re: repost on GS on AWE from MQ thread - AMR CODEC
The company indicated that it has enough spectrum to deploy GSM/GPRS/EDGE at 1.9MHz in virtually all of the top 100 markets and to deploy UMTS in the 1.9MHz band in over 70 of the top 100 markets, even without the NextWave spectrum.
AWE will introduce GSM's AMR codec technology in 2002 that will provide voice capacity comparable with CDMA 1XRTT
Mr. Nelson also discussed a new Adaptive Multirate Codec (AMR) -- a new speech coder that should increase the voice capacity of the current GSM networks by about four times. Current contracts with Nokia and Ericsson for GSM/GPRS base station upgrades include infrastructure to support AMR codecs.
During 2002 the company expects most of the handsets it sells to be equipped with this new AMR codec. This will make the new GSM voice capacity similar to 1XRTT technology.
As with 1XRTT, we believe that AWE will not begin to realize improvements in voice capacity until over 20% of the subscriber base use handsets with the new AMR codec. We expect the GSM adoption rate to really accelerate during 2003, leading to the voice capacity improvements.
>> To:Ramsey Su who wrote (16564)
From: quidditch Wednesday, Nov 14, 2001 12:11 PM
Respond to of 16609
From our friends at AWE, featuring CTO Rod Nelson, with some color on the upgrade path and comparisons to 1x (from GS this morning):
AWE hosted a conference call yesterday with CTO Rod Nelson to further clarify its technology upgrade strategy. AWE expects the widespread global adoption of GSM/GPRS to drive applications and technology developments that will give operators on the GSM platform an advantage over other digital technologies. AWE will introduce GSM's AMR codec technology in 2002 that will provide voice capacity comparable with CDMA 1XRTT. We continue to maintain our RL rating.
Details
UPGRADE PATH TO 3G: GPRS/GSM BY END OF 2002
Mr. Nelson indicated that AWE remains on track to complete its GSM/GPRS buildout by the end of 2002 and that the nine markets it has launched to date have been on budget and on schedule. AWE plans to launch additional GPRS markets, in several cities in Florida, later this month.
The company indicated that it has enough spectrum to deploy GSM/GPRS/EDGE at 1.9MHz in virtually all of the top 100 markets and to deploy UMTS in the 1.9MHz band in over 70 of the top 100 markets, even without the NextWave spectrum.
Mr. Nelson said that the early adopters for its GPRS service in Seattle have been using the handset tethered to a laptop for wireless Internet and network connectivity. We believe that for the enterprise market this type of application will become one of the most popular usage for wireless data.
The Motorola Timeport still remains the only GSM/GPRS handset available and retails for $199.99. Mr. Nelson indicated that a lower-end GSM/GPRS hands4et by Motorola would be available before the end of the year.
We believe that European handset manufacturers, Siemens, Nokia, Ericsson, will also be introducing new handsets for GPRS market soon. RIM in Canada will also provide a GSM/GPRS version of its popular Blackberry product during 2002.
Mr. Nelson also discussed a new Adaptive Multirate Codec (AMR) -- a new speech coder that should increase the voice capacity of the current GSM networks by about four times. Current contracts with Nokia and Ericsson for GSM/GPRS base station upgrades include infrastructure to support AMR codecs. During 2002 the company expects most of the handsets it sells to be equipped with this new AMR codec. This will make the new GSM voice capacity similar to 1XRTT technology. [Hmmm...Similar to 1X. That's revealing.]
As with 1XRTT, we believe that AWE will not begin to realize improvements in voice capacity until over 20% of the subscriber base use handsets with the new AMR codec. We expect the GSM adoption rate to really accelerate during 2003, leading to the voice capacity improvements.
MORE DETAILS ABOUT THE COST OF THE OVERLAY DISCUSSED:
Mr. Nelson indicated that the GSM/GPRS portion of the upgrade will cost about $1 billion in 2001 for the 40% overlay. We estimate that the entire overlay, therefore, will cost $2.5 billion. We estimate that the EDGE overlay will cost $500 million. Mr. Nelson said that the UMTS upgrade will be about $1billion. In all we estimate that AWE's migration will cost $4 billion, or $20 per covered pop.
Mr. Nelson indicated that AWE has installed EDGE compatible hardware in the network and that the company will add EDGE software beginning sometime next year. When completed, EDGE-capable devices will have peak data speeds of up to 384 kbps. As with GPRS and 1XRTT, we expect actual data speeds to be significantly lower.
Mr. Nelson said AWE will not aggressively promote next generation devices by heavily subsidizing handsets. Rather, he said compelling applications and handset form factors would be drivers of growth (i.e. more of a pull than a push strategy). We still believe that AWE will need to encourage GSM adoption through subsidies to alleviate network capacity constraints as well as to increase data revenues.
Nelson also outlined the company's UMTS plans, which involve installing new hardware and software at all its cell sites. The timing of this upgrade remains in the 2003 to 2004 timeframe and is expected to enable data speeds in the 2Mbps range.
Mr. Nelson explained that the latest version of GSM network infrastructure, which the company is installing today, is more inexpensively upgraded to EDGE and UMTS than are older generations of GSM now being used by many European operators. For this reason, these operators could pay more to upgrade their networks to EDGE and UMTS than AWE's estimated $1 billion.
Nelson indicated that the GSM upgrade will occur in the 1900MHz band and that, over time, the 850 MHz band will be developed to provide additional capacity in some markets.
DEVELOPMENTS WITH NTT DOCOMO SOUND PROMISING:
We believe that the agreement with DoCoMo positions the company well regarding its UMTS strategy. The agreement includes joint application development, exclusive access to i-mode technology, roaming agreements, and leverage with vendors on equipment pricing.
Mr. Nelson mentioned that much of the recent work with DoCoMo has focused on the consumer space and on developing more advanced markup languages for wireless data application software. The partnership is currently focusing on HTML as the more favored software platform because of its ease of use among current Internet content providers.
AWE is also working with DoCoMo to develop a wireless data business model, leveraging the model DoCoMo is using for its i-mode service in Japan. Fundamental to the strategy is implementing revenue sharing agreements that will benefit everyone in the value chain from application developers, to content providers to wireless carriers. [Sounds familiar]
AWE IS FUTURE FOCUSED, BUT BACKWARD COMPATABILITY COULD BE CRUCIAL
Mr. Nelson indicated that AWE believes too much focus on backward compatibility would be negative for the company in the long run. While AWE does plan to introduce GAIT phones, it will do so to service only certain groups of subscribers that will need the TDMA/GSM functionality, such as those needing to roam in markets where TDMA will remain prevalent for the short term. AWE is currently working with Siemens on a GAIT handset that should be available early next year.
We believe backward compatibility could be an issue, especially considering that AWE (as well as many of the other wireless operators) is forecasting the introduction of multiple technology enhancements over the next few years. AWE's current upgrade schedule would involve supporting existing TDMA handsets, GAIT handsets to bridge the gap between GSM and TDMA, EDGE- enabled handsets and, eventually, UMTS handsets. <<
- Eric - |
