Telcos Touchy on Net Push

Three years and billions of dollars into the wireless industry's broadband expansion, the big telcos have yet to deliver on their bold promises.

Remember the hype? How the new so-called third-generation, or 3G, wireless network would get you TV on your cell phone? How it would let you play collaborative video games with pals around the world and take in live music broadcasts? New mobile applications were going to open the spillways for countless new revenue streams.

But today's 3G reality has a decidedly less space-age feel. You can get short video clips, sports and news alerts, music and ringtone downloads. Fun? Without a doubt. Life altering? In most cases, no -- neither for consumers nor for the big wireless carriers.

To be sure, the spread of wireless services has been one of the strongest growth stories in recent tech history, propping up otherwise staid telcos like AT&T (T Quote) and Verizon (VZ Quote). But as the first wave of subscriber growth slows, telcos will need to have more compelling services to keep that momentum going. That's how so much hope got hung on 3G.

And yet, not even one cell phone in 10 sold in the world this year will be a 3G unit, says Charter Equity Research analyst Ed Snyder.

"That's pathetic," he says. "Here it is, 2006, and we can barely reach 10%."