NEW YORK-Calling it “the most well-known secret in corporate America,” Stephen Carter, president and chief executive officer of Cingular Wireless, said the nation’s second-largest mobile operator will overlay all its TDMA and analog networks with EDGE, a software enhancement of GPRS technology.
Atlanta-based Cingular, with 22 million subscribers, is a joint venture of SBC Communications Inc., San Antonio, Texas, and BellSouth Corp, Atlanta.
“As we move through 2003, just about all our major markets will be tied up, although there may be a few smaller markets that spill over into 2004,” he said.
Carter said the carrier plans to implement W-CDMA later. “But that requires more spectrum, so we can’t plan for it unless we see major developments in spectral efficiency or more available spectrum.”
Based on “conservative assumptions” of data adoption, Cingular expects to have sufficient spectrum capacity for another five years, said Bill Clift, chief technical officer.
Domestic cellular carriers average 25 megahertz of spectrum in each market, about a third of their European counterparts, so the spectral efficiencies EDGE offers in both voice and data communications were a key consideration in Cingular’s decision, Carter said.
“Unlike what you might hear out of San Diego and elsewhere, EDGE offers capacity and spectrum efficiency that is competitive with any technology choice,” said Clift, who has spent the past year evaluating alternatives.
“There is a lot of misinformation out there about CDMA 1xRTT. With techniques like adaptive rate vocoding and antenna and frequency hopping, GSM technology is competitive.”
Cingular Wireless expects to pay about $3 billion total for an EDGE upgrade, or approximately $18-$19 for each covered pop. Although the carrier expects the overall cost of this choice through 2010 to be cheaper than the CDMA alternative, Clift said the company did not compare the two technologies on a price per-pop basis.
The CTO also said that earlier news reports anticipating the carrier’s EDGE choice confused cause and effect. Cingular already had decided on EDGE before it announced earlier this month an infrastructure joint venture to offer its services in New York over the GSM network of VoiceStream Wireless Corp., while VoiceStream will offer its services on Cingular’s network in California and Nevada. Cingular did not choose EDGE because of its network sharing agreement with VoiceStream and would not have entered into the venture had it not already chosen EDGE, Clift said.
Excluding New York, 30 percent of Cingular’s networks, specifically those in California, Washington, Nevada, the Carolinas, Tennessee and Georgia, already use GSM technology. Addressing the “pundits who claim EDGE would never see commercial reality,” Carter said he expects the networks in these markets and New York to be upgraded to EDGE by year-end, with handset availability to follow during the first half of 2002.
“EDGE is more evolutionary than revolutionary change from GSM. The cost of upgrading our existing GSM network relative to the capacity increase is ridiculously low, a maximum of 10-15 percent of network cost,” Clift said.
“We would have had to do a 100-percent overlay to do CDMA. Plus, there is the sheer volume of GSM worldwide. That translates into a $15-$25 differential in (individual) handset costs, which becomes significant when you sell millions of phones,” Clift said.
Cingular has awarded contracts to L.M. Ericsson, Nokia Corp. and Siemens AG for EDGE network elements and handsets using 1900 MHz and 850 MHz frequency bands, Carter said. However, Clift said that none of the three vendors knows what share of the total the carrier has allocated to each.
“Till now GSM in the United States has worked in 1900 MHz. The down banding of GSM to 850 MHz gives Cingular significant advantages, especially in rural and dispersed areas, because there is better propagation in lower spectrum positions. That means fewer radio towers,” Clift said.
“Our decision will enable the U.S. industry, including smaller regional players without economies of scale, to make a commitment to EDGE.”
Ericsson believes Cingular will be the first carrier to use this dual-band strategy, said Torbjorn Nilsson, senior vice president of marketing and strategic business development for Ericsson.
“EDGE will be in all the operators going the GSM road because there are not many other choices, given frequencies available. I am relatively sure European operators will (choose it) because it increases efficiency by a factor of three relative to GPRS,” he said.
Nokia, which supplies second-generation GSM phones to Cingular, is pleased to participate in supply EDGE phones for the upgrade, said JT Bergqvist, senior vice president of Nokia Networks. However, moving beyond handsets to participate in provision of EDGE network elements “is a major step for Nokia,” he added.
Siemens, which is third-largest GSM technology supplier in the world, “does not necessarily have the best coverage in this (the American) market, so this agreement with Cingular is a major breakthrough for us,” said Valentin Chapero Rueda, president of mobile communication networks.
By spring Cingular expects volume deliveries of dual-band GAIT (GSM ANSI 41 Interoperability Team) phones that can access TDMA 850 and GSM 1900 networks, Clift said. By early summer, the carrier anticipates making commercially available GAIT phones incorporating GSM 850 functionality.
“These will allow customers to use them as TDMA phones in their home markets and, as the overlay transitions, to roam into surrounding markets regardless of the status of the transition in their home market. They will stay on our network instead of roaming outside of it,” Clift said.
“There is no difference in the cost of GAIT phones. There is more of a difference between GSM and GPRS phones. But we might pay an incremental subsidy in GAIT.”
Data adoption depends on a variety of factors, including applications individual and business customers find useful, data speeds and battery life between charges.
When used for voice communications, EDGE consumes the same amount of power as any other voice technology, Nokia’s Bergqvist said. For data communications, which demand more power, “we have found battery life to be not only acceptable but good,” he added.
EDGE provides data at peak rates of about 470 kilobits per second, although average throughput is in the range of 100 kpbs to 150 kpbs, which Clift likened to “ISDN-like services in the palm of your hand.”
On the applications side, Cingular today is focused primarily on enterprise customers. It is moving beyond Fortune 1000 corporations to offering outsourced consulting for smaller companies without their own in-house expertise in communications and information technology.
