Competition hots up between 3G and Wi-Fi

The battle between 3G and Wi-Fi for dominance of the wireless internet world will all come down to which offers the broadest benefits to individual users, analysts have predicted.

The two technologies offer a variety of different benefits and experts predict they will continue to co-exist, but competition between 3G and Wi-Fi does appear to be hotting up.

Vodafone has announced it will cut its 3G mobile broadband tariffs by almost half from 2 July, with the monthly tariff falling from £45 to £25 and 24-hour access available for £8.50.

A Vodafone spokeswoman said the changes weren't really a reaction to anything — being more down to customer needs than competing with Wi-Fi — but it certainly makes 3G a more viable proposition than it has been previously.

Ian Fogg, analyst with JupiterResearch, suggests 3G is becoming more competitive with Wi-Fi. He said that although Wi-Fi has historically been faster than 3G, the advent of HSDPA (also known as 3.5G) means this is not so much the case any more.

Fogg said: "Vodafone is hoping that for business travellers the much greater coverage of 3G will prove attractive. By comparison the Wi-Fi network is very small."

He added that 3G is more flexible and doesn't come with the hassle of Wi-Fi — such as finding a hotspot or logging on — allowing people to get more done.

He added that 3G is benefiting from a "tremendous industry push" with "a lot of market traction behind it".

However, Fogg acknowledged that Wi-Fi provides more effective coverage in buildings and offers greater bandwidth and so still has a role to play.

When asked about the role WiMax might play in the near future, Fogg said: "WiMax is a technology searching for a market. Mobile data is going to be very challenging for WiMax in Europe."

Dean Bubley, founder of analyst house Disruptive Analysis, said: "There's not going to any one clear winner on this."

He added: "From Vodafone's point of view, [tariff reduction] makes a huge amount of sense. That sounds a lot more reasonable."

But he also suggested this doesn't mean 3G will suddenly overtake Wi-Fi. He said: "3G is patchy and will stay patchy."

Bubley also raised the issue of possible restrictions with 3G, such as the total amount of data that can be transferred or whether it can offer VPN and VoIP, as Wi-Fi does.

He added: "The main difference about Wi-Fi is that you can own it."

As for the likely winner, Bubley said: "It'll come down to the individual users."