Peoples Telephone will launch an alternative to third-generation (3G) networks called enhanced data rate for global evolution (Edge) in the fourth quarter, although service speeds are expected to be less than half the promised rate. Peoples chief executive Charles Henshaw said the company was also considering partnering with another alternative to 3G, PCCW's Wi-Fi hot spots, to offer greater value to its customers. But he said there was no Wi-Fi to Edge network-roaming solution yet. The company will start trials of Edge, a higher-speed mobile network than general packet radio service (GPRS), in the third quarter. It will roll out new services such as Java games and video downloads in the fourth quarter. 'In theory, Edge is supposed to deliver at speeds of up to 384 kilobits per second,' Mr Henshaw said. 'In reality, it will probably be between 100Kbps to 120Kbps.' Present GPRS networks in Hong Kong deliver speeds of 30Kbps to 40Kbps, compared with initially promised speeds of more than 100Kbps. Analysts have cautioned that so-called higher-speed networks like 3G and Edge will also not deliver to 'textbook' speeds. Rosalie Nelson, research director at the British-based telecommunications research firm Ovum, said promised speeds were unattainable 'unless you are standing right next to a base station with no one else on the network at the time'. Third-generation networks are expected to connect at about 150Kbps in reality. 'Edge is slower [than 3G] but I think the speed is perfectly acceptable and certainly offers an improved experience over GPRS,' Mr Henshaw said. Edge, which uses existing radio bands, is an enhancement on Peoples' 2.5G network and will cost a fraction of 3G investments at just 'tens of millions of [Hong Kong] dollars', according to Mr Henshaw. 'I think a lot of people are beginning to feel that 3G licences might have been issued perhaps a bit prematurely and Edge was too quickly glossed over.' He expects his company's share of revenue from data to rise to about 7 per cent next year from about 5 per cent. But he said demand for GPRS services remained soft. Ms Nelson said interest in Edge and other relatively inexpensive 3G-alternatives was mounting in the Asia-Pacific region. 'I believe Edge will receive a big publicity push in Asia this year as a 3G alternative,' she said. 'Asian operators do not face the same cost and regulatory strictures on the type of 3G technology and rollout timetable faced in Europe. Many have a choice of 3G technology and many have an open timeframe for using their 3G spectrum.' She pointed to the success in South Korea and Japan of CDMA2000, which, like Edge, was promoted as a low-cost alternative to wideband code division multiple access (WCDMA). Few of the world's major carriers have chosen to implement Edge, also known as the poor man's 3G network, preferring to jump straight into 3G due to the high investments made in 3G spectrum. 'Edge will be used by operators in advanced markets without a 3G licence or where no 3G spectrum has been allocated,' Ms Nelson said. Peoples is the only company in the Asia-Pacific region to announce Edge plans, although Optus, in Australia, is reviewing the technology. 'There is interest in Edge from some operators in the Philippines, Thailand, Malaysia and Hong Kong,' said Gartner Group analyst Foong King-yew, who is based in Singapore. 'Cellular operators in Singapore appear to have dropped Edge from their plans as the regulator is sticking to the end-2004 nationwide rollout for WCDMA.' More than 10 carriers are conducting Edge trials in Europe, according to Edge equipment supplier Ericsson. Nokia is also reportedly conducting trials with more than 20 carriers in markets such as Brazil, Mexico and Argentina. The United States is the biggest Edge market so far, with smaller operators AT&T Wireless and Cingular launching Edge-enabled data services last year. There are only three Edge handsets, or one each so far from Motorola, Ericsson and Nokia. Gartner Group telecoms analyst Andrew Chetham said: 'I think the handset issue will be key to whether Edge gets passed over by the mobile-phone manufacturers. 'If it does, it might just become a bit of an orphan.' Ms Nelson described the question of Edge handsets as a 'chicken and egg situation'. 'Edge networks require new handsets that work across the range of GSM technologies - but that is costly if only a few adopt it,' she said. 'Vendors' energies have been tied up with getting 3G networks and handsets into production, and developing Edge for the US markets that operate on a different spectrum. 'The vendors are watching the operators for commitment to Edge before ramping up production, and the operators are watching the vendors and other operators to see if there are economies of scale.'