Slacker,
<< Can you explain the rationale for EDGE for an older GSM operator? >>
Maybe. Maybe not. <g>
I'll take a shot at it.
<< As far as I know, this still requires a rather expensive upgrade to the basestation for the increased data capacity. >>
What will EDGE cost?
This is probably the $64 Million Question, and may well be the prime determinant of the extent to which EDGE will be deployed, especially outside of the Americas, as either a complement to WCDMA for carriers with 3G licenses or as an upgrade to GPRS for those that don't.
I'll come back to that question later in this post.
<< This is at a time when the only GSM carrier I have seen report an increased amount of data usage is using imode.... >>
I think that is somewhat of a red herring.
GPRS while widely deployed, reasonably well optimized, and apparently working reasonably well, has not been marketed to any great degree by the carriers for lack of compelling applications or (cHTML or XHTML color) content, widespread GRX roaming capability, and extension of its use to prepaid subs as well as postpaid.
In addition, although GPRS handsets from a host of manufacturers are widely available and working well, we are just now starting to see "new generation" handsets that exploit the capabilities of "always on" higher speed packet data in a manner and fashion that will compel a subscriber to consider upgrading handset and subscribe data applications.
Essentially I am talking about color displays, MIDP Java, MMS, SynchML, embedded and attachable cameras, and browsers that support WAP 1.21/XHTML or WAP 2.0/XHTML with Cascading Style Sheets, and on the high end 32-bit Symbian, Microsoft, Palm, OS's that enable smart phone capabilities, faster processors and more storage, and of course most of these have to be supported on the backend by new software based servers and gateways, supported by the developer community, and last but certainly not least be interoperable across networks.
{Not to different than 1xRTT in the US]
In addition the carriers have adopted MMS en masse as both an application and an application enabler even while they ready Java servers and encourage developers to develop Java apps as well as XHTML content.
We are nowhere near the critical mass (generally calculated as 25% of the subscriber base) in GPRS handsets necessary to encourage user adoption of data services. Less than 60 million GPRS handsets have delivered through Q3 end and that is only enough to equip 8% of the GSM user base. In the next 15 months about 250 million will deliver and handsets will have exceeded critical mass, MMS interoperability issues will be history and the Data Gods willing, packet data take-up will be entering a period of hypergrowth as approximately 80% of handsets deliver with GPRS while the cycle repeats with the incorporation of EDGE. The stage will be set for capacity enhancements and hopefully for increased bit-rates.
[I'm using Matt Hoffman's July numbers above which I think are reasonable give or take 10% and EMC's GSM sub forecast through 2003].
Let's face it GPRS is a capacity hog, and even with available GSM capacity enhancements such as frequency multiple reuse and frequency hopping, data takeup will dictate consideration of additional capacity enhancement in the relatively near term, IMO, particularly if carriers relax data tariffs, which I think they have kept artificially high, to encourage higher data use and start to drive ARPU.
As carriers reevaluate business models which most are doing, they have to at least consider EDGE as an alternative or complement to WCDMA if they are licensed for 3G or consider EDGE as an upgrade to GPRS if they aren't in order to compete with 3G, just as they need to consider sticking with GPRS if data takeup fails to materialize to the extent they had planned.
This gets us back to the question: "what does EDGE Cost?" and I'm not sure the answer is really known
I think the answer is that it is going to cost less, perhaps considerably less than some conjectured a few years back and the actual cost may be determined by the margin Nokia, Ericsson, Siemens and Nortel attach to the software and hardware (when hardware is involved). In any case it will cost considerably less than WCDMA or any flavor of cdma..
I think it is pretty clear that the newer the equipment being upgraded the less it will cost. The newest equipment will require a software only upgrade. AWS Rogers, Cingular, and Telcel, will pay less than VoiceStream, who will pay less than Optus or Telstra, or Starhub.
Mike Woolfrey of EMC Cellular explored this issue back in March:
The logic behind Nokia and Ericsson's backing of EDGE is rational: spectrum is an expensive commodity, UMTS license prices are testament to this. Therefore it makes sense to maximize the potential of existing 2G (900+1800MHz) spectrum. To that extent EDGE is the complete evolution path for 2G/GSM spectrum.
Whilst the performance of EDGE is still the subject of much debate it is generally accepted that EDGE performance will exceed that of GPRS, typically tripling of data rates per timeslot. Although peak data rates are promoted at 473Kbps it must be remembered that GPRS was originally positioned at 171Kbps and subsequently 115Kbps, live networks are operating in the 10-40Kbps range. A more likely scenario is that EDGE will offer performance at around 50-80Kbps depending on the coding scheme used and timeslot allocation.
EDGE is described by Ericsson as the next logical investment and a simple upgrade to GPRS. It is somewhat unclear on just how simple the upgrade is. The process is largely formed by two processes. Both relate to the GERAN (GPRS/EDGE Radio Access Network), the first is a physical upgrade of the transceiver in BTS, the second an over-the-air software change. There is no change to the core (SGSN, GGSN, PCU), as this has been upgraded as part of the move to GPRS. The same 3GPP compliant core can be used for GPRS, EDGE and UMTS radio networks.
However it is the issue of the upgrading of the BTS that attracts the most interest. Both Nokia and Ericsson have been installing EDGE-ready BTS prior to any launch, this has been part of the move to GPRS, and as capacity requirements have led to the revisiting of numerous cell locations. To that extent the manufacturers have been pre-loading EDGE into networks with a view to activating it once GPRS capacity dictates. There has been speculation that legacy cabinets would not be able to house the new transceivers: both Ericsson and Nokia maintain that only the very old systems would need new cabinets and racks, and that most of existing networks have been upgraded as a matter of course.
Both also refute the claim that cell coverage will differ from existing GSM/GPRS, and therefore existing locations and network layout schemes are still relevant. Like other radio systems there will be reduction in performance at the cell extremes, although exact levels are unknown. The other big unknown on the 'simple upgrade' is cost, both vendors are hesitant to divulge any detail, although some quarters put it as low as 7% of the cumulative GSM investment.
In addition to increased bit rate and/or capacity EDGE offers QoS comparable to WCDMA.
Some carriers may continue with their 3GSM WCDMA buildout plans and milk GPRS for all its worth. Some though may postpone the 3GSM WCDMA and move to EDGE as an interim step before moving to EDGE as circumstances and justification dictate. Momentum appears to be building for EDGE.
Best I can do with that question.
Best,
- Eric - |
