3GSM vs WiFi

At Kinnernet, Yossi Vardi’s build-as-you-go conference in Israel, I was thrown into a debate called Cellular vs WiFi. Coming from FON I could have raved about WiFi and spoken about the evils of cellular, or mobile as we say in Europe. But I didn’t. Let’s be honest. The mobile networks are amazing in many ways. Think about the database behind the GSM system, for example, a database that allows any mobile phone reach any fixed or mobile phone around the world. Also the investment that has gone into GSM/3G technology is extraordinary and as a result so is the choice of handset.

At any moment there must be over 50 models available to GSM consumers around the world. So in this debate, I was quick to concede that WiFi, while beginning to make a few attempts to compete with GSM for voice through VOIP, that the road ahead is pretty tough. Especially because 3G, while bad for data is so damn good for voice. So while at first I dissapointed most not taking the hardcore Fonero stance, I did make it clear that I think that WiFi has some areas where it has clearly come out ahead and some in which it’s likely to come out ahead.

WiFi has already won battle with laptops. Attempts by 3G operators to convince laptop makers to have them 3G have been weak and most have failed. Why should you pay for data again if you have already paid for it at home? The same is true of PDAs. Few come with 3G and those which do frustrate their customers because of the serious latency problems that 3G has.

Move on to gaming consoles and there the victory is complete. The two titans, Nintendo DS and Sony PSP are Wifi only devices. Again latency and cost would practically guarantee that a 3G endowed multiplayer participant ends up losing the game. Music is another area that has been left to WiFi. The reasons are clear. While 3G operators love to offer you the latest Justin Timberlake, Brittney Spears, or 50 Cent, they crash under the weight of the long tail of music. I know that I am unusual with my 35GB of music but 8GB is not uncommon in an iPod. Envision for a moment sending 8GB of music over 3G at a dollar per meg. $8000 dollars? No way, dude! And if music is a non starter, quality pictures which weigh as much as a song are WiFi territory as well.

Lastly there’s video, both user generated video and studio movies. Both are really out of the question for cellular. While new cellular networks can handle broadcasts for all to simultaneously see the on-demand nature of say, buying Lost in iTunes, is totally out of reach for cellular. That’s probably why Apple wisely equipped the iPhone with 2G for voice and WiFi and is not about to offer a 3G iPhone. Apple doesn’t want angry parents throwing the iPhone out the window after Kathy has turned her Christmas gift into a money losing pit for Dad. Imagine the cost of downloading a compressed movie into an iPod over 3G. 700MB per movie? Out of the question.

So this is my verdict, Cellular is it for voice, especially for voice on the move. WiFi is unlikely to make it there. And cellular is great for Blackerry type devices giving you all you can eat (but I get you when you roam) offers. Blackberry has found a great way to digest all files into compressed wonders that fit the tiny virtual pipes of the cellular world. But the buck stops there. Music, quality images, video and games are the realm of WiFi. And that’s where FON is headed.