Wireless Broadband Race Tightens

Unlike 3G, Wi-Fi is a universal standard, meaning one adapter fits all networks. Wi-Fi is also integrated into most new laptops, which is the fastest-growing segment of the PC industry.

Though far from ubiquitous, Wi-Fi is spreading rapidly. Phil Solis, an analyst with ABI Research, predicts the number of hot spots in the U.S. will more than double this year to 55,400.

Wi-Fi has a lot to offer and it will be 3G's biggest threat, says Ed Snyder of Charter Equity Research. T-Mobile's expansion "will further undercut the limited appeal of expensive 3G service," says Snyder.

But analysts say each approach has an appeal to fast, connection-hungry users. Wi-Fi fits with slightly mobile laptop users, while 3G is for very mobile cell phone and laptop owner.

Solis says 3G will take a while to catch on. He predicts that "among business professionals there's probably going to be a lot of demand, but it is priced too high right now for consumers."

But Solis says combining both technologies is the ultimate direction the industry is headed.

"Fast wireless is the natural progression of where things are going," says Solis, who adds the company that bundles both services will probably have the most success.

If there is room for both Wi-Fi and 3G, it won't be under Verizon's roof. In April, to support the launch of its EV-DO offering, Verizon shut down its Wi-Fi hot-spot service in New York.

Clearly, the wireless data race is under way and some bold lines have already been drawn.