There are now 40 million fixed internet connections in Europe, butandwidth, but there are still some hurdles left to jump. over 200 million mobile phones. Even though both markets will continue to grow, the mobile one is expected to stay more than four times larger.

You don't have to be a genius to realise that, in the future, mobile connections will be much more important than fixed ones.

Indeed, the magical figure of one billion forecasted worldwide mobile users has been brought forward from 2005 to 2003. Next year, 10 to 15 per cent of all mobile handsets are expected to be internet-capable. With this in mind, wireless technology looks set to be the technology that delivers e-commerce and customised information to the mass market.

This may be so, but will the current infrastructure cope? Already GSM digital mobile networks are saturated with traffic. In highly-populated urban areas it is not uncommon to experience dropped calls or even no line at all.

Anyone who's tried to live the mobile office dream will have torn their hair out with maximum data rates of only 9.6Kbps. Clearly something has to be done and the details are being hammered out as you read this - it's called third-generation (3G) technology.

The first analog mobile networks were known as first generation. Then came digital (GSM in Europe), which represented the second generation of mobile networks. Now 3G technology is being finalised for public consumption early next century.

The key driving factors for 3G networks are increased capacity, high bandwidth multimedia applications, and global roaming. We're already painfully aware of the limitations of the first two, but anyone who's taken their GSM mobile abroad to Europe or portions of Asia will return with joy that their phone actually worked (albeit incurring a large bill). However, a trip to the US or Japan could leave you disappointed in the compatibility stakes.

These limitations of second generation networks are well known, as are the opportunities for the future. They're both recognised by the ITU which has defined a set of standards, technologies and protocols to be used worldwide by 3G mobile networks. The ITU refers to these as IMT-2000, which has a cunning dual-meaning, referring to both the new millennium, and also the bands to be reserved for wireless access.

The ITU is responsible for allocation across the globe, and after much head-scratching came up with a set of paired and unpaired bands around the 2,000MHz bracket for IMT-2000. It is worth remembering that second generation GSM operates in Europe on 900MHz (Vodafone and Cellnet in the UK) and 1,800MHz (Orange and One2One in UK), while selected portions of North America use 1,900MHz. Hence the demand among users for dual or even triple-band mobile phones.

Bleeding signals in the US

Frequencies around 2,000MHz are fine for Europe and most of the rest of the world, but the 1,900MHz standard employed by North America is too close to the 2,000MHz frequency and will lead to signals bleeding into each other. As a result, North America may have to allocate the 1,900MHz bracket to another frequency. This rather gets in the way of the IMT-2000 proposals.

It is hoped that the 3G standards being set in Europe and Japan will overcome this problem and be able to operate in that very tight spectrum allocation, taking us one step closer to a true global mobile system.

Agreeing on a set of frequencies and the available bandwidth is only one half of the story - as the old saying goes, its not the size that matters, but how you use it.

We're talking about the air interface and how valuable bandwidth is divided up and used. Europe and Japan have already settled on a system known as WCDMA (Wide Code Division Multiplex Access) for its 3G networks. It employs two modes known as Frequency Duplex Division, (FDD), and Time Duplex Division, (TDD). Both operate on 5MHz carriers, FDD on paired channels and TDD on unpaired channels. Europe has even sorted out a name for its 3G system - it's called the Universal Mobile Telephone System, or UMTS for short.

The whole world is watching

The US, however, is playing 'odd one out'. It currently has three widely deployed second generation mobile networks, each with its own planned evolution towards IMT-2000. The first and second, IS-136 and GSM 1900, look set to converge by employing similar forthcoming mobile packet-switched technologies. The third system is the one the world is watching most closely.

The confusingly titled, but widespread cdmaOne (IS-95) will evolve into cdma2000, which divides up its spectrum using a multi-carrier (MC) mode, which is entirely different to WCDMA's FDD and TDD modes.

In order for a proper global system to be realised, it's imperative that cdma2000 and WCDMA are integrated into a single unified 3G standard. The operators harmonization group has just submitted a proposal to the ITU, suggesting a unified Wideband CDMA standard be set, consisting of the three operational modes of WCDMA and cdma2000. This proposal has already been publicly backed by Nokia amongst others, but it's down to the ITU to make the final decision. Its hoped that in order to meet the scheduled roll-out of 3G systems, that the ITU finalises such a standard in its meeting in Helsinki in October this year.

One of the most compelling 3G applications is broadband multimedia - tossing aside the restrictive 9.6kbps data rates of current GSM in favour of variable speeds up to 2Mbps. With speeds like that, mobile video-conferencing becomes a reality, as does fast access to the internet. 3G networks will also support always-on connections to various services, allowing you to have instant wireless access to the corporate Lan, and immediate delivery of e-mail without all that tedious dialling up. Per second billing will also become a thing of the past, as we are instead charged for actual data transmitted. All fantastic stuff, but how will 3G achieve these dreams?

Believe it or not, but soon-to-be-released extensions to the second-generation networks will offer much of this performance, and provide a bridge to third-generation systems. The backbone to the entire concept is IP and packet switching, which effectively shares the networks resources among all those connected.

Circuit switched connections, which open a fixed channel and keep it open even when no data is being passed, may have been suitable for voice communication and basic downloads, but for most data applications they represent a waste of money to the user and a waste of resources for the network. Consider web browsing, where the user only requires transmission of data when moving to a new page. In this instance, a circuit switched connection, as used by current mobile phones, spends most of its time idle. Packet switching is the key. This would allow precious resources to be shared between a large number of users. Bandwidth would be allocated on demand and as a result high data rates could be offered at sensible prices.

Much-heralded arrival of GPRS

The most exciting development of the second generation mobile networks will be the General Packet Radio Service (GPRS), expected on UK networks early next year. GPRS adds a packet switched layer to conventional circuit switched mobile networks with all the benefits described above.

The existing system will also be enhanced with high-speed circuit switched data (HSCSD), which increases the basic single slot data rate of 9.6 to 14.4Kbps, but also allows multiple slots to be aggregated or joined together.

Up to four slots are being suggested, which allows HSCSD to boast up to 57.6Kbps. Using GPRS on a single slot may only offer 21Kbps, but sharing multiple slots will allow it to reach up to 100Kbps.

It doesn't end there. EDGE (Enhanced Data rates for GSM Evolution) can boost HSCSD and GPRS rates by up to three times again. By using a new radio interface with enhanced modulation, circuit-switched data rates could reach 38.4Kbps, and packet switched rates up to 60Kbps, each on a single time slot; per 200Khz GSM carrier, that's up to 400Kbps.

HSCSD, GPRS and EDGE will be deployed in that order, and are being referred to as 2.5 generation. Full 3G networks build on this with increased capacity and higher data rates in areas of high demand.

It's believed that 3G will only be deployed in specific and demanding areas such as central business districts. Outside of these, the mobile user will roam onto existing GSM and 2.5G networks using multi-mode phones.

There will be islands of 3G in a sea of second generation.

The developments towards 2.5G are therefore not only an essential development to support and measure demand for 3G, but in many cases offers sufficient performance for those telecoms carriers who have not been granted a 3G licence.

The UK has been granted five UMTS licences, four of which are expected to be won by our existing GSM operators. The fifth is open to discussion.

Despite owning Cellnet, BT may bid for its own UMTS license, as may Deutsche Telekom and Virgin. As described above, any 3G operators will either need the support of existing second-generation infrastructure, or an agreement with such an operator in order to realise broad geographical coverage.

3G mobile networks are certainly hot stuff. Along with the wireless application protocol, and smart phones, we can expect high-performance broadband services from a wireless terminal. IP and packet switching, so common to the world's wired networks, will be the enabling technology.

AT&T, BT, Rogers Cantel, Ericsson, Lucent, Nokia, Nortel, Telenor and TIM have just announced the formation of a 3G.IP focus group to develop an entirely IP-based architecture for 3G mobile systems. Will voice over IP kill circuit-switching? Will future phones be bundled not with talktime, but units of data? And will the ITU agree on a Wideband CDMA standard? The answers are coming soon.

FUTURE APPLICATIONS

There is a huge range of potential killer applications that could find their way onto next-generation mobile networks.

Smart cards are expected to rear their heads. If you've always got access to the internet on a mobile device, then why not use it as the platform for e-commerce? Smart cards could be inserted or swiped through a future handset to make a wireless purchase online. This could be a killer application within a shopping centre. Some would call it swipe-card-shopping.

Great weight is also being placed on personalised services and delivery of customised content. Work is also being carried out to allow 2.5G and 3G networks to support Virtual Home Environments, which would carry your preferences with you as you roamed around the world.

And you can't mention global roaming without bringing up satellites.

While it is hoped that a unified standard can be agreed on for 3G networks, there will still be the need in certain environments for roaming on extra-terrestrial systems - satellites. While most of today's effort is in finalising the terrestrial component of 3G, the ability to support satellite access is built-in from the start.

3G CELLS IN PRIVATE NETWORKS

A terrestrial mobile network works on a series of overlapping radio cells, each with varying capacity and coverage. Buildings in urban areas, along with high capacity demands, result in cells being as small as a few hundred metres, whereas a little-used cell in an open area may cover an area of kilometres.

UMTS cells typically have a much smaller range than GSM cells, but like the 2G system, are built in three main varieties. Macro-cells operate over a wide area up to one kilometre and service fast-moving, high-mobility users. Micro-cells are used at a street level and provide extra capacity where a Macro-cell is struggling; UMTS Micro-cells operate over a 400m distance. Smaller still are Pico-cells, which under UMTS, may have a range as little as 75m, but offer higher performance in areas such as shopping centres. GPRS is the key behind all UMTS high data rates, offering up to 384kbps to high mobility users in Macro-Cells, and up to 2Mbps to low mobility users within Pico-cells or quiet Micro-cells.

It's expected that privately-owned, licence-free Pico-cells could be the key to many killer business applications. If you're considering building a wireless Lan in your company, forget Ethernet 802.11 and look at a 2.5 or 3G Pico-cells instead. Stationary or slow-moving users within a building could enjoy access to the corporate Lan at 400kbps from EDGE and 2Mbps from UMTS. Since these technologies will allow users to remain connected all day and only pay for data sent, this effectively offers a high-performance wireless Lan.

Better still, if you own the Pico-cell, then the charging is down to you. Since it interfaces with your PBX, you can enjoy cheap 'outside' calls and free direct dialling to internal extensions. You could also continue a connection as you wander out of the building and seamlessly roam onto a public network. Shopping centres could install Pico-cells and deliver high-quality audio and video content with the temptation of discounted calls while within their walls. Future enhancements to 3G could see Pico-cell rates as high as 155Mbps. Forecasts predict around 40 per cent of Pico-cell traffic will be on private networks.