AT&T and Nokia hedge bets on EDGE

NEWS Having realised that 3G is much more of a future phenomenon than previously thought, Nokia and AT&T Wireless have turned to EDGE technology - a cheaper version of 3G - bringing into question the mobile industry's hopes for rolling out 3G networks by 2003. Both companies have completed the first live EDGE data call over a GSM network, using a prototype Nokia EDGE-enabled handset connected to a laptop, for web browsing and streaming. For EDGE to work consumers will need to buy EDGE-enabled handsets. Lars Godell, European telecoms analyst at Forrester, believes this sudden enthusiasm for EDGE means telcos have realised live 3G is further off than expected. Godell said: "It will be 2007 before the UMTS (3G) dream comes true, operators will not be able to justify an extensive roll-out for years, but EDGE is five times more expensive than GPRS in terms of network upgrade and I'm not sure users will replace handsets quickly enough to justify the introduction of the technology. "Although EDGE has lower upgrade costs as an extension of GSM, it faces the same revenue uncertainties as UMTS, which has no convincing volume projections, huge uncertainties about pricing models and serious doubts about consumers' willingness to pay." However, senior Ovum consultant Virtyt Koshi disagreed with Godell and said: "The cost of upgrading a network with EDGE is negligible compared to 3G. There will be no convergence with 3G, there'll be divergence with around six proprietary standards."