3G Migration Status in the US
by Mark Beamen
Copyright January, 2002 Faulkner Information Services. All rights reserved.
First Steps First
How Fast is High-Speed?
Spectrum License Problems Impede Deployment
The Networks and the Standards
Cingular, AT&T, VoiceStream Launch Services
Verizon Wireless and Sprint PCS
Carriers' Next-Generation Deployment Schedules
3G Outlook in the US
Web Links for More Information
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First Steps First
As the migration to high-speed, third-generation (3G) wireless services continues at a slow pace in the US, the launch of next-generation, or 2.5G, services in select markets is beginning and lines of demarcation are being drawn on the basis of competing standards. Some carriers in the US are choosing standards such as GSM/GPRS that align themselves with European and other international carriers, and others are choosing an extension of QUALCOMM’s CDMA technology. Three of the major, national carriers in the US - AT&T Wireless, Cingular Wireless, and VoiceStream Wireless - have already gone the GSM/GPRS route.
How Fast is High-Speed?
Many in the industry boast theoretical speeds for GPRS to be around 115K bps, but the actual speeds for current services are closer to 56K bps, which is slower than desired, especially with the costs associated with network builds, but it is still a significant improvement upon current wireless data speeds in the US.
Carriers' GPRS service plans are closer to those actual speeds than the theoretical speeds. The need to boost the rates of applications, such as WAP, is needed before 3G applications can be developed and brought to market. EDGE services have theoretical speeds of around 384K bps, but the reality will be closer to approximately 115K bps.
It is not until true 3G services are deployed that wireless services begin to approach broadband-type speeds, and 3G is still years away, at least in the US.
Spectrum License Problems Impede Deployment
Standing in the way of 2.5G and eventually 3G services is the scarcity of spectrum licenses in the US. Additional spectrum will be needed for carriers to expand upon existing services, build out future networks, and launch next-generation services, usually including e-mail, instant messaging, Internet and intranet access, and multimedia applications.
The FCC has spent an inordinate amount of time finding new spectrum for wireless carriers, especially those with heavy presences in metropolitan areas. The most drastic step has been the announcement that spectrum caps would be relaxed from 45 MHz to 55 MHz in any one market until they are completely lifted in 2003. The easing of restrictions on spectrum ownership is an attempt to provide more airwaves for carriers, with the major carriers benefiting the most.
The settlement of the NextWave licensing fiasco is also a sore issue in the wireless industry, and it must be solved before the licenses won in 1996 by NextWave can be put to use. The US federal government, NextWave, and the wireless carriers that won the reclaimed licenses in the January 2001 auction reached a settlement for the licenses, but that agreement is bottled up in Congress, which must approve the deal. Verizon Wireless’ CEO was among those testifying before a House Subcommittee, urging lawmakers to pass legislation that would allow the settlement to be carried out. With the adjournment of Congress for the remainder of 2001, it will be 2002 before Congress can act, jeopardizing the agreement.
The Networks and the Standards
For the most part, network transport standards loosely dictate network performance, both current and future. Although there is no industry-wide standard in place, there are a few migration paths toward true 3G that are popular with service providers.
GPRS and EDGE
For carriers, GPRS is not an end but a step towards the still questionable and expensive goal of 3G. The standard is the first step towards packet data communications that will evolve to 3G. It is an overlay to existing GSM networks, which gives GSM network operators the ability to migrate without making significant network changes. Cingular Wireless and AT&T Wireless first needed to alter their networks from the existing TDMA to GSM before overlaying the GPRS upgrade. The two carriers have only launched service in a few markets as of the end of 2001.
As is apparent through the contracts awarded to suppliers, providers are migrating their GSM networks to GPRS with plans to migrate to true 3G eventually. To get there, most GSM-based providers are planning to first migrate to the Enhanced Data for GSM Evolution (EDGE) technology, which is sometimes billed as 2.75G. Carriers are attracted to EDGE because of the possibilities that it will triple the speeds of GPRS systems; however, the technology is seen as very complicated to deploy. At some time in the future, the carriers are expected to deploy WCDMA, the 3G version of GSM.
Carrier Networks
While licenses will need to be awarded in order for widespread next-generation and third-generation services to be implemented in the US, carriers are able to launch next-generation services in markets where they have the spectrum to do so. After making billion dollar investments in their networks in preparation for 3G, Cingular Wireless, AT&T Wireless, and VoiceStream Wireless are putting the technology to use.
Cingular Wireless furthered its plan to use GSM/GPRS strategy when it signed an agreement with VoiceStream Wireless in October to share network resources in New York, California, and Nevada to cover gaps in its own network. Furthermore, in December of 2001, Cingular Wireless signed a number of agreements for telecommunications equipment with European manufacturers. The carrier is using this equipment to build out its high-speed network throughout the US. Ericsson entered into a contract worth over $2 billion to supply Cingular with the largest portion of the core network infrastructure as well as radio network equipment and phones. Nokia signed a contract worth over $1 billion to provide a part of the GSM/EDGE network. Finally, Siemens signed a contract of over $600 million for remaining network equipment and phones.
In November of 2000, AT&T Wireless entered into agreements with four major providers as part of its investment in next-generation services. The company signed Ericsson to a letter of intent to supply third-generation, wireless network equipment. Ericsson is delivering four base stations systems: GSM for voice, GPRS for packet data, and EDGE and UMTS for high-speed 3G applications. The company is also supplying its R520 mobile phones, which AT&T Wireless will use in conjunction with the launch of its GPRS network. The GPRS system supports high-speed, packet-based access to the mobile Internet at higher rates than current mobile networks. AT&T Wireless also chose Nokia as a supplier of high-speed, mobile, Web-enabled GPRS networks. Nokia is delivering mobile network systems and wireless terminals. Furthermore, Lucent Technologies is now the major supplier of equipment for AT&T Wireless' high-speed data network and for the company's migration to third-generation services, such as UMTS. Lucent is installing its GSM base stations along with GPRS, which will work with AT&T's Digital PCS network. Lucent's equipment will also be part of AT&T Wireless' evolution to 3G. Finally, Nortel Networks is supplying IP infrastructure equipment, which will be used to offer next-generation services. Nortel's core network equipment supports 3G global standards and such mobile Internet services as video, data, graphics, and broadband multimedia services.
With all of these major vendors providing the equipment, AT&T Wireless made a deal to secure the financing. At the end of the 2000, AT&T Wireless signed an agreement to develop 3G multimedia services in a global standard, high-speed, wireless network. NTT DoCoMo purchased 406 million shares, or a 16 percent stake, of AT&T Wireless and purchased five-year warrants to buy an additional 41.7 million shares in the company. Under the agreement, AT&T Wireless is creating a wholly owned subsidiary to develop multimedia applications for its current network and a new, high-speed, wireless network built to global standards for 3G services, which will include video-mail, streaming video, and audio.
The third carrier, VoiceStream Wireless, waited until it was part of T-Mobile International, the wireless arm of Deutsche Telekom, to dramatically upgrade its network. Like AT&T, the company is benefiting from the funding of an international partner. During the past year, VoiceStream contracted Nortel Networks to provide it with upgrades for its GSM network. Under the three-year, $300 million agreement, Nortel is providing the carrier with radio base station equipment and switching and professional services, which will allow VoiceStream to offer voice and high-speed data based on GPRS technology. Nortel is also offering its Intelligent Network equipment in support of VoiceStream's location-based services. Initially, VoiceStream is installing the GPRS equipment in its Cincinnati/Dayton, Ohio, and its Rochester/Buffalo, New York markets. This will be followed with complete deployment by the first quarter 2002. The company also contracted Ericsson to expand its GSM network and to deploy EDGE infrastructure. Under the $150 million agreement, which could be worth as much as $300 million for a three-year period, Ericsson is installing GSM 1900 network equipment, such as core network and radio infrastructure in New Orleans and Virginia, and it is expanding VoiceStream's network in Florida. Ericsson will also deploy EDGE infrastructure in a number of VoiceStream markets where next-generation voice and data services will be launched.
Cingular, AT&T, VoiceStream Launch Services
With the network deals in place and their implementation schedules ready, Cingular, AT&T, and VoiceStream somewhat quietly launched their GPRS services. The amount of fanfare for the services has been low, as carriers are not ready to make promises that the technologies may not yet be able to keep.
AT&T Wireless introduced its 2.5G wireless voice and data services in the third quarter of 2001 to customers in Seattle, Las Vegas, Phoenix, and Portland, where customers can access corporate data 10 times faster than with current wireless networks. AT&T Wireless' 2.5G network lays the foundation for its future 3G services. Following this launch, AT&T Wireless brought its GSM/GPRS services to Lansing, Michigan, and to Orlando, St. Petersburg, Tampa, Daytona Beach, and South Dade County, Florida.
Cingular Wireless announced the deployment of GPRS 2.5G wireless services in Washington, Las Vegas, North Carolina, South Carolina, eastern Tennessee, and coastal Georgia. The service, dubbed Cingular Wireless Internet Express, allows for an always-on Internet connection at speeds up to 10 times faster than 2G wireless networks. Cingular expects to offer the 2.5G service in all of its markets by the middle of 2002. As one of the first GPRS-based applications to be available in the country, Cingular Wireless launched Xpress Mail for GPRS business customers. The service provides access to corporate Microsoft Exchange e-mail on GPRS handsets through Cingular Wireless Internet Express, which allows customers to switch between an Internet session and a phone call without losing the Internet connection.
The number two and number three carriers were followed quickly by VoiceStream Wireless, the only operator in the country with a complete GSM network. In the fourth quarter of 2001, VoiceStream responded to limited GPRS launches by Cingular Wireless and AT&T Wireless with the release of its own high-speed wireless data offering. The company launched iStream, which allows customers to access the Internet, corporate and Internet e-mail, and AOL E-mail and Instant Messenger at an average rate of 40K bps for an additional $2.99 per month. VoiceStream's GPRS technology is an extension of its GSM network, which will allow iStream to be available in all of VoiceStream's markets. In addition, the company reached a roaming agreement with Microcell to offer GSM/GPRS services in Canada.
Verizon Wireless and Sprint PCS
Even though AT&T, Cingular, and VoiceStream are the only carriers to launch next-generation services in the US, other leading carriers and standards should not be forgotten. Verizon Wireless, the leading operator in the US, and Sprint PCS, the operator of an all-digital network based on CDMA, are both investing in next-generation steps toward 3G. Their plans include the migration from second-generation CDMA networks to next-generation technologies and the adoption of 1XRTT, a standard that requires a new channel card in the base transceiver station, new software, and a software upgrade in the base station controller and the mobile switching center. Verizon Wireless has upgraded and tested 1XRTT networks in the New York/New Jersey metropolitan area. It and Sprint PCS are working to launch new services as they roll out improved packet data access for laptops and mobile handsets.
Some carriers are closer than others to launching their 3G plans. Each carrier has its own schedule for 2.5G and 3G implementations.
Table 1 includes the timetables for the leading US carriers.
Table 1. Next-Generation Deployment Schedules.
Carrier Technology Schedule
Verizon Wireless CDMA 1X 1X--Nationwide in 2002
CDMA 1xEV 1xEV--Following rollout of 1X
Cingular Wireless Overlay GPRS on GSM Year-end 2001
GSM/GPRS overlay on TDMA Completion by 2004
EDGE overlay on GSM/GPRS Late 2002
AT&T Wireless GPRS overlay on GSM Year-end 2002
Upgrade to EDGE Mid-2002
Upgrade to UMTS (W-CDMA) Early 2003
Sprint PCS CDMA 1X Mid-2002
CDMA 1xEV-DO (data only) 2003
CDMA 1xEV-DV (voice only) 2003-2005
VoiceStream Wireless Launch GPRS 2001
Upgrade to EDGE 2002
Source: Wireless Week
3G Outlook in The US
The future of GPRS deployment will include continued roll-outs in new markets after GPRS technology is overlaid on GSM networks. Cingular is a unique carrier in that it is installing GSM, GPRS, and EDGE in the sections of its systems that are TDMA-based or analog in the 850 MHz band. The remainder of its networks already run on the GSM standard. Cingular is the first to offer GPRS in that band and the first to combine GPRS and EDGE within the frequency. In addition, for customers with services in the 1900 MHz band (the frequency in which GPRS was designed to operate in the US) Cingular is releasing dual-band handsets.
AT&T Wireless, which plans to import a form of NTT DoCoMo's i-mode technology to the US, is looking forward to bringing its GPRS technology to 40 percent of the US population areas by the end of 2001 and to 100 percent by the end of 2002.
Finally, VoiceStream Wireless' strategy is an extension of Deutsche Telekom's wireless arm, T-Mobile International. The German company's designs include linking its list of European and American subsidiaries by the use of GPRS technology. VoiceStream's route could be easier and swifter since its network is already a complete GSM network. VoiceStream, however, is not touting its service as the highest-speed service that will blow away the competitors. While the launch offers a wide variety of applications, it does not promise the highest speeds. VoiceStream's plan, like the ultimate plan of eventual 3G launch, is only a single step toward a greater goal.
Carriers need to offer applications since they do not simply want to offer access to the Internet or intranets. While taking steps through 2.5G to 3G, carriers will use GPRS to improve upon current applications by entering agreements with wireless application service providers and content providers, allowing carriers to offer both co-branded applications and service unique to their partners. Carriers will be focusing heavily on their migration plans, but they will want to take advantage of the higher-speeds and the capabilities granted by new technologies. Agreements with ASPs and content providers will allow for new innovations in the wireless industry. |
