GSM mobile firms seek an edge

Several of them have or are launching EDGE in India

The 3GSM Congress 2004 "� the biggest jamboree for the GSM camp which concluded at Cannes in France recently "� had one clear message for the mobile telephony market: Enhanced Data Rate for Global Evolution (EDGE) is the next big thing.

For GSM, the significance of the development lies in the technology's ability to carry data at much higher speeds, thus posing a challenge to CDMA's core strength. Observes Nikolaus Kremer, vice president (mobile networks) at Siemens Public Communication Network: "GSM and CDMA players try to outdo each other on various applications "� the next tug of war seems to be in data services."

To drive home the point, EDGE was launched in the US, a predominantly CDMA market, a year ago. The ripple-effect can be seen in India too. Thanks to the presence of major network providers like Siemens, Motorola and Ericsson in the country, several GSM cellular service companies are climbing the EDGE bandwagon.

For starters, Asim Ghosh, Hutchison Max Telecom's Mumbai-based managing director, is keen on enhance his network's data services. So Hutchison Essar will soon launch EDGE countrywide. The investment in the project for Mumbai alone will be around Rs 20 crores.

In Delhi, Idea Cellular also has said that it will upgrade its network. Bharti Tele-Ventures has even made test calls on the EDGE platform and the company is said to be reportedly in talks with Siemens for EDGE-enabling some of its circles. A Bharti source says that the company is looking at four metros in the country, including Delhi and Bangalore, to introduce EDGE.

It is not difficult to see why cellular networks are adopting EDGE though it does nothing to improve spectrum efficiency (cellular service providers cannot pack more voice-users into their existing spectrum). EDGE does offer a host of advantages. Data transfer, for one, at a turbo-charged speed. EDGE is said to have three times the speed of conventional systems.

Kremer claims that the top download speed could be as high as 400 kbps against the 140 kbps available now on general packet radio switching (GPRS) systems. Adds Fausto B Cardoso, former president and CEO of BPL Mobile: "EDGE will enable faster download of e-mail, allow video-streaming and bring about wider use of multimedia messaging services (MMS)."

But the CDMA camp is hardly impressed. Amit Khanna, Reliance Infocomm's spokesperson, claims that even CDMA can offer throughput as high as 300 kpbs. That brings it close to what EDGE offers. Besides, he believes that EDGE is not a 3G technology but only a 'stop gap' arrangement. He's right "� EDGE is 2.5 G technology, not 3G. "The EVDO (Evolution Data Only) service, to be soon launched on the CDMA platform, and currently being tested by Reliance, will offer 2 mbps transfer rate in the fixed mode and 384 kbps on the move," he notes.

In the mobility market, CDMA is acknowledged to be ahead of GSM in terms of data handling. So EDGE is meant to retain GSM's dominance in the world market. But data-based application in the Indian mobile telephony market has still not attained a critical mass to warrant an upgrade.

So what justifies the investment to address a small, elitist market? "Voice application was for a premium market a few years back. Today, it is a common man's need. In the process of technological evolution, data applications too would become available to the common man," argues Cardoso.

Even Manoj Kohli, president (mobility), Bharti Tele-Ventures, believes that EDGE is hot as far as global internet connectivity goes. "As the demand for higher bit rate services and guaranteed quality grows, EDGE will be the natural choice," he feels.

But does the new technology make sense for the end-user since the cost of an EDGE-enabled handset is a hefty Rs 30,000 to Rs 40,000? Cellular service companies expect the prices of handsets to plunge sooner than later "� to Rs 20,000 by May 2005 and further to Rs 10,000 to Rs 15,000 in the next two years. "It will follow the colour-screen handset market. Once the market acquires scale, mid-range handsets will be EDGE-enabled," says an industry observer.

Yet consumers may wait for 3G to arrive rather than invest in EDGE. But critics argue that 3G spectrum is already auctioned in most countries. It has not yet been very successful in Europe. "EDGE, however, is considered cost effective and has 3G traits. Speed of data transfer is one the essential elements on which EDGE will be sold," points out a cellular industry source.

According to Siemens' Kremer, close to 20 operators in Europe, south east Asia and the US have commercially migrated to EDGE. Roughly 15 to 20 per cent of cellular service companies across the world have already upgraded or announced their plans to upgrade to EDGE. In fact, EDGE votaries insist that investment in upgradation will also be nominal.

Till date, the combined investment in the back-end network for both the CDMA and GSM circles in the Indian mobile telephony market is said to be close to $1 billion. EDGE, per se, does not involve any huge additional investment. Industry sources believe that the investment in the overall infrastructure will be divided equally between GSM and CDMA. Of the estimated investment of $500 million in GSM networks, a 10 per cent provision has been made for EDGE migration or upgradation.

But eventually, whether it is EDGE or EVDO, the end-user is all set to experience some very interesting applications while on the move.