The next major 3G upgrade will allow operators to offer "good enough" data transfer speeds at much lower costs, finds the latest edition of Unstrung Insider.

High Speed Downlink Packet Access (HSDPA), the upcoming high-speed upgrade to 3G UMTS networks, is set to provide a big-time boost to mobile operators’ capability to deliver wireless data services.

Despite the potential to deliver per-user download speeds in the megabits per second range, the driving force behind HSDPA is not to deliver the highest possible peak data rates, but rather to maximize the number of users able to receive data services at acceptable transfer speeds.

Such a strategy is likely to prove far more economically powerful than focusing on a few high-paying, high-end customers, argues the most recent Unstrung Insider report Turbo 3G: High-Speed Packet Access Arrives.

User density is at the heart of the issue. That is, how many users can be connected to a cell and actively transmitting at the same time? As the chart below shows, HSDPA offers dramatic improvements in user density over 3rd Generation Partnership Project (3GPP) R99 networks (today’s generation), assuming similar data rates:

Table 1: R99 & HSDPA Simultaneous Users per Cell

The left of the chart shows that just five users can transmit simultaneously on an R99 5 MHz RF carrier at the effective peak rate of 384 kbit/s. Whereas with HSDPA, the number of simultaneous users is boosted five or six fold to around 30.

HSDPA is more suited to "bursty" application. As such, the exact data rates and number of supported users are variable and subject to network dimensioning, the application in question, user mobility/location, and so on. With an average capital cost somewhere in the region of $100,000 per cell site (including civil works, etc.), maximizing the number of paying customers is key to maximizing the return on a 3G network investment.

What HSDPA will likely deliver in practice, therefore, are services operating at a few hundred kilobits per second, but at a much lower cost per bit than today's 3G, and by implication, will support many, many more users, finds the Insider report.

Even with this improvement in 3G economics, it is likely that HSDPA will be used primarily to improve the efficiency of today’s services, such as Web browsing, or downloading media clips to mobile handsets. It’s not yet certain whether or not HSDPA is really the technology to bring affordable “wireless DSL” to the laptop-toting masses.

— The Staff, Unstrung