Bell Mobility will spend $160 million on Nortel Networks equipment to deploy a network executives said would boost performance for multimedia applications.
Wednesday said the deal would include its CDMA2000 1X and 1xEV-DO (evolution data optimized) wireless hardware and software, which will allow download speeds of 2.4 Mbps and average speeds of 300 to 500 Kbps, or six times as fast as its current network. Bell first announced its EV-DO pilots late last year in Toronto, and is expected to continue implementation throughout next year.
EV-DO has already been rolled out by Verizon and Sprint in the U.S. Nortel already owns a big chunk of this market, with its equipment in 12 of the estimated 19 EV-DO networks around the world, according to its vice-president of global CDMA marketing Steve Searles.
Besides the enhanced speed, Searles said EV-DO is more “spectrally efficient” in that it allows companies such as Bell to lower the cost of delivering services over the airwaves on a per-bit basis.
“That translates into dollars for the operator,” said Searles, adding that it eases the introduction of multimedia applications. “It’s similar to wireline – certain things just aren’t practical over dialup but became more reasonable over DSL, and even more reasonable over cable.”
Less than a year ago, Bell Mobility president Michael Neuman indicated little interest in EV-DO, suggesting the company’s 1X network was enough for most of its customers. Almis Ledas, Bell Mobility’s vice-president of corporate development, said the biggest challenge right now is a lack of EV-DO enabled devices in the Canadian market, but the company sees increased network speed as critical for next-generation application performance.
“The early examples of that are the downloading of attachments from a BlackBerry and opening Web sites tailored to a wireless environment on a BlackBerry,” he said, adding that as screen sizes on handsets are getting bigger, users are being encouraged to download larger image and music files.
Searles said carriers typically introduce EV-DO services at the enterprise level, with specific applications, or at the consumer market through multimedia-enabled EV-DO phones, which he said have become popular in Asia. Ledas wouldn’t comment on how services will be introduced.
“There are a number of factors. Sometimes the availability of devices dictates what market you go after first,” he said. “If you go very early, as Verizon did, the only device is EV-DO AirCards.”
For a longtime Nortel customer like Bell Mobility, which already uses its 1X products, upgrading to EV-DO simply means assigning a blade to the bay stations and changing some software, Searles said, though he admitted there could be some implications for the carrier’s billing systems.
“The marketplace has had to catch up,” he said. “They needed to be confident there was enough demand for these types of services.”
Ledas said the initial pilots in Toronto have gone well, and Bell Mobility is planning on a set of stepped-up trials by the end of this year. Bell is still expecting to wait a while before its EV-DO investments pay off, he added.
“The real applications and devices that we expect to unlock those applications aren’t going to come on the market until early next year,” he said.
Bell Mobility has said data accounts for more than half of its 2004 wireless average revenue per user (ARPU) growth.