By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Cingular Wireless retailers will have some new phones and services to promote now that the carrier has unveiled its 3G-conversion timetable.
As part of the plan, Cingular will add GSM technology to its 850MHz TDMA networks to match the GSM technology in its 1.9GHz markets. The carrier will also add the GPRS and EDGE high-speed packet-data technologies to its GSM channels in both frequency bands. Cingular described GPRS as a 2.5G technology and EDGE as a 3G technology.
Atlanta-based Cingular, a joint venture between SBC Communications and BellSouth, is the nation's second-largest wireless-phone carrier with 21.3 million subscribers in all but about a dozen states.
Currently, Cingular operates 1.9GHz GSM networks in California, Washington state, Nevada, North and South Carolina, eastern Tennessee and coastal Georgia, representing 30 percent of the carrier's POPs (population in the markets covered by its networks). Cingular operates 850MHz TDMA networks in the rest of its markets.
In its GSM markets, GPRS service is available everywhere but California and coastal Georgia. There, GPRS "will be in play by year end, and shortly in New York City," where the company will begin sharing the use of Voicestream's GSM network, said Cingular CEO Stephen Carter during a press briefing in New York City.
GPRS, EDGE timetables: Cingular has already begun to convert its TDMA markets to GSM and GPRS, and by the end of 2002, the company will offer commercial GSM/GPRS service in 50 percent of its markets, a spokeswoman told TWICE. Sometime in 2003, "all major markets" will offer commercial GSM/GPRS service with the exception of "perhaps a market or two," said Carter during the briefing.
Although EDGE installations are already underway, commercial EDGE service won't be available until around mid-2002 in limited markets, the spokeswoman said, in part because of EDGE-handset availability.
For consumers, the transition to GSM in TDMA markets "will be transparent to the large majority of our customers," Carter said, because TDMA channels will coexist for years with GSM in those markets. "Since our customers upgrade their handsets about every two years, we expect an extremely smooth transition," he said.
The company has no target date for turning off 850MHz TDMA or analog channels and won't force TDMA and analog subscribers to convert, the spokeswoman later added.
Eventually, Cingular would like to offer W-CDMA 3G service, Carter said. "W-CDMA is certainly a vision we'd like to have for our long-term future," but that technology "needs more spectrum [to implement]," he explained. "We can't plan out [W-CDMA] unless we have more spectrum, or new developments [occur] in spectrum efficiency."
Future GSM-capacity improvements and EDGE adoption could postpone Cingular's need for additional spectrum for five years "with conservative take rates," another official said.
EDGE vs. CDMA 1X: In fact, said chief technology officer William Clift, Cingular's national GSM network will be "very competitive with CDMA 1X [3G] networks in voice capacity," thanks to such advances as adaptive multirate vocoders and frequency-hopping technology.
EDGE also competes favorably with the data rates of other 3G technologies, he added. "On loaded networks, the [data] speeds are compelling and compare very well with other 3G technologies," he said. EDGE will deliver peak data rates of 470kbps with expectations of real-world performance exceeding ISDN [128kbps].
Always-in packet-data services reduce the drain on batteries compared to lower speed circuit-switched dial-up data services. Packet service also lets consumers switch between a voice call and data session without ending a voice call.
In addition, Carter said, EDGE data rates will support "compelling" consumer applications such as online gaming and streaming full-motion video. GPRS and EDGE implementation will also cause a "huge shift" in Cingular's focus toward the enterprise market "because we now can work with enterprises in a way we haven't before," he said. "Three to four years ago, we'd just go in to sell 1,000 phones. Now we can send in a solutions salesman."
In Seattle, for example, a GPRS e-mail service launched in October lets a phone share a subscriber's Microsoft Exchange corporate e-mail address.
Despite the advantages of GPRS and EDGE, Carter acknowledged that "we don't expect a queue around the corner on Day One." Nonetheless, adoption will grow "over the coming years" as word of mouth grows.
Why change? Cingular could have chosen to add GPRS and EDGE to its 850 MHz TDMA networks, but the company decided to gradually convert its TDMA cellular network to GSM for several reasons, Carter said. They include the recent availability of 850MHz GSM infrastructure and GSM's worldwide popularity, which creates economies of scale that drive down the costs of GSM infrastructure and handsets. "There are over one-half billion GSM phones in use worldwide," he said. The economies of scale for handsets and network infrastructure are "beyond comparison." For Cingular, economies of scale translates into a $15-$25 savings per handset, multiplied by millions of handsets, compared to 3G phones that use CDMA 1XRTT technology, Clift said.
Another benefit is the low cost of upgrading a GPRS network to EDGE, Clift said. Adding EDGE to a GPRS network requires only a software upgrade, he explained. All told, the conversion costs will run close to $3 billion, Clift said.
Handset rollout: In the interim, Cingular will offer dual-technology, dual-band handsets beginning in March to knit together its GSM and TDMA markets. Later, the carrier will "migrate to dual-band [850MHz/ 1.9GHz] GSM as our primary phone," Clift said. The first dual-band phones might be available through Cingular as soon the second half of 2002, when Nokia said it would deliver its first GSM-only 850MHz/ 1.9GHz phone. It will also incorporate GPRS, a Nokia spokesman said.
The first Nokia EDGE phones will also be available in the second half of 2002, Nokia's spokesman added.
For roaming between EDGE and GPRS markets, GPRS handsets can be used in EDGE markets, and EDGE handsets will operate in GPRS markets.
Cingular's first dual-technology dual-band phone, due in March, will operate in TDMA mode at 850MHz and in TDMA and GSM modes at 1.9GHz. Carter didn't say whether it will incorporate GPRS. In July, Cingular will begin selling models that add 850MHz GSM operation. With these phones, digital-network features will follow consumers as they move between Cingular's GSM and TDMA networks.
Siemens and Ericsson will join Nokia in supplying dual-technology TDMA/ GSM handsets as well as GPRS and EDGE infrastructure, Cingular said. Those companies and others will also supply dual-band GSM handsets.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.