European operators are expected to spend more than $125 billion by the beginning of 2007 on next- generation wireless Internet services and infrastructure, according to a report by The Strategis Group Europe.
The report, “European Next Generation Wireless: Licensing, Infrastructure and Development,” found that 30 of Europe’s wireless operators plan to install more than 720,000 base stations by 2007, triple the number of installed base stations by the end of this year.
“Making the next-generation wireless Internet vision a `here-today’ reality is a significant financial and logistical exercise for the operators,” said Jake Saunders, The Strategis Group’s european director. “If next-generation wireless Internet services are to live up to expectations, operators will need to install a dense array of standard, micro and pico base stations.”
Saunders noted that this was necessary because wireless Internet access speeds not only depend on how fast the end user is moving, but how far they are from the base station. In rural areas, existing GSM base station coverage stands at 20 kilometers to 35 kilometers, where as in high traffic areas, W-CDMA base-station coverage may come down to 1.2 kilometers or less.
“Cell-site management companies as well as private and public landlords are very definitely becoming the cellular network `gatekeepers,’ ” added Jamie Moss, telecommunications consultant at The Strategis Group.
The report also noted that operators may bypass the traditional model of implementing third-generation services by going from GPRS deployment scheduled for next year, with planned data rates of 171 kilobits per second, straight to W-CDMA deployment by 2003, and 2 megabits per second data rates. This plan would skip the deployment of EDGE services, with 384 kbps planned data rates, scheduled for 2002.
“Many operators feel that W-CDMA will allow them to upgrade straight from 2.5G services to 3G services singlehandedly,” Moss explained.
This would prove to be a blow to EDGE proponents, which have maintained that it’s an ideal transition between GPRS and W-CDMA, and comes at a time when U.S.-based TDMA and GSM carriers are also looking at skipping EDGE as they plan 3G deployment.
The report noted that one hindrance to the deployment of next- generation services is the fear of wireless operators that handset manufacturers will not have GPRS handsets ready for customers in time. Many handset manufacturers are also slowing the process by incorporating their own Web browsers into their models, which could lead to interoperability issues for consumers in the future.
“This will also lead to security issues due to the differences in Web browser, which later versions of WAP may have to compensate for,” noted Saunders.
Even with the uncertainty surrounding the deployment of 3G infrastructure in Europe, most operators are banking on a huge financial return once deployment begins. British Telecom recently said its pre-tax profits would increase by more than $70 million per year from a 10-year deal it recently announced with Crown Castle to build mobile-phone masts on the roofs and grounds of an initial 4,000 BT exchange sites.
“There are serious logistical, political, environmental and social ramifications of next-generation wireless services,” Saunders concluded. “These need to be handled adroitly by all parties involved if the next round of cellular services are going to be successful as GSM has become.”
