Basically, the reason why 3G makes less interference is the same as the reason why it takes more power: 3G is a continuous transmission, but 2G is a pulsed transmission. Continuous transmission takes more power, while pulses cause more interference.

3G (also known as UMTS) uses Code-Division Multiple Access (CDMA) wereas 2G GSM uses Time-Division Multiple Access (TDMA).

TDMA works like this: There are 8 phones in a cell. They are not allowed to all transmit at the same time. They must take it in turns. Your phone's turn comes about 217 times every second. Therefore, your phone transmits a "burst" of energy 217 times a second. That means the circuits in your phone switch on and off 217 times a second, which causes interference at a pitch of 217 Hz.

CDMA works like this: All the phones in the cell transmit at the same time. So how does the base station know which one is which? Because each phone has a different "code". In TDMA, when it is your turn to transmit, you send your data as simple binary code (so if you want to send 10010010, you send 1-0-0-1-0-0-1-0). But in CDMA, you have a special code for "1" and a different special code for "0". So for example if your code for "1" is 10100111 and your code for "0" is 10010110 (that's not a real CDMA code by the way, it's just one I made up for this simple explanation), and you want to send 10010010, you have to send this huge amount of data: 10100111-10010110-10010110-10100111-10010110-10010110-10100111-10010110 Your special code lets the base station identify you without you needing to take turns, which means more people can use the network.

So you can see that:

(1) With CDMA, you don't have to wait your turn (so there is no "burst 217 times a second", so no interference at 217 Hz)

(2) With CDMA, you transmit much more to get your data up, which is why it needs more power and the battery life is less.

Some phones have a function that says "Use GSM only", which you can switch on if you need more battery life. But the company Three usually turns off that function, because their network doesn't have GSM transmitters, at least not in the UK (they sometimes rent GSM transmitters from other networks, but that costs them money and they're trying to reduce it).

So that's why GSM-only is good for battery life, but bad for interference. It is possible to design a GSM phone with extra capacitors to reduce
the interference it causes, but unfortunately not many GSM phones seem to have this.

This is not the same problem as why some GSM signals are better inside large buildings than 3G signals are; that's to do with the frequency of the signal. If the new lower-frequency 900MHz 3G signals are brought out, 3G on that frequency will work inside buildings just as well as GSM on that frequency. But the "power consumption versus interference" tradeoff will remain.

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