EDGE ON THE HORIZON

Squeezed between the flurry of bad news surrounding wide-band CDMA delays in Europe and the hype over CDMA 1X's worldwide success is another technology many North American wireless operators don't want the industry to forget.

After years of debate and declarations from analysts that EDGE was dead, some heavy-hitting GSM vendors and a handful of North American wireless operators are breathing new life into the technology. More service providers than just AT&T Wireless are publicly committing to the technology, and Nokia introduced the world's first EDGE-capable handset last month.

Most North American GSM carriers have no choice but to declare their loyalty to EDGE, or enhanced data rates for GSM, which is a standardized 3G technology. Because of carriers' limited spectrum positions in the U.S., they will have a hard time clearing the extra 5 MHz of airwaves needed to deploy W-CDMA, the third-generation migration path for the majority of GSM operators worldwide. For operators in North America that have recently deployed GSM/GPRS over their TDMA networks, EDGE does not require an invasive overhaul of the network.

Nevertheless, AT&T Wireless is expected to become the world's first operator to commercially deploy EDGE before the end of the year. In addition, T-Mobile and Canada's Rogers AT&T have voiced their commitments to EDGE, though they have yet to provide details on a deployment timetable.

Meanwhile, Cingular Wireless will begin deployments in early 2003. In fact, Cingular Wireless is looking forward to the freedom EDGE provides and will introduce PC cards to data-hogging laptop users, said Ed Reynolds, president of network operations with Cingular.

“The incremental investment for North American operators is almost zero,” said Juha Lappalainen, Nokia's vice president for network sales in North America.

In addition to delivering higher data speeds — about 60 to 80 kb/s — EDGE theoretically gives GSM/GPRS carriers more flexibility in the network. GPRS is inherently inefficient because it adds data on top of a GSM network, requiring an operator to trade valuable voice capacity for data, and achieves only nominal speeds of 20 kb/s. In contrast, EDGE is designed to allow operators to use the network's time slots for both voice and data, and EDGE operators don't have to worry about data users clogging up the network.

“For low-bandwidth applications, EDGE is more efficient, and for high-bandwidth, we will be very well prepared to serve a high number of subscribers,” said Rod Nelson, chief technology officer with AT&T Wireless. “Most mMode users are not bandwidth-intensive users, but corporate remote access from laptops is, and we want to be prepared for all of it.”

EDGE COMMITMENTS AT&T Wireless Commercial deployment beginning in 2002 Cingular Wireless Commercial deployment beginning in early 2003 T-Mobile USA Announced a commitment to EDGE Rogers AT&T Canada Announced a commitment to EDGE StarHub in Singapore Testing EDGE Source: company information

While North American operators sing the praises of EDGE, the technology has become a tougher sell internationally. Global adoption is key to convincing a flood of handset manufacturers that have recently transitioned to EDGE. While EDGE will benefit from being a part of the GSM global community in terms of economies of scale, global adoption of EDGE will help leverage costs further and keep vendors' customers in the GSM family. Therefore, EDGE's supporters are working to garner support around the world.

European and most Asian operators so far are noticeably reluctant to support EDGE technology because of their solid focus on deploying W-CDMA. Indeed, this lack of commitment has prompted companies such as Motorola and Sierra Wireless to delay their plans for EDGE until they see customer demand. Lucent Technologies abandoned its GSM/EDGE business last year.

“Our base station is EDGE-capable, but that's a very easy migration for GSM customers,” a Motorola spokesman said. “We haven't seen anyone ask for it.”

It's clear that a lot of people are talking about EDGE, but whether these discussions result in actual deployments remains to be seen.

“The big question is Europe,” said Alan Pritchard, Nortel Network's vice president of global marketing for GSM/GPRS and EDGE. “We have seen certain markets beginning to express interest in extending GSM investments. EDGE has an appeal.”

For its part, Ericsson, is continuing to approach the European market with EDGE the way it always has. Once European operators have solidly deployed their W-CDMA networks, Ericsson will begin to push EDGE as a complement to W-CDMA, which will likely only be deployed in urban areas, said Lars Nilsson, director of business strategy with Ericsson.

Meanwhile, the EDGE community will score a coup if it convinces a number of South American operators to deploy the technology. EDGE supporters are battling the strong lobbying forces of CDMA backers in that part of the world.

The majority of Latin American operators run TDMA networks, and they are all looking to future-proof their networks by either overlaying GSM or CDMA technology. GSM/EDGE supporters are touting their technology's innovation and economies of scale; CDMA backers argue that CDMA's spectral advantage brings increased voice capacity along with high-speed data.

One factor that has hampered EDGE's appeal is handset availability. Not many knew when the first commercial EDGE handset would be ready until Nokia introduced an EDGE-capable handset last month. The vendor will deliver commercial phones early next year.

“Brazilian operators were told that EDGE could not be done,” said John Barry, general manager for Nokia. “I think we put that to rest…. EDGE is real.”

Motorola's handset division began testing and validating pre-commercial handsets on AT&T Wireless' network in August and will begin commercial acceptance testing with the carrier in the first half of 2002. Motorola's commercial launch of handsets will be timed to support AT&T Wireless' commercial services launch, said Duane Rabe, vice president of technical staff with Motorola's handset division.

“The changes to the protocol are relatively small compared with the move from GSM to GPRS. That was a much more significant change of protocol than going to EDGE,” Rabe said. “The opportunity to deliver EDGE handsets without making huge incremental investments is very good.”

Nokia's and Motorola's initial EDGE handsets will support two time slots on the downlink, which executives say result in download speeds of between 60 and 80 kb/s. Phones supporting four time slots should allow for EDGE's maximum speeds, around 130 kb/s, later in 2003.

While EDGE supporters can lobby until they are blue in the face, the technology's success relies on a domino effect to occur. That is, once North America's carriers deploy EDGE, others will take notice and come flooding into the market.

That is the path Cingular's Reynolds is predicting: “Once you start seeing us go into commercial service in the first half of next year and building momentum in the second half with full launches at AT&T Wireless and others, handset manufacturers will follow where the demand is.”