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Technology Stocks : Nokia (NOK)
NOK 6.485-0.2%11:25 AM EST

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To: Nils Mork-Ulnes who started this subject3/26/2001 4:47:57 PM
From: 49thMIMOMander   of 34857
 
Cingular Wireless finally made it official. With little fanfare, the nation's
second largest carrier declared last week it would offer general packet
radio service (GPRS) by the end of the year.

But the announcement was not the monumental decision the industry
was bracing for. Instead of following fellow TDMA carrier AT&T
Wireless's lead in declaring it would trash its current technology and
follow the GSM migration path, Cingular simply said it would deploy
GPRS backbones over its current GSM networks on the West Coast
and southeastern seaboard.

As for the rest of the carrier's far-flung networks, their status is still
undetermined, and Cingular still is being cagey about what it will do as
the rest of the industry makes the gradual — and, in some cases, painful
— shift to high-speed data services.

Cingular isn't procrastinating or being secretive; it is simply being
careful, according to Kris Rinne, Cingular's vice president for
technology and product realization.

“We see GSM and TDMA coming together, and we're continuing to
analyze the situation,” Rinne said. “The question is ‘Do we really need
to do an interim step before we begin deploying high-speed data
services?’”

For now, the company's answer is ‘no.’ Cingular is keeping its original
plans to deploy GPRS over GSM networks in California, Washington,
Nevada, the Carolinas, eastern Tennessee and coastal Georgia. It plans
to deploy Enhanced Data for GSM Evolution (EDGE) over the TDMA
and GSM footprints when the infrastructure becomes available and
demand for high-speed services is ripe.

Meanwhile, Cingular plans to offer its current TDMA 2G data services
and Mobitex infrastructure to keep wireless data stabilized until the
EDGE transplant arrives.

That strategy could be disastrous for the wireless carrier, which was
created last year as a joint venture of SBC Communications' and
BellSouth's wireless assets, according to Bob Egan, wireless research
director for Gartner.

EDGE won't be ready for commercial deployment for another 24
months. Meanwhile Cingular's competitors will be flipping the ‘on’
button on their GPRS and cdma2000 networks by the end of year,
putting Cingular at least a year behind in offering high-speed data
services to its TDMA customers — if EDGE equipment is ready to
deploy, Egan said.

“There is a lot of disillusionment about EDGE in Europe, and it won't be
rolled out in the huge quantities we were expecting last year,” Egan said.
“That means Cingular won't get the advantage of economies of scale
from mass deployments. It's going to be very, very expensive.”

Even if Cingular successfully rolls out EDGE and remains competitive in
the data game, it faces the possibility that GSM carriers worldwide will
dump EDGE and build out their W-CDMA networks, offering data
speeds and spectral efficiency far in excess of any EDGE solution.
Either way, Cingular gets the shaft, Egan said.

But jumping on the global bandwagon and converting to GSM is easier
said than done.

Rinne noted that AT&T Wireless' recent marriage to GSM didn't get
the benefit of a honeymoon. AT&T has started the expensive process
of deploying GSM-GPRS base stations alongside its TDMA base
stations — a transition that can't take place overnight.

Handsets supporting multiple standards — as well as cellular and PCS
frequencies — would add to the expense on the terminal side. And
Cingular knows the complexities of rolling out and operating a GSM
network, because it has operated Pacific Bell's GSM footprint for
years, Rinne said.

“We're a little farther along on the learning curve than AT&T,” Rinne
said.

The explanations of cost and logistics, however, do not explain the
whole story of why Cingular may be reluctant to make the switch to
GSM. In fact, the problems AT&T is encountering may seem small
compared with those Cingular would encounter if it follows its
competitor's lead, Egan said.

“Cingular, more than any other carrier in the U.S., is between a rock
and a hard place simply because of their patchwork quilt of a network,”
Egan said.

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