CLIFT'S EDGE

Bill Clift can try to put on ignorance, but it's an ill-fitting suit. “My access to information about AT&T Wireless is probably less than yours,” said Clift, chief technical officer at Cingular Wireless, which announced a $41 billion acquisition of AT&T Wireless last month.

He's under attorneys' orders — the plural of “attorney” is assumed where mega-mergers are involved — not to talk about the network implications of the acquisition, which must submit to an industrial-size proctology exam from the Department of Justice, and requires FCC approval, before it can be consummated. All that could take until the end of the year if you believe Cingular's predictions.

Yet, somewhere beyond Clift's welcoming cherub face and readily apparent Southern hospitality, his brain must be doing the Bossanova right now.

Even though he can't say, he must be excited about the prospect of inheriting a network that has even more base stations than Cingular's, and gives the company all the spectrum it could want. Even if he can't utter a word, the fact that AT&T Wireless' national network is already completely EDGE-enabled has to be inducing leaps of his imagination. Even while he invokes the Fifth Amendment, he must be jotting down mental notes on how he'll move surplus base stations in the two carriers' overlapping markets into Cingular's current network gaps.

Still, for the rest of this year, being Bill Clift will be like a being kid who's been told what new toys he'll find under the tree next Christmas, but can't play with any of them until then.

“The Department of Justice would frown on any collaborative pre-planning between us,” Clift said. “Our attorneys are very sensitive to having a smooth transition for this acquisition.”

Clift already knows Cingular is facing a network integration project of massive scale, unlike anything any other mobile carrier has ever faced. AT&T Wireless has 25,300 base stations nationwide, while Cingular has 21,800. Combined the two carriers cover 97 of the top 100 markets. There will be a coverage overlap in many markets, and Cingular will have to figure out how to best arrange the surplus equipment for maximum coverage.

Redeploying existing network equipment elsewhere could save Cingular as much as $1 billion, according to John Yunker, senior analyst at Pyramid Research. But the sheer complexity of the integration task could temper the joy that results from that savings.

“Integrating base stations, switches, billing platforms and other network planning software from a variety of different vendors could be a silver lining for vendors that may be otherwise impacted negatively,” Yunker said.

“They've got to get going on it,” added Bob Egan, principal analyst at Mobile Competency. “They should put more roaming interconnections in place with AT&T's network to give those Cingular customers better coverage now.”

Until the Cingular/AT&T deal receives regulatory approval and officially closes, Clift can do little about confronting the other elements of the integration challenge, such as unifying billing operations and call centers. He can say even less.

The irony of the gag order is not lost on him. The wireless industry always has been the segment of telecom with the most affinity for open-door policies. Major carriers routinely share information about performance of new technologies and vendor experiences.

“At this time last year, we could have talked about our networks all we wanted, something we often do,” Clift said. As it is, he'll have to wait until Christmas — or longer — before he does so again.

Still, while that integration challenge looms, Cingular isn't standing still regarding its own technology evolution. You might not have heard about it because Cingular isn't given to proclamations of national mobile data rollouts, the kind that AT&T Wireless and Verizon Wireless have made in the last six months. But if you were paying close attention during 2003, you would have noticed that Cingular actually was the first carrier to migrate one of its markets — Indianapolis — to EDGE technology, the higher-data-rate successor to GPRS.

Though the company hasn't followed up on that announcement with word of a broader EDGE launch, that doesn't mean it hasn't been happening.

“We've been quietly busy about going ahead and rolling out EDGE in other markets, such as Atlanta [home to this week's Wireless 2004 trade show] and Detroit,” Clift said. “It was more of a marketing decision having to do with not wanting to promote the technology until the reach of it was much broader. We're now on track to have EDGE in all of our markets by the end of the second quarter.”

That effort confounds some industry watchers. Some analysts have speculated Cingular might freeze its EDGE deployment until the AT&T Wireless deal closes because the latter carrier already has deployed EDGE nationwide, but Clift clearly doesn't see that as an option.

There is, of course, the possibility, unspoken by Clift, that the acquisition might not be completed. In that event, it wouldn't be a good idea to postpone EDGE deployment.

“They have EDGE complete or nearly complete,” Egan said. “They can see EDGE benefits now.”

Clift acknowledged Cingular wasn't as pervasive in its GSM/GPRS deployment as some other carriers were in recent years, and now, in its legacy networks it's handling the big job of installing GSM, GPRS and EDGE all at the same time.

It's a forklift upgrade that AT&T Wireless didn't have to endure, having migrated its TDMA facilities to GSM/GPRS during a two-year project that culminated in 2002, before taking on EDGE in 2003. By contrast, Cingular began its move from TDMA to GSM about one year after AT&T Wireless did, and as of the end of 2003, Cingular still had 7% of its 83-market network waiting for GSM. (Ironically, a previous Cingular/AT&T Wireless joint venture in 2002 helped both companies accelerate expansion of GSM to busy interstate highways in several states.)

Ultimately, making as much of its network EDGE-enabled as soon as possible is a necessity, Clift said.

“EDGE has positives because you can do a great deal more services than you were able to do with GPRS,” he said. “We have a benefit over some European carriers in that respect because a lot of them will go from GPRS to UMTS, and there are still some issues with UMTS, such as the devices not really being available in competitive quantities.”

That hasn't been a problem with moving to EDGE, he said. Nokia and Siemens have supplied EDGE-compliant handsets, while Ericsson and Nortel have provided infrastructure software upgrades.

“Not having a PC card available that we liked was a factor in our ability to roll out GPRS. We didn't have that kind of problem with EDGE.”

Cingular appears to be moving quickly to EDGE, and its EDGE coverage will only improve if the AT&T Wireless deal goes through, a deal which also will make it the nation's largest wireless service provider. However, it's also setting itself up for a comparison to the data bandwidth capabilities of its next largest competitor, Verizon Wireless, which is just beginning its national rollout of CDMA 1X EV-DO. If the battle is between Cingular's EDGE and Verizon's EV-DO, Cingular will be losing right from the start, which means the pressure could be on for Cingular to upgrade to WCDMA/UMTS.

Cingular hasn't announced WCDMA deployment plans yet, but is planning to conduct trials in two cities.

Though Clift may not get to inspect many other details about AT&T Wireless' network, he knows he will get a good look at WCDMA later this year when AT&T Wireless launches WCDMA in four markets, a commitment the carrier made to minority investor NTT DoCoMo.

“My guess is that Cingular will deploy WCDMA sooner than planned,” said Alan Nogee, senior analyst at InStat-MDR, not long after the AT&T acquisition was announced.

However, Egan said closing the deal, and following that with the massive network integration project will put too much on Cingular's plate for it to worry about WCDMA.

“There's a lot of uncertainty now in Europe with UMTS [also known as WCDMA],” Egan said. “My guess is that technology will be pushed out later.”

The AT&T Wireless acquisition will help ease that implementation, whenever it does happen, because it brings Cingular all the spectrum it needs for WCDMA.

“You could say that we will be making spectral progress with the acquisition,” Clift said. “We'll be able to do a ubiquitous WCDMA deployment pretty easily if we want to because we'll be able to deploy it in 10 MHz slices, five channels of 2 MHz each.”

Egan said that's a luxury Cingular didn't have in its previous network evolutions. “Cingular had a major transition out of TDMA and into GSM that was challenging because some markets were so spectrum-constrained,” Egan said. “They had to do some innovative things, like carve out TDMA spectrum in use, and put it toward the EDGE deployment, which is robbing Peter to pay Paul.”

Also, Martin Dunsby, principal analyst of inCode Telecom, said EDGE usage requires much spectrum. “For every EDGE user, you might be kicking five voice users off the spectrum, which is fine if you have a lot of spectrum.”

While it's not yet clear when exactly Cingular will move to WCDMA, the data battle won't be fought only on the basis of bandwidth, and Clift knows that.

“We're still in the learning curve with data networks, but one of the early lessons is that it's not sufficient just to look at platform performance. You have to see how customer expectations are met,” Clift said. “You have to set thresholds around the data transaction, to know when a picture has taken too long to transmit, or a song too long to download.”

Clift does have other things on his mind besides data, other technology strategies that will continue to move forward regardless of what happens with the AT&T Wireless deal. Another area in which Cingular will be compared to Verizon Wireless, and in which Cingular currently doesn't have a weapon, is push-to-talk.

Clift said Cingular is planning P2T roll out this summer. It has been looking at the solution provided by Kodiak Networks, which uses voice network channels and for that reason is believed to offer more consistent quality than some other P2T solutions that trying to ride on immature data facilities.

Still, Clift said he'd be “less than honest” if he claimed that Cingular P2T service would perform on par with that of market pioneer Nextel Communications.

Regarding other technology strategies, Cingular is forging ahead with device innovations, such as over-the-air device management. The carrier recently said it would use OpenWave for some device management functions. Clift said Cingular also sees benefit in software that can provide remote firmware updates to mobile phones experiencing glitches.

“Device innovation is really a journey,” Clift said. “The devices continue to improve, and we have to continue to evolve with them.”

It only seemed like the world stopped on its axis when the Cingular/AT&T deal was announced. The real challenge to Cingular was to not let the feeling sink in. Clift's job is to keep the company marching to the beat of innovation, even while it awaits the acquisition that could vastly reorder its network. That means completing the EDGE upgrade so Cingular's customers can have the bandwidth and services now, rather than at the behest of attorneys and regulators in whose hands the acquisition currently lies. It means he has to keep planning and pushing for push-to-talk and over-the-air device management as if the deal were never announced at all.

Still, during the idle moments in between he must be thinking about the things that everyone else is talking about, but that he can't talk about. He's probably thinking about those things right now, the things he will do once he gets his hands on that network.