12 Feb.2002
Until recently EDGE was not really an option for operators looking to upgrade their networks for the next generation of services. But now that US carriers have put it back on their migration path, European operators may need to think again. Is EDGE really a cheap and easy way to improve ARPU while UMTS deployment is delayed?
Only two years ago, everyone in the telecoms sector was promising a new and improved world filled with 3G technologies and applications.
This promise looked not like a flight of fancy but rather like the cellular market's answer to the slumping internet market. Back then the European operators were willing to pay billions of dollars on spectrum licenses while network and terminal equipment vendors were happily investing the majority of their R&D resources on developing products and finding answers to address emerging 3G standards.
Today the picture has changed dramatically. Almost every week we are bombarded by debt revelations, vendor lay-offs, earnings warnings and other grim news. The global slowdown in the telecoms and cellular sector is evident. Now operators are struggling with constantly slipping ARPU while network vendors are fighting for markets that have not surged as was previously expected while facing increasing pressures to reduce costs.
Operators and vendors
Lately, more and more voices in the market have come forward doubting the overall future of 3G. At the end of August, one of Germany's 3G licensees, MobilCom, reported that the conditions for a commercially successful start of UMTS would be difficult to fulfil and that the company is re-evaluating its UMTS license. Datamonitor telecoms analyst Nick Greenway wrote an article in August, Death Bell Tolls - 3G R.I.P? urging mobile operators to abandon their 3G plans. He proposed that license holders "give it (the license)) away now - because there's more sense in abandoning the market altogether than rolling out a service on top of giant sunk costs." Finally, at the end of last month the pan-European English language daily newspaper International Herald Tribune gave front page space to an article entitled, Europe's 3G Hopes Fade: Firms Put 3G Hopes on Hold.
But, even with all of this nay saying no one is totally writing off 3G.
All major forces shaping the market, including governments, operators and vendors, have long ago committed to 3G. This commitment remains - it is just the timeframe that is negotiable. 3G will become a reality. The questions are: when and how?
Today, for example, the economic worth of 3G is being proven in Japan.
This region is the catalyst for these services and applications and its young population has taken up the 3G banner with enthusiasm. The fast-growing Japanese market confirms that next generation services are emerging.
However, in Europe, these services will be delayed by several years and operators should reconsider their technological roadmaps accordingly.
The future of 3G lies in a combination of technology and financing. As we have seen, financing remains a large hurdle and is dependent upon the struggling financial and venture capital markets. Therefore the industry needs to take a fresh look at the various technologies that will phase us into 3G. The technology roadmap to 3G shows two different technologies: GSM, whose migration path includes GPRS/EDGE/UMTS and cdmaOne, whose path includes CDMA2000 1x and 1xEV-DO/1xEV-DV. Both technologies have a presence in North America.
In this region, the market is currently divided. Some carriers are joining the rest of the world with GSM-compatible technologies while others are opting to use CDMA-based technologies. The decision by the major TDMA operators in North America to take the GSM path to 3G is not only a sign of the technology's leadership but also represents strategic global thinking by the US operators to take advantage of the enormous presence of GSM/GPRS networks in the rest of the world for their future revenue growth. In a recent study by Allied Business Intelligence it was found that spending in the US on GSM-based 3G networks would far exceed that of CDMA-based networks.
When reviewing the GSM path to 3G, it is clear that GPRS is the most widely deployed packet data technology with more than 100 active networks worldwide. What is beyond GPRS is the next question that operators are pursuing. Here, EDGE is clearly the next stepping stone on the road to 3G.
EDGE or EGPRS (Enhanced GPRS) is an air interface enhancement for GPRS.
EDGE enables increased data transmission rates and spectrum efficiency to open up the possibilities for new applications and higher capacity for mobile use. EDGE is an add-on to the existing GPRS network and leverages on all the experience gained through the use of the existing GPRS standard to achieve significant technical improvements.
EDGE was overlooked for years by operators and vendors and was completely removed from their roadmap. The hype surrounding 3G and the huge investments related to its development and deployment made operators skeptical about the need for EDGE as an intermediate stage. But, by the end of last year, US operators made a clear strategic business decision regarding their future migration path. AT&T Wireless, Cingular and VoiceStream made their voices and reasoning known and announced they were adopting the GSM/GPRS/EDGE migration path - and thus EDGE returned to center stage.
Modulation scheme
The deployment of EDGE in North America is now planned for 2003. To ease the migration to EDGE all major US vendors are already developing EDGE-enabled base stations and terminals. As a result of this market decision, and in the light of major UMTS delays, there is growing interest from operators in Europe and Asia Pacific about EDGE. To promote and foster EDGE standards worldwide, the EDGE Operators Forum (EOF), an organization linked to the GSA, was formed in 2001. All major operators and vendors, with a notable presence from European and Asian operators, are involved.
The EOF's target is for the industry to avoid all the hurdles involved in GPRS deployment, such as lack of capable terminals, and interoperability problems.
Exploiting existing GPRS standards, EDGE attains significant technical enhancements. It introduces a new modulation technique termed 8-PSK above the existing GMSK used for GSM/GPRS. This modulation scheme triples the amount of bits per symbol while preserving the channel structure, channel coding and existing GPRS functionality to reach up to 473kbps. EDGE also initiates a new coding scheme that supports GMSK modulation and 8-PSK.
The enhanced scheme enables link adaptation to meet changing channel and network conditions and vastly improve performance.
For its Link Quality Control (LQC) technique, EDGE provides Incremental Redundancy to enrich EDGE channel performance. Incremental Redundancy uses different puncturing schemes to retransmit erroneous received blocks.
Here, the retransmitted blocks are soft-combined in the receiver with previously received blocks, to attain a vastly superior probability of decoding the information.
Another benefit for all vendors, whether of terminals or infrastructure, is that no wholesale changes to their existing GSM/GPRS equipment are required. Terminal vendors migrating to EDGE only need to upgrade their RF and baseband solutions to support EDGE. The key for upgrading the RF part is to provide low-cost linear power amplifiers to enable the linear coding scheme. These uplink EDGE-enabled RF solutions are currently at the end of their development cycle and will be available soon. For the baseband processing, it is vital to provide low MIPS and low power-consuming solutions for EDGE's high complexity equalisation and channel decoding; this task requires algorithmic optimization work. Terminals are scheduled to be available in 2003.
For base station providers, the vast majority of recently deployed GSM/GPRS base stations are EDGE hardware-ready and support EDGE-capable RF and DSP cores. Major vendors only need to add high complexity software to support EDGE equalisation and channel decoding; this is scheduled for deployment by the end of the year.
In light of the delays to UMTS deployment and the need to improve ARPU sooner rather than later, operators migrating to EDGE can bring the end user 3G services much quicker and can do so fairly inexpensively. EDGE can enhance the existing GSM networks adding capacity, throughput, spectrum efficiency and coverage. EDGE deployment requires no network forklift upgrade, no new cell deployment and no frequency planning. For recently deployed GSM/GPRS networks, in North America, Eastern Europe and China, EDGE only needs a software upgrade for base stations.
And when UMTS is finally deployed, EDGE will continue to be used as a complementary technology mainly in rural areas because of its ability to reduce deployment costs over large distances. A user equipped with a GSM/GPRS/EDGE/UMTS multimode terminal will be able to seamlessly use 3G for powerful data resources in urban areas and EDGE in less populated regions.
Clearly, EDGE has arrived. As North American operators begin deployment in the next 18 months, and as all the major vendors develop EDGE-capable base stations and terminals to meet demands, EDGE is truly here to mind the UMTS gap.
Doran Porat is the EDGE project manager at Comsys. He joined the company in 2001 bringing more than eight years of experience in both R&D and project management expertise.
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