RIM CEO: We’re spooked about EDGE economics

TORONTO – Rogers Wireless Inc. claims its national network now provides third-generation (3G) services, but the chief executive of a major device manufacturer warns it will be difficult for carriers to make money on the technology.


Balsillie, chairman and chief executive officer of Research in Motion (RIM) Ltd., said upgrading a cellular network to support Enhanced Data rates for general packet radio services Evolution (EDGE) is very expensive and is difficult to install properly.

“”We’re spooked on the economics and physics”” of EDGE, Balsillie said during a keynote address Wednesday at the Wireless & Mobile WorldExpo, held at the National Trade Centre. “”This stuff is very technically complex and capital-intensive.””

Waterloo, Ont.-based RIM manufactures the BlackBerry e-mail handheld devices, which work on the Rogers network, which provides general packet radio services (GPRS) throughout its coverage area. RIM has not announced its EDGE strategy yet.

Rogers Wireless announced Tuesday the national rollout of its EDGE network and the availability of Sony Ericsson EDGE PC cards, which can provide data transfer rates of up to 200 kilobits per second (Kbps).

EDGE is one of the 3G wireless technologies available to carriers. Five years ago, industry experts generally agreed 3G services offering data transfer rates of 384 Kbps to pedestrians would be available in North American by 2003.

Dimitri Paulyn, an enterprise account manager for Rogers Wireless Inc., said in an interview Rogers does not guarantee a given data transfer rate to devices with EDGE cards because the actual download speed depends on several factors, including the user’s distance from the cell tower.

Paulyn added EDGE will generally give users about three times the speeds provided by GPRS service, which is comparable to dial-up Internet service.

Balsillie said it’s “”really nice”” to get increase the speed by a factor of three, adding 3G technologies like EDGE will give enterprises the bandwidth they need for the next two years for most mobile applications.

But Balsillie added 3G deployment has not evolved as originally foreseen. He noted vendors were predicting in 1998 that 3G would be deployed by September, 1999.

Although some mobile workers check their e-mail and surf the Web at wireless hot spots using Wi-Fi 802.11 cards on their notebook computers and handheld devices, Balsillie does not believe Wi-Fi will provide serious competition to carriers’ 3G service because Wi-Fi does not provide service over a wide area.

Mark Whitton, Nortel Networks Corp.’s general manager of wireless local-area network solutions, agreed.

“”There’s going to be some degree of cannibalization,”” Whitton said. “”How much? There’s a wide variety of opinions on that.””

During a separate presentation, Whitton said Wi-Fi networks covering several city blocks have interference problems and technologies like IEEE 802.16 Wi-Max (a yet-to-be-ratified standard designed to provide 56 Megabits per second over 50 km) or 3G are more suited for mobile users.

Notebook PCs, personal digital assistants and cell phones will eventually be sold with 802.16 cards, said Patrick Leary assistant vice-president of Tel Aviv-based Alvarion Ltd., a fixed wireless equipment manufacturer.

But he warned the bandwidth and distances quoted often refer to point-to-multi-point installations, rather than point-to-point.

“”You’ve all heard 70 Megabits per second over 30 miles,”” he said. “”That’s horse manure.””

Wireless & Mobile WorldExpo, which continues Thursday, included some heated discussion about the merits of handheld devices that perform include several functions, such as voice, Internet access, PDA functionality and music.

In response to an audience member’s question about incorporating global positioning system (GPS) technology into BlackBerry devices, Balsillie said he is generally in favour of having different devices for different functions, rather than an all-in-one handheld.

“”It’s like asking for a school bus and a sports car”” in one vehicle, he quipped.

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