The wireless communication business is on the threshold of a major revolution. Riding on the coat-tails of the great success of 2nd generation cellular telephony, the business is just getting past the disappointment of initially slow adoption of the 3rd generation networks. Particularly challenging has been the slow adoption of wireless datacom and multimedia offerings, once expected to be the driver for wireless network design in the 21st century.

As the title suggests 2G and 2.5G networks were successions of the early "1G" analog wireless networks.

The main difference between 1G and 2G is that 2G networks are digital whereas, 1G was analog. While first-generation systems primarily supported voice traffic, second-generation systems support voice, paging, data, and fax services.

As 2G networks gave a considerable leap in terms of quality they dominated businesses in terms of users, revenue and scale. While still extremely profitable, they are engaged in a cut-throat battle of competitive pricing. Consequently, much of the focus in these businesses are in cost-reduction and resource efficiency. Many large operators are putting pressure on their vendors to reduce costs of equipment. In part, this reduction comes from advances in semiconductor technology, specifically in the RF domain. Direct conversion transceivers, for example, are expected to reduce costs by removing the entire IF segment from the receiver segment. In large part, cost reductions also come from reengineering existing components and adding more sophisticated algorithms to improve resource usage, reliability and adaptability. Adaptive Coding and modulation, a technology that has been around for nearly 30 years now, is only recently getting widespread commercial deployment, thus bringing in corresponding benefits in capacity enhancements.

A second focus is in the rapid deployment of services. This was triggered by the runaway hit of messaging, one of the recent 'killer' applications. Services such as ring-tone downloads, mobile gaming and messaging bring huge revenues to the operators with very tiny cost in resources. Operators want to be able to rapidly offer these services in a very scalable and customizable manner. This requires advanced service delivery platforms which are just now hitting the market.

3rd generation cellular networks, till very recently, remained amongst the bigger disappointments of our times. Plagued by bloated regulatory license fees, and slow adoption, they nearly caused a crisis for the communication industry five years back. Part of the issue was unrealistic expectations of public demand - the demand for data services is not nearly as high as anticipated. Another part was in technology not being ready. Replacing 2nd generation networks requires a complete change of hardware as well as software, which is simply too expensive for most operators.

Recently, however, we are seeing the resurrection of the 3rd generation networks. Handset technology has caught up to the point where there are affordable, usable and sleek 2G/3G phones available and MMS and other bandwidth intensive applications are slowly catching on. Europe and Asia-Pacific are at the forefront of deployments of the next generation of UMTS (Universal Mobile Telecommunications Service) networks. Mostly centered around urban areas, UMTS networks are now achieving economic viability in terms of capacity, coverage, revenue realization and operational cost. It will still be a very long time till they start supplanting earlier networks significantly; however, that is the direction in which they are operating

A relatively recent success story has been the rapid interest and commercialization of Wireless LAN technologies. WLAN, and later complementary technologies such as WiMAX have already seen rapid spread in the personal communication domain. Part of the reason for this is the nature of the technology. UMTS and other 3rd generation technologies were hit initially by massive investment requirements, both for highly over-priced spectrum licenses and the cost of cutting over large networks. WLAN and WiMAX technology, on the other hand, were spear-headed by small companies selling chips and components for personal use, using an unlicensed spectrum. As the movement caught on, aided by massive investment of companies such as Intel and a strong standardization effort, the spread of WiMAX and WiFi seems unstoppable.

There are caveats to this story, however. One is the experience of history, where we have seen many highly touted technologies fall to over-hype and technological immaturity. WiFi/WiMAX is no exception. While many first generation problems have been solved, there is a vast gap between public perception of what this technology can deliver and practical experience in the lab of what is actually achievable in current systems. To be able to deliver on promises, many problems have to be fixed before the wave of 2nd generation deployments take place. These issues include deployment of smart antennae, QoS management in ad-hoc networks, interworking with mobile IP, and power management among others.

The handset and terminal business has been a key driver for mobile communications, so much so that it deserves to be a technology category by itself. The communication system is only a small part of the handset overall; a typical handset incorporates multiple technologies, multimedia capabilities, and a significant number of PDA functions. More and more high and medium cost handsets nowadays have image capture and transmission capabilities as well.

The key direction in handset technology is the incorporation of sophisticated operating platforms, Java and other high-end UI middleware and the adoption of mainstream operating systems ( Microsoft Windows Mobile, Linux, etc.). The challenge now is to package sophisticated applications into a sleek form, with optimal usage of screen space, processing power, memory and user interface.