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Area of effect, commonly referred to as AoE, denotes the space which is altered by the use of an item or Ability.
For example, the Soldier Ability Shrapnel will damage all enemies within its AoE radius, while using an Area Healing Disc will heal all players in a given space. A player with training in Bio Body Armor will increase the regeneration rate of nearby players simply by wearing pieces of Bio Armor.
The Area of effect may be a radius surrounding the player, a cone in front of the player, a radius surrounding a targeted enemy or a zone defined by a targeted location, depending on the item or Ability used.
For more information see: Wikipedia:Area of effect