Wireless Technology - An Overview

by Paul Budde
 

Introduction
Wireless access to voice and data services is swiftly becoming the core strategic issue in the
telecommunications industry. Equitable and economical access to customers facilitates fast roll
out of services and enables profitable operation. Cordless access technologies have been helping
to achieve this ideal.

Current issues include:

 the exploitation of microwave point-to-multipoint systems particularly for data and

internet applications
 the introduction and/or expansion of Digital Enhanced Cordless Telecommunications
(DECT) and other similar technologies as wireless access methods for residential and
business subscribers
 the emergence of Wireless Data Centrex, which provides opportunities for many
operators to enter the previously sheltered market of data access within buildings, (a key
development for European carriers in particular)
 increased competition in local loop access such as use of CATV fiber optic cables and
other radio technologies for telephony and data transmission
 privatization of former government-owned monopolies in telecommunication markets
continues to present new opportunities
 many new ventures in the cordless world have been initiated by a collaboration of
industry players, rather than just single organizations, leading to development of
international standards. Examples include Bluetooth (a wireless standard interconnecting
mobile phones and computers) and Symbian (an operating system for wireless personal
digital assistants)

The market is for cordless products is still growing rapidly because users have realized the value
of wire-free access. It has already derived many benefits from wireless PBXs and LANs. These
include:

  lower cabling costs

  better staff productivity

  reduced phone bills

  greater flexibility

  improved reliability
  integration of wide-area and on-site systems

Customers have become confused over the proliferation of standards and have raised concerns
over the security, safety and strength of cordless technology. However, the PBX suppliers do see
cordless access as an important part of their 'next generation products'. The real issue is
marketing. The major technical issues regarding cordless access technology have been solved.
The suppliers who come out on top will be the ones who add value for users by exploiting the
intelligence in their products.

The following table gives an overview of the 4 main cordless standards available. It should be
noted that CT-2 has become outdated and completely phased out in many countries.

Exhibit 1 - Overview of cordless standards - 2001

System CT-2 DECT PACS PHS
Main area of Public areas Business Business   Public areas
application
  Business

  Home
Caller Calling only Send + receive Send + receive Send + receive
(public) calls calls calls
Speech coding 32 Kb/s ADPCM 32 Kb/s ADPCM 32 Kb/s ADPCM 32 Kb/s ADPCM
Path transfer (hand None Yes Yes Yes
over)
Frequency band 800 MHz 1.9 GHz 1.9GHz 1.9 GHz
Radio access FDMA -TDD TDMA-TDD TDMA-TDD TDMA-TDD
No. of TDMA 1 12 8/16/32 4
multiplexed circuits
Bit rate 72 Kb/s 1.15 Mb/s 384Kb/s 384 Kb/s
Frame duration 2 ms 10 ms 2.5 ms 5 ms
Peak power 10 mW (5 mW) 250 mW (10 200mW (25mW) 80 mW (10 mW)
(average) mW)
Error detection CRC CRC CRC CRC
Control Associated Associated Embedded Dedicated control
channel/control control channel control channel Control channel
method
Channel assignment Autonomous Autonomous Autonomous Autonomous
distributed distributed distributed distributed
control control control control
DECT Cordless Technology
Introduction
DECT was standardized in 1992 by ETSI as a pan-European specification for short-range
cordless telephones, wireless PBXs, public access service and wireless local loops. Regulatory
authorities regarded DECT as good solution as they were having problems in controlling widely
differing types of cordless telephony in the market. Other problems included inadequate security
against eavesdropping and the use of diverse and prohibited frequency bands. The DECT Forum
claims that DECT is used in more than 110 countries around the world with over 45 million
terminals expected to be shipped this year. An installed base of 200 million units is projected by
the end of 2005

DECT Standard
The DECT standard (ETS 300 175-1 to 8) primarily defines the parameters for the air interface
between a mobile station and a base station. A summary of the standard features follows:

Exhibit 2 - DECT standard features

Transmission Type Digital
Multiplex Procedure FDMA/TDMA
Modulation Technique GFSK
Frequency Range 1880-1900MHz
Carrier Spacing 1.728MHz
Duplex Channels/Carrier 12
Number of Carriers 10
Total Duplex Channels 120
Traffic Density 10,000 Erlang per Square kilometers
Maximum range 300 meters
Mobility Speed 20-50 km/hour
Cordless access will be a crucial element for the next generation of on-site voice and data
communications systems. It is of central importance to suppliers in both markets:

 for PBX suppliers who are faced with a saturated market and lengthening product lives
 for LAN suppliers, it has opened the way to a high risk, but potentially very profitable,
new market for wireless LANs

A primary incentive for installing wireless technology in offices is reducing the cost of system
installation/alteration for organizations that often relocate workers. In the case of voice systems,
mobility and productivity of office workers are probably stronger selling points than the long-
term cost savings anticipated from wireless LANs.

CT-2 and DECT were once rival cordless technologies in the European market. DECT, however,
has replaced most CT-2 installations due to its superior feature set, including support for ISDN
services, fast hand-over and enhanced signaling capabilities. The equivalent of DECT in the
USA is Personal Access Communications Systems (PACS) whilst Personal Handy Phone
System (PHS) is the Japanese equivalent.

DECT technology provides:

 high transmission quality using digital techniques, interrupt-free handovers and ISDN
voice
 adequate security against eavesdropping with data encryption
 high data transmission with speeds up to 2Mb/s
 error detection and correction facilities such as CRC, ARQ and FEC (which also leads to
enhanced data security)
 comprehensive interworking facilities with other networks: ISDN, X.25, LAN, and GSM
 can be used for voice, data and multimedia in the private, business and public sectors
 operation of picocellular networks in extremely high user densities: 10,000 users per
square kilometer possible
 standardized radio interface
 dynamic channel assignment techniques
 self-organizing, thus no frequency planning required

Today, equipment based on DECT is being used in homes, offices, factories and in public places.
The first products available were based on Ericsson's proprietary DCT900 technology. The air
interface standard, Generic Access Profile (GAP) EN 300 444, is used in association with the
common interface standard provided in EN 300 175. ETSI has also developed a standard for
DECT access to the Internet.

DECT is known for its flexibility since it can handle virtually any form of telecommunications
access. However, competition has arisen in situations where no real alternatives have previously
been. For example, it has recently been threatened in the business market by GSM's high
capacity 'Office-In-A-Box' solution.

The DECT/GSM Hybrid

Cordless access technologies make very efficient use of airwaves. Such efficiency has resulted in
tariffs up to 40% cheaper than cellular mobile. They can handle more than 100,000 users per
square kilometer. On the other hand, cellular mobile does provide much wider mobility and as
cellular penetration grows this tariff advantage is being lost.

The addition of DECT to a GSM network offers the prospect of extending a network's reach into
high-traffic indoor areas such as offices, exhibition centers and shopping malls. Users in these
types of environments only require access on the premises and never move faster than at the
walking speed. On the other hand, GSM provides continuous wireless access for people who
may be traveling at high speeds (such as those in cars or trains), or who may be roaming from
one country to another.

Cellular network operators and hardware vendors linked the two technologies in the late 90's.
Dual mode handsets were developed which initially search for DECT access before resorting to
GSM access. If DECT access is found, a range of virtual PBX services are accessible such as
dialing between telephone extensions. Call charges and other costs can be set according to which
access is in use at the time. For example, all calls made via DECT access would accrue to the
employer's account while all calls made via GSM access could be sent to the customer's personal
account. Interest in a dual mode GSM/DECT service culminated in the launch of BT Cellnet's
Onephone service in May 1999. However the high cost of the handsets and the ongoing
development of 'behind the PABX' GSM offerings led to the closure of the service shortly
afterwards.

Table 1: The Future of DECTDECT-ISDN Integration

The integration of ISDN and DECT has resulted in a system that delivers mobility, all the new
ISDN features, non-interrupted hand-over ensuring signal clarity, excellent security and high
quality of signal transmission. Typical applications include the following:

 DECT wireless systems that are adjuncts to new or existing PABX's, with up to 128
cordless phones connecting to the PABX as analogue extensions. These systems support
integrated paging and LAN based text messaging to handsets
 A family of ISDN based, wireless PABX systems supporting up to 150 DECT terminals.
These can be used as stand-alone wireless PABX's or as adjuncts to larger wired PABX's
 Single line (analogue extension or PSTN) DECT cordless phones
 ISDN compatible corded telephones
Personal Handy Phone System
Introduction
The Japanese equivalent to DECT is PHS (Personal Handyphone System), however from the
outset, it was developed as a public access product, not as a home or business cordless system.
This major difference has helped PHS become a successful competitor to conventional cellular
mobile phones in Japan. The initial rapid expansion had a lot to do with the unique regulatory
and pricing environment of mobile communications in Japan. It was originally developed in
response to a need for a digital cordless telephone system. It has been adopted in Japan in two
main applications:

  Public Mobile Service;

  Wireless PBX, with possibility of roaming between all three modes.

PHS is also suitable for Wireless Local Loop and high bit-rate data services.

The Japanese PHS market peaked in 1997 at 7.07 million subscribers and then began falling due
to pressure from mobile cellular competitors impacting on subscribers. By October 2000 the total
number of subscribers in Japan had stabilized at around 5.8 million. Currently, there is some
optimism that PHS could have a major come back due to its superior voice quality and higher
speed data transmission. The three main Japanese service providers - DDI-P, NTT DoCoMo, and
TT Net (previously Astel) - have been aggressively promoting PHS. The superior voice quality
of PHS has attracted many corporate customers although younger generations have switched to
iMode services in Japan. The data speed of PHS is currently at 64kb/s and it is expected to
deliver 128kb/s in the Spring of 2002.

PHS is being deployed in China under the name of Personal Access System (PAS). PAS has
already been deployed to around 130-160 cities in China. The number of subscribers is now
around 5 million. It has been estimated that the infrastructure deployment cost of PAS in China
is US$130 per subscriber. The per minute charge for PAS services in China at just 10% of the
cellular mobile charges has been a major stimulant to growth.

In addition, the success of Telecom Asia in promoting PHS over the cellular companies in
Thailand has renewed hopes that PHS can succeed in other markets. There are currently around
500,000 PHS users in the greater Bangkok metropolitan area. There are plans that PHS public
access systems will also be deployed in Bangladesh and Taiwan.

PHS Technical Standard

The Personal Handyphone System (PHS) standard is a TDD-TDMA based low tier microcellular
wireless communications technology operating in the 1880 to 1930 MHz band, now used by
millions of subscribers worldwide in public PHS networks, PHS-WLL networks, corporate
indoor PBX applications and in the home environment. The cell installation architecture, which
uses dynamic channel allocation, requires reduced cell station installation planning and costs for
the operators, and can be cost effectively deployed in environments ranging from urban to rural
environments.

The standard supports a 32kbps bearer capability on each of the 24 TDMA frame slots, allowing
32kbit/s ADPCM high grade speech quality and a variety of data transmission applications. PHS
users experience voice quality comparable to wireline service, and commercially available
operating data transmission speed between of 64 kbps. Soon, 128 kbs and faster speeds will be
available on PHS. The PHS data transmission technology is based on the PIAFS data protocol
whose use in existing public networks already occupies 15% of the total network traffic and 45%
of the total calls, continuing rapid growth. Users enjoy high speed web browsing, file transfers
and convenience of e-mail access anytime, and anywhere. There are currently 15 to 20
manufacturers involved in handset production, with more than 40 models supporting high voice
quality and a minimum of 32kbps data transmission. Other data transmission applications now
popularly adopted include, the location identification service, corporate database access, tele-
metering, and handset to handset direct data communication (transceiver).

PHS MOU Group

Not wanting to be left behind by their GSM counterparts, the companies representing interest in
the Japanese PHS system established their own MoU Group. Within the group there are 85 odd
signatory member organizations including carriers and manufacturers within and outside Japan.
These members include MPT of Japan and the telecommunications authorities of Singapore and
Australia who joined the group as supervisory agents. Japan's ARIB, Telecommunication
Technology Committee (TTC) and Radio Equipment Inspection and Certification Institute
(MKK) participated as public organization members and 10 other organizations were initially
involved as observers.

The main activities of the PHS MoU include:

  elaboration of PHS technical specifications

  coordination of PHS terminal certification with respect to terminal standards

  promotion of PHS international roaming

  coordination of intellectual properties

  other promotional activities

The marketing push for PHS outside of Japan has resulted in the formation of a number of
industry fora in Australia, Indonesia and most recently the United States. The PHS Forum of the
Americas now includes fourteen companies who meet regularly to coordinate efforts related to
PHS standards definition and promotion of the technology (within South, Central and North
America). It also determines approaches to spectrum allocation and provide support for field
trials and commercial system testing.

Wireless LANS
Introduction
A wireless LAN (WLAN) is a flexible data communication network used as an extension to, or
an alternative for, a wired LAN in a building. WLANs are useful when employees are on the
move, in temporary locations or where cabling may hinder the installation of wired LANs.
WLANs may also be used to connect terminals to printers and other devices. The technology
avoids the use of costly T1 leased lines often employed in inter-building connections (including
WLAN point-of-sale applications such as setting up cash registers in a seasonal display area).
They are easy to install, offer the same transmission rates as wired LANs and adequate security.
However, the market is widely viewed as vendor-driven and many potential users need to be
convinced the products are worthwhile.

According to many industry studies, the majority of WLANs used today are accessed remotely
by cellular phones, pagers, etc. The market is still in its infancy and needs to undergo further
development, including demonstration of WLAN capabilities to potential users and resolution of
spectrum allocation, security and health issues. Complete integration of WLAN with other
networks is also very important.

The following exhibits show WLAN specifications for medium and high-speed networks as
defined by the Ministry of Posts and Telecommunications in Japan.

Exhibit 3 - Medium Speed WLANs (transmission rates in the range of 256kb/s to 2Mb/s)
 Frequency Band: 2.45GHz (ISM band)
Technology: Spread Spectrum
Antenna Power: Less than 10mW

Exhibit 4 - Higher Speed WLAN (transmission rates greater than 10Mb/s)

Frequency Band: 18-20GHz (quasi-millimeter wave)
Technology: Time Division Duplex (TDD) based on 4 FSK or QPSX systems
Antenna power: Less than 300 mW
WLAN technologies are also being developed in other frequencies such as the 5 GHz band.
According to one major computer company, there are many issues affecting the future
deployment of WLANs, including 802.11, a standard formally approved in 1996 for WLAN
networks. It uses frequency hopping and infrared direct sequencing techniques. WLAN
applications are currently prevalent throughout vertical markets, but it is expected that many
horizontal applications will follow as 802.11 network infrastructure is installed. 802.11 is
expected to make WLANs an economically competitive option for any office environment

Initially WLANs could not deliver more than 1 to 2Mb/s in throughput. In 1999, the IEEE
(Institute of Electrical and Electric Engineers) ratified a new standard for high-speed WLANs:
IEEE 802.11b. This standard enabled a gross bit rate of 11Mb/s. Apple was the first to adopt this
standard, releasing its WLAN system, Airport, in 1999.

The improved performance and lower costs of IEEE 802.11b have led to widespread corporate
installations. A large proportion of the installations has been for niche markets to date (i.e.: short-
term leased buildings, warehouses, retail outlets, airports, hospitals etc.), however WLANs are
now on the verge of breaking into the mass-market.

Competition has already driven down the costs of deploying 802.11b networks from thousands to
hundreds of dollars. As a result, 802.11b networks are now being deployed aggressively by
businesses to give their employees mobility within the enterprise. Home users are buying cheap
802.11b gear to extend their DSL or cable broadband Internet access wirelessly to the entire
house. Major consumer ISPs such as EarthLink are even selling inexpensive 802.11b home
gateways.

In addition to homes and enterprises, 802.11b networks are now popping up in public spaces.
Users who already have an 802.11b network at home or the office don't need to buy any new
equipment to connect. 802.11b public networks use unlicensed frequencies and are cheap to set
up and operate, so they will be far less expensive than 3G for the end user. Most importantly,
802.11b public access is available now.

Though it is still early, a number of wireless network companies ("microcarriers") are actively
building 802.11b networks in public spaces such as hotels, airports, conference centers and retail
establishments like Starbucks. They typically strike a deal with a landlord to deploy wireless
access points ("APs" - 802.11b wireless transmitter hubs) in the facility and then pay the landlord
monthly fees and/or a cut of revenue.

An 802.11b AP has a maximum typical range of 500 to 1000 feet. So making 802.11b ubiquitous
in all public spaces will require an enormous number of microcarriers.

Short-Range Spread-Spectrum
Deregulation has directly affected short-range, spread-spectrum devices like bar-code readers,
point-of-sale systems, wireless PBXs and WLANs. In many countries these systems can now
operate with stronger power transmitters without allocation of a frequency license.

Routers or bridges also have to be installed to manage the data flow across a network. WLANS
have a much lower cost with only directional antennae interfacing directly with a wireless
network access point.

Exhibit 5 - About spread-spectrum wireless communications

Both frequency hopping and direct sequencing techniques are based on spread-spectrum
technology. Spread spectrum technology transmits signals across a range of frequencies using
very low energy levels. This means transmissions appear as background 'white noise'. The
signal is coded by the transmitter and decoded by the receiver. This makes the spread-spectrum
transmissions extremely secure.

Frequency Hopping: During the coded transmission, both transmitter and receiver hop from one frequency to
another in synchronization. The rapid movement between frequencies makes it a very secure way of transmitting
data. Frequency hopping is best suited to environments where the level of interference is high and the amount of
data to be transmitted is low.

Direct Sequencing: This method entails the coded transmission being spread out simultaneously over a wide
number of frequencies. The signal is so diffused that it appears as background noise. The receiving station decodes
the signal. Direct sequencing is best suited to high-speed, client/server applications where radio interference is
minimal.
Apple's Airport
The released AirPort based on IEEE 802.11 standard, uses the unlicensed 2.4 GHz ISM band.
This frequency band is also used by industrial equipment such as microwave ovens. Direct
sequencing enables a maximum data rate of 11 Mb/s.

The range is approximately 30 meters in open areas but less in the presence of interfering objects
such as walls and other structures, which attenuate or reflect radio signals. Reflection of radio
signals is a problem when the sum of all reflections adds up to zero or to a very low signal
strength. In other words, the signals arrive from different paths with opposite phases canceling
each other out. Apple uses two antennae on each device to decrease the chance of this occurring.

Multiple systems can operate within the radio-range of each other but at a reduced data rate.
Since most countries do not requires licenses in the ISM band for transmissions below a certain
power level, there are already many technologies using it for communications, including
Bluetooth. Since some of these follow no particular technical standard, they are not geared to
minimize disruption to other services in the same frequency band.

Although AirPort only works with Macintosh computers, it is widely marketed by major
manufacturers to the mass market. Many other manufacturers are also releasing IEEE 802.11
compatible systems. WECA, the Wireless Ethernet Compatibility Alliance, is developing tests
under a "Wi-Fi" logo in order to facilitate interoperability and boost customer confidence.

In-Building Wireless
In-building wireless systems take two forms; those designed for mobility and those designed to
replace wires. The market is made up of wireless PBXs (WPBX), WLANs and wireless data
collection.

A WPBX enables personal mobility with access to both data and voice. Sales growth for the vast
majority of WPBXs is expected to be in stand-alone versions deployed for specialized
applications. WPBXs are useful for employees who are periodically away from their desks or
stationed in different locations within the same general area such as neighboring conference
rooms or site inspections. .

Key findings of a study regarding Wireless Communications Systems (WCS) included:

 As WCS prices decline and performance improves, motivation and purchase

justifications will switch. Initially, customers purchase and use WCS to improve
employee productivity and communication. However, continued improvement in
performance and reductions in price per user, will see WCSs make inroads into markets
traditionally monopolized by wired business telephone systems. In short, WCS purchase
justifications will increasingly be made on cost. Consequently, this will allow wireless
telephones to account for the majority of all business telephones (PBX, Key Telephone
and Centrex) in the not too distant future. In fact, already some finely tuned WLAN
technologies have become a low-cost alternative serving remote locations. The county of
Los Alamos, N.M., opted for wireless LAN technology as both the quickest and cheapest
means of linking its seven fire stations, police headquarters and utility departments. It
paid off in May 2000 when fires raged and efficient communications were essential.
 Concerns about noise and interference emerged as a major factor when purchasing and
using a WCS.
 Cellular/Cordless telephone performance and capability would not be acceptable
benchmarks for business users. Businesses indicated they require performance and
capabilities equal to those of a wired desk telephone.
 The WCS market will grow according to three price premium plateaus. Initial high-priced
premium plateaus will only attract a small segment of the market consisting of those
businesses with a strong demand for WCS. This will be followed by a moderate price
premium plateau, which will capture the majority of the market. Finally, the remainder of
the market will be attracted to WCS only when it reaches parity with the cost of a wired
telephone.
 The need for WCS varies significantly with the type of employee and department within
an organization. Needs also vary depending on the size and type of business.
  WCS needs cannot be satisfied by any one type of wireless phone or system. A Multi-
Cell/Multi-User (MC/MU) system will be required for large business facilities (50 or
more employees) and a Single-cell/Multi-user (SC/MU) system will be required for small
facilities (5 to 50 employees). Various types (differing in size, weight and function) of
desktop and portable wireless phones will also be required.

Wireless Local Loop

Wireless Local Loop (WLL) is a system that connects subscribers to the public switched
telephone network (PSTN) using radio signals. The radio signals substitute copper wires for all
or part of the connection between subscribers and the switch. This includes cordless access,
proprietary fixed radio access and fixed cellular systems.

According to the market research firm MTA-EMCI, the worldwide WLL market will reach more
than 202 million subscribers by the end of 2005. This firm has estimated anywhere between 172
million to 307 million consumers will demand WLL service worldwide in the near future, yet
actual service provided is currently around 50-60 million subscribers.

WLL has a much lower incremental investment cost than copper wires and it is much cheaper to
deploy for areas with low subscriber density. WLL equipment can connect to a normal telephone
or a standard wall jack. The subscriber line terminates at a permanently installed radio
transceiver fitted with a small rod antenna. Speech quality is better than in corresponding
analogue mobile installations. Cordless access has already made it possible to quickly connect
customers including corporate customers to the public network. The system built on the concept
of Radio in the Local Loop (RLL) permits rapid and flexible expansion of subscriber capacity,
limited only by the availability of transmission frequencies.

Several technologies can be used for wireless local loop installations. They include:

  DECT

  PHS

  CDMA

DECT is successfully used as WLL technology in several Asian countries such as India, China,
and Indonesia. PHS WLL systems are being used in SE Asia and in a number of South American
countries.

Much of the WLL growth is currently in the developing economies, which make up half of the
world's population and mostly lack plain old telephone services (POTS). Developing nations like
China, India, Brazil, Russia and Indonesia look to WLL technology as an efficient way to deploy
POTS for millions of subscribers without incurring massive infrastructure costs.

In developed economies, WLL will help to unlock competition in the local loop. This will enable
new telecom carriers to bypass existing wireline networks to deliver POTS and data access to the
mass market. In fact, some WLL competitors' rates are already cheaper than fixed call operators
in countries such as Denmark, Finland, Germany and the USA.

Exhibit 6 - Radio in the Local Loop: An Economic Force

There is a close correlation between a nation's gross domestic product (GDP) and the
penetration of telephone lines. An investment in telecommunication infrastructure often adds
triple the value to GDP. GDP growth in parts of south-east Asia are often 10% or even higher.
In Europe 2-3% can be anticipated. A relationship between each area's roll out of POTS and
their GDP growth can be inferred. Thus objective national policies should lead to a rapid
deployment of POTS infrastructure.

In rural or remote areas the lack of telecommunication services often leads to economic recession and urbanization.
However, with a fast rollout of telephone lines, small companies can evolve in a healthy way without having to
move into urban areas.

Table 2 - Wireless Local Loop subscribers per region - Sept 2000

Region Share of total world market
West Europe 5%
East Europe 9%
Africa 6%
Middle East 1%
North America 1%
Latin America 21%
Asia/Pacific 57%
Bluetooth
Bluetooth is a short-range radio technology developed by the Bluetooth Special Interest Group
(SIG). Bluetooth is designed to allow the exchange of voice and data between devices such as
mobile phones and portable PCs without proprietary cables. It is expected to make these digital
devices much user-friendlier. To promote its rapid adoption, the Bluetooth SIG has offered the
technology on a royalty free basis and surrendered intellectual property rights to those companies
that have joined the initiative.

Each Bluetooth-enabled device can communicate with a number of other devices, creating a
'piconet'. All devices within a piconet share a common connection known as the master. Unlike
infrared, Bluetooth is not limited to the 'line-of-sight' requirement since it can transmit through
solid objects. The radio operates in a globally available frequency band, 2.45GHz (ISM band)
thereby ensuring worldwide operation. It is capable of transmitting data at a gross rate of 1Mb/s.
The standard range within a room is 10 meters, although there is an option to extend it to 100
meters within a house. Such systems are referred to as 'Wireless Personal Area Networks' or
WPANs.

As Bluetooth is targeted for use with mobile phones and portable computers, power consumption
affecting battery life is a major concern. Bearing this in mind, Bluetooth technology self-adjusts
the power to a suitable level that a data transmission requires. The transmitter switches to low
power or stops altogether as soon as traffic volume decreases to a low level.

Full-strength 128-bit cryptography is used for authentication. This cryptography can be used to
encrypt packets between 8 to 128-bits. In this respect, Bluetooth is much more secure than the
inadequate 40-bit encryption used by IEEE 802.11.

There are many applications for Bluetooth including:

 A mobile phone which connects with a laptop computer or a POTS-connected base-

station at home. When calls are made from a mobile handset within one's own home, the
call is placed through the standard wireline telephone service, rather than using the
mobile cellular system, thus reducing power consumption and call costs
 Linking a microphone/earpiece to a mobile phone without cables. The same headset
could work with a POTS-connected (Plain Old Telephone Service) base-station at home
or in the office
 Exchanging data between laptop computers, mobile phones etc. at a meeting
 Automatic and instantaneous synchronization of files between two or more laptop and
desktop computers

As of March 2002, the Bluetooth SIG (Special Interest Group) included 'Promoter Companies'
3Com, Ericsson, IBM, Intel, Lucent, Microsoft, Motorola, Nokia, Toshiba and more than 2000
other 'Adopter/Associate' member companies.

Innovation, research and development need to lead to a reduction in the costs of Bluetooth
solutions, enabling integration into many more products. Some ways to cut cost will include one-
chip solutions combining radio and base-band functions, less expensive packaging and solutions
that transfer some of the work to a host processor.

A limited quantity of Bluetooth enabled mobile phones and notebook computers were released at
the end of 2000 to test the market. Bluetooth enabled desktop PCs are expected to debut soon. It
is believed Bluetooth will not really begin to make a mark until at least the end of 2003.
However, a high-tech market research firm, has predicted there will be more than 1.4 billion
Bluetooth enabled devices by 2005. Another group is equally positive about the prospects for
Bluetooth, predicting WLAN and Bluetooth-embedded systems will together stimulate revenues
of US$53.12 billion in 2006. Furthermore, another group is even more bullish predicting 2
billion Bluetooth products will be produced in 2005 alone.

Table 3 - Bluetooth devices forecasts - 2000-2005

  2000 2001 2002 2003 2004 2005
Telecommunications 8,100 21,000 83,700 152,000 287,000 453,800
Computing 2,400 7,300 23,200 43,600 80,700 123,200
Digital still cameras 66 390 1,100 2,500 4,000 5,970
Output equipment 0 620 1,400 2,300 4,400 7,400
Accessories 670 3,600 12,900 22,100 34,800 58,700
Automotive 0 0 600 1,200 1,900 2,600
Industrial/medical and vertical markets 0 1,060 2,660 6,940 12,100 14,400
Home networking 190 530 1,206 2,400 4,000 5,800
Total 11,500 34,500 126,700 233,300 428,800 671,800
Growth rate (per cent)   200.8 267.5 84.1 83.8 56.7
Offset for chips: (ship 15% in prior yr) 14.9 48.3 142.7 262.7 465.3 712.2