G3: The Next Innovation

No matter how bad the market or economy looks there is always some new invention or technology in development that will put a smile on the faces of inventors and whip investors into a frenzy.  So, what is the next innovation or enhancement that will become commonplace?  It’s third generation wireless communications.  Cell phones and wireless voice communications for the masses have already been with us for a decade.  This first generation analog cellular phone technology has been enhanced and led to new digital and web-enabled technology.  Where previous generations of wireless technology focused on voice communications, the technology and standards surrounding third generation wireless communications focuses on the high-speed transmission of data.  Don’t worry about what will happen to your voice phone calls, they are just seen as another type of data.  The power of third generation technology is its shear speed.  Most of us are too familiar with the sluggishness of a dial-up Internet connection transferring data at 56,000 bytes per second, and when we had our first taste of data coming through a cable or DSL connection we probable looked like a young child with saucer-sized eyes on Christmas morning.  But the promise of G3 is to provide WIRELESS data to us wherever we are at a speed of 2,000,000 bytes per second (2 megabytes), which is 2 to 10 times faster than a hardwired cable or DSL connection.  WOW!!  The bandwidth capabilities are there for you to be able to receive wireless streaming video images on your handheld device AND you’d be able to browse the web, check your email, and answer a phone call, all at the same time.  Needless to say some companies in this sector are getting pretty excited about the potential of this new technology.  If you thought technology and Internet stocks reflected out-of-this-world valuations in the first quarter of 2001, then watch out for valuations revolving around third generation wireless companies and the licenses to provide these services.  In March and April of 2001, G3 licenses were auctioned off in the United Kingdom and produced shocking results.  The winning bids for the five, 20-year licenses totaled $35 billion, 8 times higher than the UK government expected.  Based on the UK auction, some experts have calculated that in the United States, similar FCC licenses for G3 broadcast rights could fetch between $140 billion on the low side, with some estimating the rights could sell for more than $600 billion!  The frenzy will certainly be interesting to watch, and well-placed investments could produce an equally over inflated reward.