Re: Latest Lynette "journalism" - AT&T going GSM ? - More "sources say"
<< Luna is a journalist ... she is in the group of enlightened converts that used to bash QCOM >>
Since Lynette Luna left "RCR" and joined "Telephony" as senior editor responsible for directing the publication’s coverage of the wireless industry, she has most certainly become quite prolific.
Last week we had Tim Luke saying:
"We believe growing evidence that some carriers currently using TDMA and iDEN technology may be considering upgrading to Qualcomm`s 1X-CDMA technology as they migrate to data enabled networks may be viewed as a major strategic positive for QCOM."
He then went on to state:
Respected journal `Telephony` has reported this week that Bell South International in Brazil is considering migrating to 1X-CDMA technology in order to provide wireless data ahead of its rivals. We believe success in Brazil could potentially lead US parent Cingular(SBC/Bell South) to consider 1X.
This leads us right back to Lynette's article in Telephony that has been frequently quoted here, and her 9/11 RCR article on the same subject.
Would you care to comment on her latest 2 articles from this weeks issue?
JUMPING SHIP: AT&T Wireless plans bold move to GSM
Lynnette Luna
Telephony
November 13, 2000
internettelephony.com
AT&T Wireless is planning a move that could have unsettling consequences for its fellow TDMA operators in North America. Sources close to the carrier say AT&T Wireless plans to deploy GSM technology in the U.S. This decision gives AT&T Wireless a quicker wireless data play, greater economies of scale and a closer alliance with GSM carriers in Europe, analysts said.
An AT&T Wireless spokesman declined to comment on the carrier’s plans. Rumors of such a move began circulating in October on Wall Street.
The question is, why invest in a new technology before third generation comes along?
AT&T Wireless has grappled with how to boost its sagging share price, which has traded well below the company’s initial offering price and hasn’t risen since parent company AT&T announced it will spin off the division altogether. Analysts have been concerned about AT&T Wireless’ data play. While it waits for 3G enhanced data for GSM evolution (EDGE) technology, the carrier is offering cellular digital packet data service, but coverage areas are sparse, and handset offerings are few and sales disappointing.
And waiting for EDGE technology means that AT&T Wireless will commercially deploy high-speed data services later than the majority of its nationwide competitors - in 2003. The 2.5G data strategy for GSM carriers is general packet radio service (GPRS), which will allow AT&T to enter the market at the same time as many of its CDMA competitors, analysts said.
"This is a survival strategy," said Bob Egan, vice president of mobile and wireless services with GartnerGroup. "What we’re talking about is the inability to actually get network equipment and terminals. The business market waits for no one."
Gartner earlier this year downgraded its recommendation for AT&T Wireless in the enterprise market primarily based on the company’s data story.
"Although [AT&T Wireless] has clearly shown vision for future data services, we remain concerned about its timing and ability to deliver upon that vision," Phillip Redman, senior analyst with Gartner, noted in a report.
EDGE technology is a direct investment in an unproven data market, and its timing is unclear. But GPRS technology would allow AT&T Wireless to deploy data on a channel-by-channel basis as demand for data services increases, said Larry Swasey, senior vice president of the communications research practice at Allied Business Intelligence.
Analysts also debated how many vendors were dedicated to making EDGE products. Though EDGE technology also is a 3G evolution path for GSM technology, carriers in Europe have not announced intentions to deploy it, eroding the economies of scale that U.S. TDMA operators sought by aligning themselves with the GSM community. Vendors such as Nokia that want to play a bigger role in the U.S. infrastructure market haven’t been keen on developing EDGE technology for a few key customers.
There may be other factors at play. Japan’s NTT DoCoMo is eyeing an ownership stake in a U.S. operator and has been rumored to be in talks with AT&T Wireless and Cingular Wireless, the wireless joint venture of BellSouth and SBC Communications.
DoCoMo also has stated its interest in transporting i-mode - the company’s highly successful data offering - to GSM operators in Europe through its investment in Dutch operator KPN and a 3G consortium in the U.K. "We hope to see i-mode in Europe soon," said Brian Dargel, DoCoMo’s associate manager of the IMT-2000 Group for its global business department, at last month’s Wireless IT show in Santa Clara, Calif.
An investment in a U.S. operator could help the i-mode development process. "Going from compact HTML to the next version of i-mode over GPRS could be very similar to what we’re used to writing here," Swasey said. "[DoCoMo] can port them over. They haven’t seen third-party developers come along and make this happen to fit in with the GSM community."
It’s unclear what strategy AT&T Wireless will take in deploying the technology. The operator owns hundreds of 10 MHz licenses in the 1900 MHz band and has not deployed TDMA service in most of them. The majority of the carrier’s spectrum, however, lies in the 850 MHz band, and no GSM equipment is developed for this band today. Moreover, AT&T has moved most of its major trading area PCS licenses to its TDMA affiliates TeleCorp PCS and Triton PCS, which have a pending merger.
In a recent report, Kevin Condon, wireless services analyst with UBS Warburg, said a likely scenario of deployment would call for AT&T Wireless to overlay GSM technology in its existing TDMA networks and build GSM technology in the 1900 MHz bands.
"More than likely, a strategy would be similar to strategies going on in Europe," Egan said. "The new spectrum will be populated first [with UMTS], and EDGE is likely to become a backfill. I don’t think they are going to complicate subscriber legacy."
One significant negative of AT&T Wireless’ GSM strategy is that multimode/multiband TDMA/GSM handsets may not become available for some time and may lack a significant number of form factors that are an important point of sale, Condon said.
Cost is another consideration. Because GSM technology is the most widely deployed technology worldwide, the economies of scale associated with it allow for cheaper equipment and a better selection of handsets. But AT&T Wireless has spent billions building out TDMA and bolstering capacity in many markets. Investing in a non-3G technology may hurt the company. It also is likely to spend more to get new spectrum for wideband-CDMA technology.
"Perhaps most perplexing regarding a potential move to GSM is the fact that the GSM evolution and the TDMA evolution to higher speeds supposedly cross paths in 2002 with the rollout of EDGE," Condon said. The cost benefits of GSM would have to be large enough to justify a buildout in AT&T’s current markets, Condon said.
"We believe that rolling out GSM side by side with TDMA would only make sense if management concluded that it would not be able to roll out EDGE until 2004 or later and, therefore, needs a 2.5G migration path," he said.
The implications for existing TDMA operators such as Cingular, AT&T Wireless’ affiliates and Canada’s Rogers Cantel could be significant. AT&T Wireless has carried the economies of scale for TDMA technology and has spent several years signing affiliate, joint venture and roaming agreements with other carriers willing to deploy TDMA technology. The backlash could run high.
AT&T Wireless’ change will put pressure on Cingular. It would become a major remaining TDMA operator unattractive to vendors that don’t want to put the research and development dollars into one carrier.
While partner BellSouth supports a transition to CDMA-based 1XRTT, SBC has resisted such a move, sources close to the company said.
Already, BellSouth International is seeking a move from TDMA to 1X technology in its Latin American properties. And Nextel, which uses GSM-derivative iDEN technology, also is considering 1X technology for the next generation rather than waiting for EDGE. <<
>> GOING GLOBAL?
Lynnette Luna
Telephony
November 13, 2000
internettelephony.com
For Bob Egan, vice president of mobile and wireless services with GartnerGroup, AT&T Wireless’ move to GSM technology is a two-year prediction come true.
"It represents one of the most significant and positive moves by AT&T Wireless in over five years," he said. "Why? It allows them to get a comprehensive solution out and lay a competitive strike for an international foundation and reach beyond North America.... It’s about big footprints that go from regional solutions to international solutions, and anyone that doesn’t have that will get obliterated."
AT&T Wireless in the next two years either will acquire an international carrier or be acquired, Egan predicts. European operators are clamoring to take ownership in the U.S. market, which promises huge growth potential. A carrier with a technology compatible with Europe makes an attractive buy, witnessed by Deutsche Telekom’s approximately $50 billion price tag on GSM operator VoiceStream, which has 80% fewer subscribers than AT&T Wireless and lacks a nationwide footprint.
And the stage is set after parent AT&T last month announced plans to spin off AT&T Wireless. The carrier has two years to become an independent company with asset-based stocks. BT Wireless is the first bet. The two have an alliance called Advance, designed to create seamless mobile communications services worldwide for global travelers and multinational companies. The two carriers are waiting for GSM/TDMA handsets that are expected to be available early next year, and a joint billing system already is established.
Both have hammered about 100 roaming agreements worldwide and are facilitating the service today via subscriber identification module cards. But BT doesn’t have large plans for EDGE technology in the future, leaving both companies searching for ways to seamlessly integrate. BT announced plans to offer up to 25% of BT Wireless stock. <<
- Eric - |
