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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Gregory Rasp who wrote (5616)	4/29/2000 4:56:00 PM
From: Kenneth E. Phillipps	Respond to of 14638

Article on 3G and GRPS. Article mentions Ericsson and Nortel only. Is Lucent a player in GRPS? Apparently, GRPS is a step towards 3G in North America - sort of a 2.5G I see where Lucent has conducted interoperability tests for their chip sets with Nokia GRPS infrastructure but are not a supplier of GRPS infrastructure themselves. lucent.com GPRS: DEVELOPING THE 3G WIRELESS MARKET telecommagazine.com Telecommunications Online (Americas Edition) April 2000 By George Malim Is 3G a stepping stone or a lasting solution for wireless data? The answers lie in the applications. Amidst the hype surrounding third generation (3G) mobile communications, general packet radio service (GPRS) has often been seen as a poor relation to 3G technologies or dismissed as merely a stepping stone. However, with the bulk of operators running GPRS trials and many planning full commercial rollout within the next year, GPRS is being reassessed. Many vendor and operator executives see GPRS, rather than 3G, as the driver of a fundamental shift in mobile communication habits. 3G remains the buzz technology but GPRS is increasingly recognized as a bridge to it. GPRS presents users and operators with a cost-effective, fast route to the functionality required to run a new generation of mobile services. All major players have aligned themselves with GPRS and embraced it into their long-term strategies. The only major concern is the arrival of a portfolio of ?must have? applications designed for 3G that may end the commercial viability of GPRS prematurely as consumers switch to 3G technologies to access the greater functionality of these killer apps. According to Filip Lindell, senior manager of wireless strategies at Ericsson, the appearance of new services is critical for both GPRS and 3G technology. ?The concern is what and where the new services are. In Europe there is the assumption of a pent-up demand for applications and services. Operators want to eliminate delays. In the United States, operators identify the European momentum as a driver for replacing networks with GPRS, he said. Bogdan Sacuiu, project manager of sales and market operations for TDMA systems at Ericsson, enlarges on Lindell?s theme: GPRS deployment may be in trouble if a new bandwidth-intensive application arises. The main danger of staying in 2G is the threat of new applications but the key decision for operators is which way to go in 3G. There is no one technology better than the other: It depends on an operator?s strategy. The best option may be GPRS, 3G or a combination of them. The key factors behind the success of GPRS will be the infrastructure, terminal performance and education of users to adopt new services and maximize the functionality available in their handsets. With new applications it is a case of fulfilling the unpresented need. At the end of the day no one will sell speed. They will sell services and functionality rather than technical specification. John Darnborough, senior manager of wireless data applications and services at Nortel Networks, has a similar view. In many cases it depends on the operators. Many see GPRS as a means to develop and learn about the market for wireless Internet. Most operators expect to bid for or be awarded 3G licenses, but inevitably some will not gain these and GPRS, in some markets, will be seen as a means to compete. In addition, for operators with lots of spectrum, GPRS--perhaps with enhanced data rates for global evolution (EDGE)--may be sufficient.? Stuart Newstead, head of commercial development for data services at BTCellnet, is also enthusiastic about GPRS. ?For us 3G is a bigger, better version of GPRS. The train to be on is leaving the station now. Early universal mobile telecommunications system (UMTS) service success will be defined by the achievement of GPRS operators. Many companies around the world are testing the technology in preparation for commercial launches throughout the year. In Hong Kong SmarTone successfully demonstrated multiple live GPRS calls with Internet surfing, e-mail handling and FTP file transfers. SmarTone plans to launch its service in mid-2000 and expects to be the first GPRS operator in Asia. A Stable Technology? As GPRS approaches commercial rollout, vendors and operators are relaxed about its capabilities. Any new technology has issues that need to be resolved, Newstead said. It takes time to get it stable and achieve speed. Then it is important to move onto applications and get the network sorted. However, GPRS trials have caused no shocks. At the launch well have more than 30 kbps of actual speed and by the end of 2000 we?ll have over 50 kbps--without doing anything clever. Mike Short, chairman of the Mobile Data Association, commented: There are bound to be some issues during the trial period. However, there are no major stoppers. Nortel Networks? Darnborough agrees. I'm not aware of anything unexpected. GPRS is an immature technology and standards have just been completed. There are always teething troubles with any new technology but for me the most disappointing element is the lack of highly specified terminals. GPRS deployment is currently limited by terminal capability and availability.? Darnborough is happy with the technology but favors adopting a soft approach to marketing it to end users. Operators and vendors will have to be careful not to overemphasize the data speed,? he said. This currently stands at 20 kbps to 30 kbps [for practical commercial service] but is not fast Internet. Within six to 12 months those data rates will improve as new terminals come onto the market. Gunnar Liljegren, director of business development, sales and marketing for GSM new accounts and UMTS at Ericsson, has become a convert. ?Last year I perceived GPRS as a 2.5G solution or an upgrade. Now I see it as the first step to 3G. The big step is to GPRS and it will make the step to 3G smaller. It is a low-risk alternative. The cost is limited and it seems reasonable to try out and learn with GPRS rather than the heavy investment required for 3G. It is also important to remember the indirect revenues GPRS can offer. It does a lot for the brand value of the operator which attracts users and reduces churn. Importance of Applications The success of GPRS and 3G will depend upon applications. While wireless Internet remains a distant prospect for most consumers, applications such as short message service (SMS) are growing in popularity despite their cumbersome nature. Anna Hultman, marketing manager of wireless Internet at Ericsson, said about 1 billion SMS messages are sent a year--a figure which will continue to grow. ?GPRS will be necessary to make SMS more user-friendly, she said. It will enhance functionality and be particularly useful for time-specific information services such as wireless ticketing which are currently SMS-based but will migrate to Wireless Application Protocol (WAP). Ericsson has a threefold strategy for the new generation of applications: Developing internal solutions necessary for delivering end-to-end solutions; Developing applications with partners such as software houses and content developers; and Working on facilitation and simulation to act as a catalyst for application service providers (ASPs) to develop applications for GPRS and 3G. No one seems to underestimate the significance of applications. Voice is becoming more of a commodity and the way forward is to develop value-added services which will be rolled out on the back of the Internet wave,? Darnborough said. Nortel Networks is working with Hewlett-Packard to develop platforms for ASPs. He sees personal digital assistant (PDA)-based services as one of the most exciting areas. According to Peter Lowten, business manager of the GPRS Business Applications Alliance (GAA), an industry neutral body set up to ensure real applications that work when hardware comes onto the market, ?Few people know how applications would work over GPRS and our aim is to grow the pie for the whole market and spread a knowledge base through the industry. However, Lowten understands that billing could be a stumbling block: If you can?t bill you can't play and you can only charge at an acceptable level and method. A megabit is a meaningless unit to most consumers. The applications are critical--without them there is no point launching any technology, Newstead said. It is not an issue of selling speed, its selling always-on connectivity with mobile Internet access. The crucial thing is to make the user experience far better with mobile data today. It is important we translate the technology into things people want to use and that we don't launch just a technology. By June, GPRS services will be up and running worldwide. It is only then that industry hopes for GPRS will be realized or dashed. George Malim is features editor for Telecommunications (International edition) <<