the same folks who brought us GSM and promised much better compatibility with existing cell phone equipment” (Segan, 2012). WiBro is the least known 4G service of the three but has shown promise in areas of speed and cost. While its largely unknown to the average user, the WiBro service is fast and affordable. It may become a more popular service in the future. All three services offer backward compatibility but the 4G LTE has the least amount of problems reverting to a 3G service when necessary. “LTE has another key performance advantage: It’s better integrated with other cellular technologies, making for smoother transitions between 3G and 4G. WiMAX phones tend to have problems finding 4G again once they drop into a 3G area. LTE phones have less of an issue with that” (Segan, 2012). For service availability, all three services can be used in large metro areas but service is still largely limited in rural areas. For users wishing to download large amounts of video, the 4G networks can be very helpful. For the average user, the expense and limited availability keeps 4G out of their reach. With advances in technology and availability, the next few years may show an increase in 4G usage and subscribers.
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Competition among 4G carriers Put simply, competition among 4G carriers is so fierce because of money. Once they’ve made the initial investment in setting up the network, maintaining that network is relatively inexpensive. The business of providing data is a lucrative one and the company that can provide the fastest Internet service and grow the biggest customer base, wins. Competition among the providers is good for the subscribers because companies like Verizon and Sprint will offer incentives and packages to grow their customer base. Each company will try to “outdo” the other one in order to gain as many customers as possible and the customers love being “courted” by competing companies.
Why Verizon is the winner When it came to the competition between AT&T and Verizon, AT&T came out swinging but lost to Verizon wireless when it tried to acquire T-Mobile in 2011. AT&T knew it needed to invest billions of dollars to upgrade its networks but they had to overcome several obstacles to get there. The first obstacle was their shaky reputation. In its quest for growth, the company had become known for poor customer service and dropped calls. “The iPhone may have brought it millions of new customers and billions in revenue, but the vast increase in data usage has also strained the network to unacceptable levels. There wouldn’t have been so much hype surrounding the Verizon iPhone if AT&T’s network didn’t drop so many calls and upset so many customers” (Parr, 2011). Verizon was clearly pulling ahead of AT&T in customer service and AT&T needed to act fast if they wanted to keep their customers happy. The second obstacle for them was their own infrastructure. AT&T didn’t have the towers they needed to expand their
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network. “It takes years to get the approval to build new towers, especially in metropolitan areas such as San Francisco. Without a dramatic move, AT&T’s network wasn’t going to get better anytime soon” (Parr, 2011). The company found a way to get around this problem by acquiring T-Mobile for $39 billion dollars from Deutsche Telekom. T-Mobile didn’t offer 4G networks but they had towers; and it was those towers that were going to help AT&T repair its reputation and overtake Verizon Wireless. Unfortunately, this never happened for AT&T and in 2011, they were challenged by the U.S. Justice Department for anti-trust violations. “The combination of the country’s second-and-fourth-largest wireless carriers would violate antitrust law and substantially lessen competition. The Justice Department asked U.S. District Judge Ellen Segal Huvelle to block the deal, the largest announced acquisition of the year according to data compiled by Bloomberg” (Schoenburg, Forden & Bliss, 2011). This left AT&T no alternative but to fight the decision or pay a substantial breakup fee to T-Mobile. In the end, AT&T ended up paying the company $4 billion dollars and the game was lost. While AT&T tries to recover from this massive setback, Verizon wireless will continue to win more subscribers and expand its 4G coverage. Without the towers to support their infrastructure, AT&T simply cannot compete with Verizon’s coverage at this time. 3G and 4G LTE are similar services. They both offer better and faster connections to the Internet, enhanced audio streaming and videoconferencing. The main difference between the two services is speed and availability. Asking questions, reading customer reviews and researching what each service offers in their area, is an excellent way for customers to decide which service they prefer
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References
Nguyen, Hubert. (2011). 4G networks: where are we at? Retrieved Oct 27, 2012 from http://mylifescoop.com/2011/05/25/4g-networks-where-are-we-at/
Parr, Ben. (2011). Why AT&T bought T-Mobile. Retrieved Oct. 27, 2012 from http://mashable.com/2011/03/20/att-mobile-ope/
Schoenburg, T., Forden, S., & Bliss, J. (2011). T-Mobile antitrust challenge leaves AT&T with little recourse on takeover. Retrieved Oct. 27, 2012 from http://www.bloomberg.com/news/2011-08-31/u-s-files-antitrust-complaint-to-block-proposed-at- t-t-mobile-merger.html
Segan, Sasha. (2012). WiMax vs. LTE: should you switch? Retrieved Oct. 27, 2012 from http://www.pcmag.com/article2/0,2817,2403490,00.asp
Singleton, Michah. (2012). 4G explained: what is LTE? Retrieved Oct. 27, 2012 from http://mashable.com/2012/06/12/4g-explained-what-is-Ite/
Strathman, Jenn. (2012). New Apple iPhone 5 to offer 4G LTE-so what is it? Retrieved Oct. 27, 2012 from http://www.net5.com/dpp/money/consumer_specialist/New-Apple-iphone-5- expected-to-offer-4G-LTE---so-what-is-it
Unuth, Nadeem. (2012). 3G technology-what is 3G? About.com Retrieved Oct. 27, 2012 from http://voip.about.com/od/mobilevoip/p/3G.htm