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To: Eric L who wrote (2860)	3/24/2003 10:00:20 AM
From: Eric L	Read Replies (1) \| Respond to of 9255

Regulatory: EDGE Singapore Flip Flopping If regulators anywhere 3G licenses have been awarded relax buildout requirements EDGE has a good chance of being implemented as an inband complement to WCDMA. If they aren't relaxed it may be another matter. >> EDGE-ing Towards 3G Cost savings for EDGE seem compelling, but will telcos risk upsetting the regulator? The Business Times Singapore March 24, 2003 Angela Tan Atelecom operator recently did a survey which showed that of the three major applications that consumers want, video-telephony and video-messaging can already be done over the existing networks. The exception is video-streaming, that requires 3G technology, which is touted to allow high speed access to the Internet, voice and data streaming over a mobile device. But even this is now debatable. Rapid improvements in technology, at lower cost, put in question the need to ramp up expensive 3G networks quickly. One such technology is EDGE or Enhanced Data Rates for Global Evolution, which can provide faster speeds using existing Global System for Mobile Communications (GSM) - the mobile standard in Singapore - and General Packet Radio Access Network (GPRS) investments. The dilemma for the local telcos is that the industry regulator, the Infocomm Development Authority of Singapore (IDA), is holding them to their contractual obligation to roll out 3G by end-2004. Yet EDGE beckons enticingly. Analysts say that with EDGE, operators can provide consumers with a three-fold increase in data rates and capacity through their existing GSM/GPRS networks, boosting revenues and reducing the cost of building new capacity. Basically, GPRS provides upper-end speeds of around 40 kilobits per second (kbps) and EDGE, 120 kbps. It is also backwards compatible to GSM/GPRS services, meaning there should be no problem for a GSM/GPRS mobile phone user to talk to another using an EDGE phone. Nokia and Motorola have already announced EDGE phones. 'EDGE will be lower in costs compared to 3G in terms of capex,' SingTel Mobile's chief executive officer Lucas Chow told BizIT. With telcos understandably trying to get the best out of existing infrastructure rather than invest in new ones, the financial arguments in favour of EDGE adoption are quite strong. Some operator-driven studies have shown that the cost of upgrading a GPRS network to EDGE would be about 7-15 per cent of total initial GSM investments. It has been estimated that it only takes US$1-2 cost per user to upgrade from GPRS to EDGE. According to the Global Mobile Suppliers Association, most GPRS-enabled base stations can simply be upgraded to EDGE using relatively low cost software and hardware upgrades. There is also no need for additional antennae sites when deploying EDGE. As for end-user devices, the cost of adding EDGE into the mobile device is said to be minimal when compared to a GPRS compatible phone with similar features and functions. More importantly, EDGE can provide the testing ground for consumers' appetite for higher speed like those provided by 3G networks, and signal to operators the viability of pumping more money into building their 3G networks. The important thing is to get the demand out there first. Given these arguments for EDGE, it would appear wise for telcos to consider the technology before migrating to 3G. But none of the telcos here appear willing to do that. The reason, as summed up succinctly by SingTel's Mr Chow: It does not make sense to invest in EDGE given the end-2004 deadline for nationwide 3G rollout. 'EDGE will be very shortlived . . . But if the deadline were flexible, we can look at what EDGE can do for us,' Mr Chow said. He did add, however, that 'in my opinion, we can still do better in terms of GPRS roaming . . . I also don't think we have fully utilised what the GSM network can support'. MobileOne's chief executive officer Neil Montefiore said he did not rule EDGE out: 'Maybe towards the end of this year, when every handset supports this technology. In which case, it might be worth putting in this technology into the network. It is slightly cheaper than 3G but not cheap.' If mistakes from the past were to be learnt, the industry now should not be focusing too much on technology but on applications. If indeed 3G applications can be provided on the so-called 2.5-2.75G networks, telcos should think twice about 3G. According to Gartner's Research Director of Asia Pacific Telecom & Networking, Geoff Johnson, 'the only places in the world where we really need 3G because you need capacity are those cities with population of about 10 million'. So it is a function of population size and spectral density. What does this mean for Singapore with a population of four million? Moreover, some studies have shown that less than 10 per cent of the mobile phone population would willingly pay a 15-20 per cent premium over current services for faster speeds. Perhaps the savings from adopting EDGE could be even more than the $100 million the Singapore telcos each spent on their 3G licences, making it worth their while to consider cutting losses. Even if it means the risk of incurring disciplinary action from IDA. At the end of the day, though, it is unlikely that telcos here will want to risk upsetting the regulator. They are more likely to continue to be polite and circumspect in doing business here. That's the reality. << - Eric -