UMTS Future Looks Gloomy
By Peggy Albright
While U.S. operators are rolling out target dates for their third-generation services, scheduled deployment dates in Europe are
looking less feasible.
Last week the London-based industry research firm EMC issued a report concluding that “true commercial UMTS launches”
are unlikely to occur in Europe before the end of 2003, primarily due to an expected lack of handsets.
That’s a year later than Europe’s previously expected launch of public networks planned for 2002. It also is well after U.S.
operators intend to deploy the first phase of their 3G network upgrades.
UMTS refers to universal mobile telecommunications services, the European implementation of wideband-CDMA. In the
United States, some operators will pursue W-CDMA while others will use interim technologies such as enhanced data rate for
global evolution, or EDGE, general packet radio services typically referred to as GPRS, cdma2000 1XRTT or a combination
of technologies.
The prospect of any delay in the UMTS launch does not bode well for European operators, particularly in the United Kingdom
and Germany, where operator-led consortiums paid through the nose for 3G licenses. Those operators need to offer new
revenue-building services as quickly as possible to capture a return on their investment.
Does that spell good news for U.S. operators scrambling to keep pace with European counterparts?
The race to be first–for both operators and vendors–promises marketing advantages. But those who follow, if they use the
same network equipment, will benefit from economies of scale. The global partnerships that link European and U.S. companies,
however, will feel the fallout from European delays in the United States as well.
As projected deployment dates draw near, skepticism about launching any technology is increasing. First, doubts surfaced
about the technical feasibility of EDGE. Now, doubts arise about the scheduling feasibility of UMTS. Some are revisiting the
promise of the less-popular EDGE option.
“People are learning earlier than usual this is going to be a very slow, painful process,” observes analyst Herschel Shosteck.
EMC says it based its gloomy UMTS report on the still-underdeveloped handset market–it’s still too early in the chip and
handset development stage for phones to hit the market by 2002. Under EMC’s definition, “launching” means a consumer can
go to any cellular shop, buy a handset and get services.
But Chris Wildey, vice chairman of the UMTS Forum, says no new technology of this magnitude can be introduced overnight.
“We’re not expecting a big bang solution because the forum has always said that commercial operations will start in 2002, and
will develop into a mass market as we move through the following years.” The EMC report, and another issued by the
GPRS-EDGE-UMTS consulting firm Northstream, suggests that the TDMA-GSM evolutionary technology, EDGE, may
revive itself in a delayed UMTS rollout.
But Shosteck’s firm maintains its stance that neither EDGE nor cdma2000 will ever be able to achieve the economies of scale
that UMTS promises, and the latter option ultimately will prevail over all of them. It’s only a matter of when UMTS takes over.
Shosteck agrees with EMC that the end of 2003 may be optimistic. |
