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Europe Gets an EDGE

TeliaSonera AB (Nasdaq: TLSN) plans to become the first European carrier to launch a commercial EDGE (Enhanced Data rates for GSM Evolution) network, with Finland’s capital city, Helsinki, primed for activation by the end of this year (see TeliaSonera Invests in EDGE).

An enhancement to the GSM and TDMA wireless communications systems, an EDGE software upgrade can increase data throughput to 384 kbit/s, employing the same network infrastructure and spectrum as current 2G technologies.

According to Pimo Timoahomaki, VP of product development at the carrier, the network is “up and running” at present but commercially unavailable due to a lack of EDGE-enabled handsets. “As soon as we have terminals ready we will go live. Nokia is saying Q4 for handset delivery, so we will hit the Christmas market at the latest.” (See Nokia Promises EDGEy 2003 and Nokia Gets EDGEy.)

The carrier’s infrastructure vendors -- Nokia and LM Ericsson (Nasdaq: ERICY) -- have completed the network upgrades throughout the country, although Timoahomaki is unable to confirm timescales for full nationwide coverage.

TeliaSonera’s moves follow recent statements from other European carriers expressing an interest in rolling out EDGE networks. In March O2 Ireland revealed it was considering a deployment of the technology (see Vendors Sharpen EDGE), and Telecom Italia Mobile SpA (Milan: TIM) today confirmed plans to launch EDGE services by summer next year.

“We will have services up and running in Italy’s main cities by the middle of 2004,” spokeswoman Roberta Vivenzio told Unstrung.

In light of recent expenditure on third-generation UMTS (Universal Mobile Telecommunications System) licenses, however, analysts remain unconvinced of the business case for deploying EDGE networks. “Do we really want to see another technology launched in Europe?” questions IDC senior analyst Paolo Pescatore. “Yes, it can provide an interim technology for UMTS, but its long-term potential remains unknown.”

The market for EDGE is certainly more defined in the Americas. Cingular Wireless became the first carrier in the U.S. to launch its EDGE network, in June (see Cingular EDGEs Out Rivals); and rival AT&T Wireless Services Inc. (NYSE: AWE) plans to have some EDGE markets up and running by the end of the year (see AT&T Firms Up 3G Plans). T-Mobile USA also has EDGE contracts with infrastructure vendors (see Nortel's $300M EDGE).

— Justin Springham, Senior Editor, Europe, Unstrung

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