The latest sign of trouble with the technology surfaced this week when wireless equipment maker Sierra Wireless put on hold a shipment of GPRS laptop modem cards to. Sierra Wireless Chief Executive David Sutcliffe said he knows of no reason why the card, which has been certified for use by a Canadian AT&T Wireless subsidiary, isn't passing muster. An AT&T Wireless representative has declined comment.
The development has helped conjure up more speculation that carriers using GPRS--such as VoiceStream Wireless, AT&T Wireless and--are having problems with their plans to crisscross the nation's biggest cities with these networks. All three carriers deny there are any major technological problems like those that European carriers had two years ago while building their GPRS networks--problems that have left many in near financial ruin.
But many industry insiders say otherwise. "GPRS should have been low-hanging fruit," said John Diehl, president and chief executive of PrairieComm, which makes cell phone chips. "But there's been a lot of stumbling."
"GPRS phone rollouts haven't been as successful," said Research in Motion Chief Financial Officer Dennis Kavelman. RIM is selling a GPRS version of its popular BlackBerry pager in Europe and the United States. "GPRS is incredibly complex. There have been delays all across the board," he said.
Openwave Systems Chief Financial Officer Alan Black started the year thinking it would be a busy one for GPRS. He was expecting 250 wireless carriers worldwide building wall-to-wall GPRS networks in their coverage areas. But now he thinks the number of GPRS networks completed in 2002 will be less than 100.
"Operators are investing in GPRS on a slower pace than once thought," Black said.
Sutcliffe believes U.S. carriers have set more realistic expectations. "I don't sense momentum has decreased, just that people's expectations are getting more realistic," he said.
Oh gee, here comes 2.5G
GPRS is the data delivery arm of cellular telephone networks using the Global System for Mobile Communications (GSM) standard, which is at the core of between 70 and 80 percent of the world's telephone networks. GPRS is supposed to provide Web download speeds slightly faster than those from a typical dial-up Internet connection like AOL.
Wireless carriers choosing GSM have little--if any--alternative than to use GPRS if they want to evolve to the much-hyped third-generation (3G) networks promising wireless download speeds of at least 144kbps, according to Kim Thompson, a spokeswoman for VoiceStream Wireless.
Most major U.S. carriers plan to build these 3G telephone networks. Verizon Wireless has already launched one; Sprint PCS will launch its network in July or August.
GPRS was first deployed throughout Europe two years ago, but with disastrous results.
The hope was the download speeds of GPRS would make it palatable for a European cell phone owner already sending billions of wireless messages a month to do even more complex and expensive things like swapping picture messages or downloading songs.
But carriers overpaid for government spectrum licenses, waited years for handsets from vendors, then built bug-filled networks using the generally untested first generation of GPRS phones and network equipment.
The industry was having problems meeting the hype over the networks' download abilities, for example. European carriers were expecting to offer services based on download speeds averaging upwards of 60kbps. Instead, they could only produce 20kbps, said David Kerr, vice president of wireless practice at Strategy Analytics, a consulting firm.
Nokia, Siemens and Ericsson disappointed most European carriers by repeatedly missing GPRS handset delivery deadlines. And those handsets that made it to market were buggy. One Nokia GPRS phone had a faulty screen, which faded to black with time. The GPRS networks also had trouble when someone was simultaneously moving and using the phone. The call or Web session was interrupted because base stations couldn't hand off the call, Kerr said.
The networks also had trouble when someone was moving and using the phone at the same time. The call or Web session was interrupted because base stations couldn't hand off the call, Kerr said.
The result was European consumer apathy--something carriers in Europe didn't count on. In April, Europe's biggest mobile phone seller, Carphone Warehouse, said stores were selling about 35,000 GPRS handsets a month. But only 200 subscribers were signing up every month for GPRS wireless Internet service via Carphone Warehouse.
Network and phone problems persist in Europe. For example, calls are often dropped when someone roams from one cellular site to another, according to sources. Also, some of the Nokia GPRS phones that were part of a batch with faulty screens shipped in 2001 continue to surface in the United States and other countries, according to Nokia spokesman Keith Nowak.
The company is no longer using the supplier of the faulty screens, Nowak said. "The problem has been contained."
GPRS: Hello United States
Now it's the U.S. GSM carrier's turn to deal with GPRS. AT&T Wireless has the most aggressive schedule for it, intending to create a nationwide GPRS network by year's end. The company is about 60 percent done. It's already launched services on using the network, offering a of the wildly popular I-mode wireless Web service of NTT DoCoMo in Japan. NTT DoCoMo owns about 16 percent of AT&T Wireless.
But BMO Nesbitt Burns analyst Ray Sharma said AT&T Wireless' GPRS network is plagued by problems, mainly the lack of ability of different types of GPRS software to work together. It's led to delays in carriers certifying the product for use, Sharma writes.
Cingular Wireless intends to have most of the country covered by 2003 as well. It currently offers GPRS service in about two-dozens cities, but the network isn't breaking down any speed barriers. In fact, Cingular is capping the amount of bandwidth on their networks for data to travel over, saving most of it for voice calls.
Most carriers have similar network clampdowns on data, preferring to keep the bandwidth available for cellular calls. But that means the chances of getting a data connection are very low during peak calling times. If there are a lot of users, the bandwidth will slow to a crawl.
The result, says Brian Modoff, a telecom analyst with Deutsche Bank Securities in San Francisco, is not too encouraging. He bought a Motorola V60 GPRS phone from a Cingular store and began surfing away. It took less than five seconds to connect to the network and each Web page download took between three and six seconds--much faster than the networks of old, he wrote.
"But then 5 p.m. in downtown San Francisco hit," he wrote. "After repeated attempts at trying to connect to the network, we gave up and put our phone away for the evening."
VoiceStream's Thompson said VoiceStream Wireless has finished its GPRS network, and now offers it in 6,500 cities in the United States.
Like Cingular Wireless, VoiceStream is also treating data as a relatively second-class citizen. Voice calls will get priority over wireless Web sessions during busy network times, Thompson said.