DENVER, United States-For mobile phone operators around the world, one key question remains unanswered: What will be the demand for mobile data services?
Mobile phone carriers today are attempting to answer this question as they consider what investments to make to transition to third-generation data-centric networks.
“The business model is still voice, with a need to offer data,” said Larry Swasey, vice president of the communications research practice with U.S.-based Allied Business Intelligence. “The question is: How much of your network do you dedicate to data?”
This question has taken a back seat in the wireless telecommunications arena to the political infighting over CDMA-based 3G standards.
Qualcomm and Ericsson ended their battle over CDMA patents in March, paving the way for carriers to iron out their differences over W-CDMA and cdma2000 technology and allowing the International Telecommunication Union (ITU) to proceed quickly with its 3G standards-setting process. The two companies have agreed to cross-license patents to all CDMA-based technologies.
The patent standstill did not threaten to slow down TDMA carriers’ migration to 3G systems, but the ability to move from GSM technology to W-CDMA technology in a timely manner was in question.
The path to data
TDMA and GSM carriers are currently formulating business plans and marketing strategies to determine how they will transition to more data-centric networks. Many operators in the coming months plan to transition from circuit-switched networks to a combination of circuit- and packet-based networks to protect their infrastructure investments.
Circuit-switched networks take away valuable radio channel capacity from voice services. With packet-based services, users can stay on the network longer without using valuable spectrum and will only be charged for what they use rather than the right to use the channel, said Swasey. Carriers can charge users by volume pricing, which allows carriers to meet the wireline data pricing paradigm, he said.
TDMA and GSM carriers have already agreed on GPRS (General Packet Radio Service) as the high-speed packet data architecture and EDGE as the next-generation technical standard to support high-speed data services. From there, TDMA carriers plan to migrate to wideband TDMA technology, while GSM operators will evolve to W-CDMA technology.
The European Telecommunications Standards Institute has agreed to these data standards as well. Vendors and carriers expect this solution will leverage tremendous economies of scale and attract application providers that were limited in the past because of the proprietary nature of platforms.
By the end of 1999, some GSM and TDMA operators may introduce services based on GPRS, an architecture that will efficiently transmit the most highly used applications such as e-mail services and some Internet access. The move into the GPRS architecture will require providers to bypass the voice switching network, resulting in necessary hardware and software changes in the network.
EDGE is the next evolution, allowing data speeds up to 384 kilobits per second.
The concern many operators have with the EDGE solution is that carriers will be required to clear about 2.5 megahertz of spectrum for their data-only service, meaning less spectrum is available for their proven money-maker-voice service.
The Universal Wireless Communications Consortium recently addressed this problem by introducing EDGE Compact, a solution that will allow carriers to deploy EDGE using 1 megahertz of spectrum. Though data throughput will be less than with EDGE Classic, carriers can migrate to EDGE Classic as needs require it, and any terminal developed will incorporate both EDGE standards. EDGE Compact will still support data rates up to 384 kbps and will interoperate on GSM and TDMA networks.
The question of voice
Carriers and manufacturers still have a lot of work to accomplish on the EDGE standard, including how TDMA and GSM carriers will merge on the voice side.
TDMA carriers carry voice services on 30 kilohertz channels as opposed to GSM’s 200 kilohertz channels, which the EDGE standard will also use. Vendors and carriers believe voice service will be delivered in the 2003 time frame over the packet network, a technology that is not optimized for voice services today. Vendors have yet to find solutions to voice-quality problems, which include echoes and delays.
“The technology is improving every day,” said William Wiberg, president of the Lucent’s AMPS/PCS wireless networks division. “The technology will be there. The nice thing about TDMA is that there is no need for voice over IP tomorrow.”
Carriers’ timelines for introducing more sophisticated data services are unknown. Many U.S. TDMA carriers plan EDGE trials around 2001, but investment will be commensurate with customer demand for wideband data services.
“We will match our investments with customer take-up,” said Rod Nelson, vice president and chief technology officer with AT&T Wireless. “We don’t have any additional spectrum to purchase. The financial advantage for EDGE is that investments are matched in subscriber take-up.”
Many analysts believe carriers will have to take a larger stake in the data market than they are willing to take today to drive the demand for data services. In the United States and other developed countries, cable modems and Asymmetrical Digital Subscriber Line (ADSL) technology threatens to deliver data services much faster than their mobile counterparts by 2000. In more underdeveloped countries, the lack of quality wireline infrastructure will give carriers advantages in rolling out data services before wireline operators improve the quality of their networks.
“There is an inherent value in mobile data,” said Swasey. “Carriers have to remember that the people who will be using this will be the high-end users-the ones that need to be catered to.”
