Is there potential for evolved-EDGE networks?

Forget 4G or even 3G, ABI Research is predicting that an evolved version of 2G EDGE networks could be big if it fulfills its potential – but that is a big if. ABI said today in a research note that the “Evolved” enhancement of today’s widespread EDGE mobile networks (E-EDGE) could generate nearly $3.7 billion in capex for cellular base station upgrades in 2015, but that depends on operators and handset makers adopting the technology.

The problem is – it is not certain if they will adopt it. In fact, no E-EDGE networks exist today, even though they are spectrally efficient and include data features and faster speeds, ABI said. The required E-EDGE-enabled handsets are still just a rumor too.

It’s the classic chicken and egg problem, according to ABI Research analyst Xavier Ortiz. Handset vendors don’t want to make E-EDGE phones unless there’s a market for them, but operators don’t want to upgrade their EDGE networks unless there are handsets to use them. Research In Motion (RIM) is one handset maker that has been promoting the E-EDGE standard because, according to ABI, it sees the potential to bring mobile broadband to rural and suburban areas that aren’t well covered by 3G or 4G networks.

“RIM believes E-EDGE’s speed and efficiency will translate to a good user experience that won’t saturate network capacity,” Ortiz said in the report. RIM, however, still does not have an official E-EDGE handset.

With widely available 3G networks and a focus on migrating to 4G, E-EDGE hasn’t got much attention from anyone else in the market. ABI said the window of opportunity for it may be closing in regions with good broadband coverage, but that is not the case in much of the world.

“That’s why decisions by China Mobile and operators in India are crucial to the future of E-EDGE,” Ortiz said. “If they decide it’s worth adopting, E-EDGE will take off rapidly. The relative newness of those nations’ cellular infrastructure may work in E-EDGE’s favor, because while older GPRS/GSM base stations will require a hardware upgrade, more recently-built ones can be upgraded in software as part of regular maintenance.”

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