U.S. plans to EDGE ahead in battle against UMTS - Industry Trend or Event

CommunicationsWeek International, May 8, 2000 by Theresa Foley

UMTS is not the only mobile data technology. And it certainly will not be the first into commercial operation.

In fact, while the gavels begin crashing down at spectrum auctions across Europe, and with at least three years yet to go before high-speed Internet hits the handset, some operators in North America are readying their fast data-rate mobile services now.

The Federal Communications Commission has yet to announce how and when it plans to license spectrum for broadband wireless in the United States. But operators and vendors of one of the main technology standards in the United States want no concessions. They are adamant their data services now being rolled out can maintain U.S. online users' lead in Internet access.

And they say that services are what matters, not the mechanics of delivery.

"Too many analysts are in the technology trenches," said Umesh Amin, chairman of the Universal Wireless Communications Consortium--the world's biggest mobile industry association after the GSM and CDMA associations--which held its annual global summit in Cancun, Mexico, last month.

The UWCC represents wireless operators using time division multiple access (TDMA) technology, which accounts for about 30% of handsets sold in the United States, according to the Yankee Group, of Boston, Massachusetts.

TDMA operators are placing their bets on a wideband transmission system being developed jointly with the GSM industry called EDGE (enhanced data for global evolution).

TDMA-EDGE might not match the type of full-blown broadband wireless that UMTS operators were bidding for in the United Kingdom last month, but its operators think it will give UMTS a run for its money.

"EDGE's performance is not yet broadband," said David Nagel, president of AT&T Labs, which develops network platform technology for the U.S. operator's fixed and wireless systems. "But it is so much faster than circuit-based[ldots]that it will open a slew of new revenue opportunities. In two and a half to three years, people will be beating down the doors."

According to AT&T, GSM systems worldwide numbered some 215 million users, while TDMA had 35 million against CDMA's 50 million.

The debate over which mobile technology--TDMA or CDMA--will become the ultimate market winner in North American third-generation systems rages on as data rates begin to climb toward the 384-kilobit-per-second speeds that these networks should be able to support next year.

For the TDMA-GSM alliance to get there, developments over the next 12 months will be crucial. Networks need to be upgraded to handle the convergence; handset suppliers must successfully launch new mobile handsets by early 2001 that are able to work over either network; the content end of the business must further evolve; and business arrangements and roaming agreements need to be completed.

AT&T, one of the leaders in TDMA, has worked on EDGE technology for several years and is planning on deploying it nationally next year. In the meantime the company is experimenting with TDMA-EDGE running at 100 Kbps.

If TDMA-EDGE arrives on schedule in early 2001, it could be timed correctly for the expected massive mobile-commerce explosion in which mobile data and the Internet will collide to create hundreds of new companies.

This new wave of investment and growth is supposed to carry the TDMA-GSM community along with other mobile data technologies.

However, some industry analysts are finding it hard to get very enthusiastic about the TDMA-EDGE challenge for other reasons.

Alex Sena, telecommunications analyst at Salomon Smith Barney, New York, called the technology a "poor man's solution to 3G."

TDMA-EDGE can be rolled out quickly because it does not have to wait for the allocation of substantial new spectrum, which other broadband technologies need. Conversely, EDGE has limited capacity for the substantial traffic that wireless Internet is expected to generate.

"Only operators that do not receive new spectrum for which they can deploy 3G networks will use EDGE," said Salomon's Sena in a report. "EDGE is likely to be an expensive solution because in most networks[ldots]the radio base station hardware needs to be replaced. Thus, most carriers are likely to skip EDGE and go straight to 3G."

But operators may yet spring surprises. According to AT&T's Nagel, TDMA-EDGE could be engineered up to broadband data rates of between 1 megabit per second and 5 Mbps by 2005.

"TDMA and GSM operators can deploy EDGE in existing spectrum," said Chris Pearson, vice president of marketing for the UWCC, Bellevue, Washington, "while other technologies need new spectrum."

Other TDMA industry representatives at the UWCC avoided speculating on how many years these new standards and protocols would be in use before something better replaces them. UWCC's Amin said TDMA-EDGE can run at 2 Mbps for indoor usage already, although he did not see a market for that due to the other options already available with higher rates.

The biggest names in TDMA-GSM EDGE, such as L.M. Ericsson AB, AT&T Wireless, Lucent Technologies Inc., Nortel Networks and Alcatel, expect initial deployment of TDMA-EDGE technology in 2001, large deployments in 2002, and a Phase 2 offering in 2002-2003, when the technology will be able to handle voice over IP.