NTT DoCoMo in Japan, one the world’s leading mobile providers, recently announced a prototype wireless network that could send data packets at 2.5 gigabits per second – fast enough to download a DVD movie in between 7.5 and 10 seconds – to a mobile device traveling at 20 kilometers per hour.

If their prototype wireless technology can produce even a fraction of that 2.5-gigabit transfer rate in real-world applications, it would vastly enhance mobile functions – allowing video telephony, robust Internet connectivity, and streaming media services, while at the same time extending the range of traditional voice calls.

These high-speed data networks, along with increasingly powerful mobile handsets, have the potential to supplant the use of desktop computers – a trend that’s already occurring in some Asian countries. This potential market has DoCoMo, along with almost every other major wireless player, including Motorola, Samsung, and Qualcomm, scrambling to develop their own technology for the next generation of wireless networks, often labeled “4G.”

DoCoMo’s demonstration gives a glimpse into the two types of technology that will most likely be adopted to increase bandwidth and range: MIMO, which is applied to network base stations and mobile devices, and QAM, which loads more data onto radio waves.

MIMO (multiple input, multiple output) uses multiple antennas to send and receive data, as well as specific coding that scrambles and unscrambles the signals produced by those antennas (see “Faster, Farther Wi-Fi”). A base station that uses MIMO technology has multiple antennas that simultaneously receive and send data to and from wireless devices. Unlike base stations with a single antenna, those with MIMO use the multiple antennas to create a number of intertwining channels through which data moves. The jumbled signals are untangled by a “signal processing” that sorts through the bits.

Because MIMO base stations can handle many more data streams than single antenna wireless stations, there’s more bandwidth and built-in redundancy, which increases network reliability and range, says Rob Gilmore, senior vice president of engineering at NextWave Wireless. By deploying MIMO routers, a mobile network such as DoCoMo’s 4G can increase the amount of data sent and received, as well as increasing the range, he says.

Most MIMO routers have two or three antennas. In DoCoMo’s demonstration, the router as well as the receiver used six antennas to produce rates of 2.5 gigabits per second, says Satoru Kawamura, a company representative. Tripling the number of antennas on a MIMO access point and receiver can triple the amount of bandwidth of the network, says Gilmore.

DoCoMo also tweaked a commonly used form of signal modulation called QAM (quadrature amplitude modulation), which increases the number of bits that a single radio wave contains. Data is encoded on radio waves by altering characteristics of the waves themselves: the amplitude of wave peaks, and the phase, or relative position of the peaks compared with waves of the same frequency. DoCoMo used an advanced form of QAM that adjusted the amplitude and phase of each wave to 64 different levels. Traditionally, says Gilmore, the phase and amplitude of the radio wave is adjusted only to four levels. Increasing these levels, as DoCoMo has done, is partially responsible for its fast download rate.

There remain technical challenges to pumping up the capabilities of MIMO and QAM in a real-world setting. It could be difficult to design a consumer-friendly MIMO handset, says Bill Krenik, wireless advanced architectures manager at Texas Instruments. One of the main reasons is that sorting through data that come from different paths can be processor intensive, which can quickly drain a battery – not good news for mobile device users.

Also, Gilmore notes, QAM becomes less effective as engineers try to cram more information onto a single radio wave. He says the signal “starts to become more fragile,” which could mean that in a real-world situation transmissions could be lost.

Aside from the technical challenges of 4G networks, other business and political issues may also keep it shelved for at least a few more years. For one, no 4G standards are currently in force. Moreover, corporations could be unwilling to shell out cash on new, upgraded networks when the old ones still haven’t paid for themselves. In the United States, especially, 3G networks have been slow to catch on, mainly because providers wanted to be sure there was a market for the extra features 3G could provide, such as Internet access.

Yet, the growing demand for smart phones proves that, if you build better networks, consumers will use them. Krenik believes that when the transition to 4G occurs – some analysts estimate it will be after 2013 in the United States – the mobile device will become an even more important part of daily life, providing a combination of services, from e-mail and gaming to voice and video.

“Voice was the killer app for the first and second generations of phones,” says Krenick. “For a while we thought the Internet would be it for the third generation; now I think we’re maturing as an industry and realizing that there really isn’t [another] killer app – with high-speed data, it’s a killer experience.”