December 29, 2000, 12:07 PM — AT&T Wireless has set the stage for third-generation (3G) high-speed wireless data, but the accompanying script is not without risk.
After announcing late last month that NTT DoCoMo is taking a 16% stake in the company, AT&T Wireless also revealed plans to update its Time Division Multiple Access network.
Early next year the service provider will deploy Global Systems for Mobile communications (GSM) gear over its TDMA network. The GSM overlay will also include general packet radio service enhancements that can support wireless data transmissions at up to 144K bit/sec.
Starting in late 2001, AT&T intends to upgrade its network again with Enhanced Data rates for Global Evolution-compliant gear that will boost the data transmission rates up to 384K bit/sec before its inevitable step to 3G.
In 2002, another upgrade based on the Universal Mobile Telecommunications System (UMTS) specification will let the service provider support up to 3G data speeds at 2M bit/sec. UMTS is also sometimes referred to as Wideband Code Division Multiple Access.
The company's plan seems cumbersome, going through at least four upgrades to reach 3G compliance, but each step offers incremental improvement.
"The plan raises questions about additional costs and frequency planning," says Elliot Hamilton, senior vice president at Strategis Group. With multiple standards and technologies that the firm is proposing, users will need trimode handsets, he says. AT&T is expected to invest millions in new equipment and spectrum.
AT&T plans to deploy equipment from Nokia, Ericsson, Nortel Networks and Lucent that supports up to three modes of wireless traffic.
Last week, the Federal Communications Commission revealed the names of 87 service providers that plan to bid on the personal communications services (PCS) C-block re-auction this week. Most of these licenses were returned because of nonpayment. AT&T Wireless has deposited the largest cash reserve of $151 million to bid for C-block licenses. The company is looking to beef up cities where it only has 5 MHz or 10 MHz worth of spectrum, says Bob Egan, research director at Gartner Group.
"This is the most credible story to come out of AT&T Wireless in five years," Egan says. "It's about time [CEO] John Zeglis bellied up to the bar and said what to do with this company."
For years AT&T Wireless has been under scrutiny because its network was running out of space in major markets. Some of the problems had to do with spectrum allocation and how the network was being managed, but lately the company has gotten past those issues. Many saw the TDMA network as a cross AT&T Wireless must bear, but the company's new plan lifts that burden.
However, Zeglis claims the TDMA network is not being replaced, but upgraded to support 3G specifications.