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As U.S. demand for data services explodes, EDGE catches on
Ericsson On / December 2004

By Larry Luxner

When America's two largest GSM operators, Cingular Wireless and AT&T Wireless, say they have the edge, it's not just marketing hype.

EDGE stands for Enhanced Datarate for Global Evolution, and it's a global standard that allows second-generation (2G) networks to deliver broadband-like data speeds to mobile devices. It lets operators utilize their spectrum as effectively as possible as more and more wireless customers use their cellphones and laptop computers to connect to the Internet and send and receive data, including digital images, web pages and photographs.

The new technology, which in most cases consists of a software upgrade to radio base stations, was developed jointly by industry leaders including Ericsson, Nokia, Siemens, Nortel and Motorola. EDGE got its biggest boost this year when Atlanta-based Cingular, with 25 million subscribers, installed the new software for its nationwide network. AT&T Wireless, with 21 million subscribers, did the same in 2003; the two companies now plan to merge by year's end.

While EDGE doesn't quite measure up to UMTS (Universal Mobile Telephony Service, also known as 3G) in terms of data transmission speeds, it also does not require any major investment in hardware or spectrum allocation — and for most customers its performance is more than adequate.

"European operators were very rich in spectrum after their auctions, but here in the United States, we didn't have the extra spectrum to deploy 10 megahertz of 3G technology," said Keith Shank, vice-president of business development for Ericsson's North American key operations group. "We had to work with the 1900-MHz and 850-MHz bands already available to us. EDGE's advantage is that it works off the GSM platform and utilizes the same spectrum that GSM occupies."

Shank says it costs an average $1.65 per pop to implement EDGE, "unbelievably inexpensive compared to the cost of an entire new network."

One of EDGE's biggest proponents is 3G Americas, a wireless industry association of GSM operators and vendors. Chris Pearson, president of 3G Americas, says over 100 operators worldwide have commercially launched or will deploy EDGE technology.

"EDGE gives operators a way to take their existing GSM/GPRS networks and upgrade them efficiently to third-generation speeds for their customers at only $1-2 per pop," he said. "One of the advantages is that operators can utilize their existing spectrum, so they don't have to go out and buy new spectrum, which has happened in many parts of the world. Even if you have UMTS deployment, EDGE is a great complement."

Those sentiments are echoed by Ritch Blasi, director of media relations for AT&T Wireless, which is headquartered in Redmond, Washington.

"EDGE provides us and our customers with the fastest national wireless data network in the United States," he said, noting that it offers data speeds of 100 to 130 kilobits per second, with bursts of up to 200 kbps.

"EDGE was a simple upgrade to our GPRS network because all the equipment we purchased was EDGE-capable," he said. AT&T Wireless, which migrated its TDMA facilities to GSM/GPRS in a two-year project ending in June 2003 and launched EDGE nationally in mid-November 2003. This involved software upgrades at 25,300 sites from coast to coast, at a cost of around $325 million, or less than $2 per pop. (By contrast, Cingular began its move from TDMA to GSM about a year after AT&T Wireless did).

AT&T's EDGE service now covers about 7,500 cities and towns, and areas along 30,000 miles of U.S. highways, covering more than 220 million potential customers.

"In addition, the GSM technology gives us the ability to provide voice roaming in over 150 countries, and data roaming in 60 countries," he said. "And now that there are tri-band EDGE cards like the Sony Ericsson GC-83, customers can take advantage of EDGE in foreign countries that have launched this service."

Brian Rosenberg, senior vice-president and general manager of Ericsson's AT&T Wireless customer accounts, said 22% of the revenue AT&T Wireless derives from its B2B users comes from data services. He said the company has had particular success attracting corporate clients like real-estate giant ReMax (with 90,000 associates), Merrill Lynch, British Petroleum and the U.S. Securities and Exchange Commission.

In order to take advantage of the new service, AT&T Wireless is pushing products like the Sony Ericsson GC-83 EDGE card for laptops, which constitute the bulk of the market. The service costs $250 up front, plus $80 a month for unlimited data usage, including international roaming capability.

In addition to the two nationwide operators — Cingular and AT&T Wireless — 11 other operators are either in the process of deploying EDGE or plan to soon. These include T-Mobile USA (Bellevue, Wash.); Cellular One of Northeast Arizona (Show Low, Ariz.); Corr Wireless (Huntsville, Ala.); Dobson Communications (Oklahoma City, Okla.); Triton PCS (Berwyn, Pa.); Westlink (Ulysses, Kan.); Centennial Wireless (Fort Wayne, Ind.); Edge Wireless (Bend, Ore.); Viaero Wireless (Fort Morgan, Colo.); Western Wireless (Bellevue, Wash.) and Cincinnati Bell Wireless (Cincinnati, Ohio).

"EDGE is a logical and cost-effective way for wireless carriers to improve their user experience and capacity at the same time," said Roger Entner, a telecom industry analyst at Boston-based Yankee Group. "The cost of upgrading to EDGE is nominal. At the same time, data speeds increase three- and four-fold, and voice capacity gains really help carriers put more traffic over the same spectrum."

Ericsson's Shank describes EDGE as a change in modulation over the air from GMSK (which is what GPRS uses) to an 8PSK modulation scheme that opens up the bandwidth so that you go from GPRS, with 12 kilobits per timeslot, to EDGE, with 59 kilobits per timeslot. It's a four-fold gain in data capacity."

This means that three timeslots using GPRS would yield 36 kilobits of data, or 177 kilobits of data with EDGE.

"As long as GSM is around, EDGE will be there because it fills a niche in the U.S. market," said Shank. "We cannot deploy 3G everywhere because of spectrum issues. It'll be deployed in major urban environments where higher capacity is needed, and they'll put EDGE in the suburban and rural markets."

Asked if EDGE has any inherent disadvantages, Shank replied: "The only downside is if an operator decided that EDGE gives them all they need and don't see the necessity of moving to 3G technology. But major operators aren't going to have that problem. They'll always want to improve their networks."

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