The Peculiar Evolution of 3G Wireless Networks: Institutional Logic, Politics, and Property Rights

Peter F. Cowhey, Jonathan D. Aronson, and John E. Richards

8/26/2015

In 2002 wireless phone connections surpassed the n umber of wired connections globally and became the primary communications infrastructure for all but the largest firms in many developing countries. New, third gene ration (3G) wireless networks promise to provide mobile voice and multimedia data to users worldwide. 3G is more advanced than first generation (1G), analog mobile services that provide only voice services and second generation digital services (2G ) that handle voice and some text data. The technological advances available using 3G wireless networks could put wireless mobile networks on a par with wired networks for delivering data for households and for small and medium enterprises. To achieve this goal firms invested hundreds of billions of dollars in anticipation of annual revenues in the tens of billions. If 3G succeeds, it will be an important part of tomorrow’s global communications infrastructure. However, major problems emerged by 1999. What went wrong? This paper uses contemporary models of political economy to explain the troubled evolution of 3G.