Industry News

U.S. Urges Europe Not To Impose A Digital-Wireless Standard

WASHINGTON, Wednesday, Dec. 23, 1998 -- The White House has asked the European Union not to adopt a technology standard backed by Telefon AB L.M. Ericsson of Sweden for the next generation of wireless telecommunications services.

In a letter, it urged the EU to follow the lead of a United Nations body, which essentially called for the market, not government, to choose the appropriate technology. The U.S. fears that the EU could lock competing U.S. technologies out of the European market.

While the U.S. wants to see multiple technologies compete in the market for these services, it also supports efforts to harmonize technological standards as much as possible, the letter said. It added that the administration would be "gravely concerned" if such efforts were blocked by European intervention.

Wireless services currently include mobile telephones, pagers and other devices. But the next generation of devices will be capable of transmitting data and e-mail from the Internet and provide other services, including video conferencing. Whereas second-generation mobile service providers compete almost exclusively on price, third-generation providers will duel by providing targeted value-added services.

Europe's industry became the front-runner in the second generation wireless market, chiefly because it set the Global System for Mobile Communication, or GSM, technology as the Europe-wide cellular standard. The prize in the third-generation battle is global hegemony, a single cellular standard that would allow companies to sell a phone in one country and let consumers use it in any other.

GSM helped make fortunes for manufacturers like Oy Nokia of Finland and Ericsson, which market equipment using the standard. But GSM networks are running out of room for new customers because the radio frequencies they're allowed to use are getting crowded. So they're looking for a new technology that would give them more space and added services.

North American, Republic of Korean and Australian players, led by Qualcomm Inc. (QCOM) of San Diego, back a standard known as CDMA2000, while European and Japanese concerns are pressing the International Telecommunication Union to adopt wideband CDMA (W-CDMA).

Each side in the CDMA battle has important assets. Qualcomm, which invented CDMA, claims it has exclusive rights to the CDMA technology. It wants W-CDMA's backers to revise W-CDMA so that it will also work with CDMA. If they don't, it warns it won't license them to use Qualcomm technologies it says are essential to W-CDMA. Ericsson has a huge CDMA market of GSM phones around the world and contends that W-CDMA doesn't rely on Qualcomm-patented technology.

Ericsson and Nokia support for W-CDMA because it makes it possible for GSM operators to upgrade to W-CDMA without replacing their entire network and also opens a new market in Japan to the Europeans. The companies spent last year lobbying for support from Asia's GSM operators, and early this year managed to convince Europe's telecommunications-standards body to accept W-CDMA and a second CDMA standard. Japan's standards body has submitted W-CDMA to the ITU for its endorsement next year as a global standard.

As supporters of rival W-CDMA and CDMA2000 clash over harmonization and intellectual patent rights, backers of another standard, Time Division Multiple Access (TDMA) hope to sneak across the finish line.

The ITU warned recently that if the two CDMA sides can't get together by Dec. 31, that body could exclude both W-CDMA and CDMA2000 from further consideration," leaving only TDMA-based standards in the running.

The White House letter is "an important demonstration of the administration's unwavering commitment to creating access to Europe's wireless market for all technology standards," said Gregory Williams, vice president of SBC Communications Inc.'s (SBC) Wireless Systems.

Williams is chairman of the Universal Wireless Communications Consortium, which represents major U.S. wireless providers including BellSouth Corp. (BLS), AT&T Corp. (T), Motorola Inc. (MOT) and Sun Microsystems Inc. (SUNW). Companies in a wireless consortium have invested $30 billion in TDMA technology world-wide, about $21 billion of which is in the U.S. That investment would be undercut if EU nations exclude the technology.

The third-generation market could be huge. In Europe alone, annual revenue from the sale of mobile multimedia services is projected to reach at least $27 billion by 2005, with about 32 million users of multimedia phones, according to UMTS Forum, a group of international phone operators backing the new services. Add demand from Japan and the U.S., and world-wide revenue could jump billions of dollars more.

By last year, Western Europe and Japan's digital-cellular markets had each grown to roughly $15 billion, 10 times the size of the U.S. market. By 1998, the markets in Europe and Japan are each expected to hit $28 billion, but the U.S. will still lag at about $9 billion, according to the European arm of San Jose, Calif.-based market-research firm Dataquest.

This year, West European manufacturers will sell about 17.8 million digital cellphones, compared with 6.2 million sold by U.S. makers, according to Dataquest. Billions of dollars in future revenue ride on the final choice of a standard, which could be made as early as January.

Vendor News

Motorola First to Offer Cellular Operators Suite of Digital Call Quality Software Features; CDMA Customers Will Realize the Benefits of Enhanced Network Performance

ARLINGTON HEIGHTS, Ill, Dec. 21, 1998 -- Motorola, Inc.'s Network Solutions Sector (NSS) announced today that it is the first cellular equipment manufacturer to offer a full complement of CDMA call quality enhancement features in one software release. Through this "one-stop-shopping" product offering, operators will be able to enhance the quality of their CDMA (Code Division Multiple Access) networks without incurring the cost of additional hardware.

Motorola NSS has successfully completed operator trials with the call quality software in several U.S. markets at both 800 MHz and 1900 MHz radio frequencies. During the trials, the enhanced software improved network performance significantly by exceeding the industry benchmark of two percent dropped call rates. Commercial release of the software suite is targeted for the first quarter of 1999.

The new software is designed to increase the quality of "soft handoff" procedures and reduce the time required for the cellular network to set up a call. Soft handoff is a method of call processing which provides uninterrupted voice transmission while a caller travels from one cell to another. Calls are handled in tandem by both the current and target cells until the handoff process has been completed -- virtually undetectable to the individual. With Motorola NSS' call quality software, operators and their customers will experience fewer dropped calls and better network availability.

According to Moe Grzelakowski, vice president and general manager, Motorola NSS' Cellular Systems Group, "We believe it's important to provide operators with cutting-edge solutions -- such as this suite of CDMA software -- that will not only provide added-value for their customers, but also will reduce operators' cost of network ownership. So far, we're very pleased with the operator feedback we've received from our U.S. market trials."

In a recent report by the Cahners In-Stat Group, a leading wireless industry research and consulting firm, Motorola NSS was cited as the leading international provider of commercial CDMA digital cellular networks. The analysis of cellular, PCS and wireless local loop markets shows Motorola NSS with a total of 31 commercial system awards internationally. Others include Lucent with 17 awards; Qualcomm, 16; Nortel, 10; and Samsung, four.

Samsung Electronics and Hutchison Telecom Australia Sign Contract for CDMA Systems

• Samsung recognized for its outstanding track record, technological strength and project execution capability.
• Hutchison Telecom Australia signs US$210 million supply contract for full CDMA system.

Seoul, South Korea, Dec. 18, 1998 -- Samsung Electronics Co., Ltd., officially announced that Samsung Electronics and Hutchison Telecom Australia have concluded a major deal for the delivery and installation of a CDMA Wireless communications system.

Samsung Electronics and Hutchison Telecom Australia Ltd. have concluded a major deal for the delivery and installation of a CDMA wireless communications system. The approximately US$210 million contract was signed between Samsung Electronics Overseas Business Division Vice President Taek Hee Kim and the Hutchison Telecom Group Managing Director Khoo Chek Ngee at Hutchison Telecom's head office in Hong Kong on 12 December 1998. Construction of the system will be completed by March 2000, in time for the Sydney Summer Olympics, giving Samsung a chance to show off its technological prowess to the entire world.

Samsung Electronics won out in an international tender held by Hutchison Telecom Australia to supply the full CDMA cellular communications system in Sydney and Melbourne, Australia. Samsung will also supply handsets and provide ongoing technical and maintenance support and additional equipment to expand the system for an eight year period following installation of the initial network.

Samsung Electronics has been selected to be the Olympic Partner in the Wireless Equipment category for the 2000 Sydney Olympic Games. Samsung's supply of the CDMA system as well as 70,000 handsets will provide an opportunity to show off its technological sophistication.

This contract with Hutchison Telecom also represents the first and largest single export of CDMA systems to an advanced market, and it will strengthen Samsung's status worldwide. Samsung's officials expect that it will pave the way for greater inroads into the growing American, China, Southeast Asia and Pacific Rim markets for CDMA systems.

Barry Roberts-Thompson, Managing Director of Hutchison Telecom Australia, confirmed the selection of Samsung as the supplier for the CDMA network in Sydney and Melbourne. Mr. Roberts-Thompson said of the decision today:

"The agreement with Samsung Electronics is a fantastic milestone in the development of Hutchison Telecom Australia's business. We already have more than 300,000 paging, cellular re-sale, Internet and wireless customers in Australia. The investment in our own CDMA infrastructure will provide the vehicle to further expand our customer base and provide new unique products and services in the wireless areas.

We are fortunate to have signed Samsung as our technology partner. Samsung's credentials in CDMA infrastructure provision are impressive with involvement in four Korean networks supporting over 10 million CDMA subscribers. Samsung is regarded as a world leader in this technology and we will be using their expertise and project development capability to compete in the highly competitive environment in Australia."

Microwave Power Devices, Inc. Awarded an Estimated $39 Million Consignment Order with Lucent Technologies

Largest Wireless Order in Company History Adds an Estimated $36 Million of New Consignment Business

HAUPPAUGE, N.Y., Dec. 15, 1998 -- Microwave Power Devices, Inc. today announced that the Company has been awarded an estimated $39 million consignment order to supply highly linear, single channel, cellular CDMA amplifiers to Lucent Technologies. These amplifiers are predominantly for international use in Lucent's cellular CDMA wireless telecommunications base stations. Deliveries have already begun under this consignment order, multi-year shipments are expected and billings are made only upon production consumption.

Edward J. Shubel, President and Chief Executive Officer, commented, "We are gratified and justifiably proud that our dedication and efforts toward the development of this amplifier have resulted in the largest order in our 31-year history. Under this consignment order, MPDI becomes a stocking supplier to Lucent. By combining MPDI's high volume amplifier expertise with our reputation for quality, reliability and efficiency, we will continue to meet the demand for wireless amplifiers from telecommunication OEMs and service providers throughout the world."

With the receipt of this consignment order, Microwave Power Devices' backlog totals approximately $128 million, a record level for the Company. Approximately 67% of this backlog is concentrated in commercial products which involves higher volume manufacturing under shorter term arrangements with customers. The remaining 33% of this backlog is concentrated in the Company's military segment which generally involves lower volume production under longer term projects. This dual design, development and production capability continues to be a competitive strength for MPDI.

Motorola CIG Wins $23 Million Contract to Upgrade M1'S CDMA System in Singapore

ARLINGTON HEIGHTS, Ill, Dec. 11, 1998 -- Motorola, Inc.'s Cellular Infrastructure Group (CIG) today announced that it has signed a contract worth $23 million to upgrade M1's PCS (Personal Communications Services) digital cellular telephone network in Singapore. CDMA is also known as cdmaOne™.

The upgrade is currently underway and is targeted to be completed by the end of this year. In addition to its SC™ 4852 base transceiver station, Motorola CIG will install two new base station types into M1's network, its SC 614T and SC 611. The new infrastructure embodies Motorola CIG's exclusive TrunkedPower™ technology which provides high transmit power while minimizing deployment costs.

Anders Gustafsson, general manager of Motorola CIG's Southeast Asia Cellular Infrastructure Group, said, "This network expansion further strengthens the historic relationship between Motorola CIG and M1. M1 contracted with Motorola CIG to supply the first PCS system outside the U.S. in 1996. M1 again established a first in the industry when it deployed Motorola CIG's self-contained CDMA microcellular and convection-cooled microcellular base stations. Since then, we have continued to worked closely with M1 to provide Singapore with the latest in digital technology."

Since its launch in June this year as M1 Chat, the service has been impressing customers with its excellent voice quality and very affordable tariff rates. "The new contract awarded to Motorola is part of a planned roll-out of additional investments to take advantage of the latest technology and to keep the network in tip-top condition. We want the system to continue to provide optimum service as more and more mobile phone users discover the benefits of using CDMA," said Neil Montefiore, M1's Chief Executive Officer.

M1 is a consortium comprised of the Keppel Group, Singapore Press Holdings, Cable & Wireless and Hongkong Telecom.

Motorola CIG deployed the world's first commercial CDMA system in 1995 in Hong Kong. Currently, the company has more than 100 agreements in 24 countries to provide commercial and trial cdmaOne equipment across the globe.

QUALCOMM Responds to Ericsson's Proposal for Harmonization

SAN DIEGO, Dec. 10, 1998 -- QUALCOMM announced today that it welcomes Ericsson's public support for the convergence of CDMA2000™and W-CDMA, the proposals based on Code Division Multiple Access (CDMA) for third-generation digital wireless technology. QUALCOMM invites Ericsson to join the Company and the majority of the world's wireless industry in convergence discussions taking place in the International Telecommunications Union (ITU) and in various standards organizations worldwide.

With such broad support, these discussions can lead to a converged CDMA third generation standard in a timely fashion. A worldwide CDMA standard meeting the following three fairness principles can provide greater services to all wireless customers and operators.

1. A single, converged CDMA standard should be selected for 3G; 2. The converged CDMA standard must accommodate equally the two dominant network standards in use today (IS-41 and GSM-MAP); and 3. Disputes on specific technological points should be resolved by selecting the proposal that either is demonstrably superior in terms of performance, features, or cost, or, in the case of alternatives with no demonstrable material difference, the choice that is most compatible with existing technology.

With respect to Ericsson's suggestion that a chip rate of 3.84 Megachips per second (Mcps) be selected for a converged CDMA standard, QUALCOMM reiterates that a third generation CDMA standard should be determined in accordance with the fairness principles. QUALCOMM is unaware of any analysis that suggests that 3.84 Mcps has demonstrable performance or cost advantage relative to 3.6864 Mcps, while the latter is evolutionary with an existing technology, cdmaOne™.

QUALCOMM Responds to Dataquest Market Study

SAN DIEGO, Dec. 10, 1998 -- QUALCOMM Incorporated today responded to a recently published industry report by market research firm, Dataquest. In its report, which focused on wireless phones sales for the first nine months of 1998, Dataquest recognized that the acceleration of the transition from analog to digital phones by wireless subscribers is now underway. Dataquest reported that there were 10.1 million digital phones of all technologies (CDMA, GSM, TDMA) sold in the United States, versus 7.9 million analog phones from January through September of 1998. QUALCOMM agrees with Dataquest's description of the general market trend.

Although QUALCOMM does not normally comment on information from third parties, the Company believes that Dataquest significantly underestimated the size and growth of the CDMA market, as well as QUALCOMM's shipment volumes and market share.

In the nine-month period from January through September of 1998, QUALCOMM sold approximately 1.8 million QUALCOMM-branded and QUALCOMM carrier co-branded CDMA digital handsets, produced at QPE, to wireless carriers in the United States. The Dataquest study indicated that QUALCOMM sold approximately 828,000 phones. While the Dataquest numbers represent sales to end-users, and not ex-factory shipments to carriers, QUALCOMM believes that a large percentage of phones have been sold through and that its market share is substantially higher than reported by Dataquest.

Except as noted above regarding general market trends, the size of the CDMA market and QUALCOMM's shipment volumes and market share, QUALCOMM makes no comments on any other element of the Dataquest report, including but not limited to numbers of digital and analog phones actually sold.

Mauritius Telecom Awards QUALCOMM Contract to Supply 50,000-Subscriber cdmaOne Wireless Local Loop Network

First cdmaOne Network in Mauritius Will Provide Wireless Telephone Service Nationwide

SAN DIEGO, Dec. 8, 1998 -- QUALCOMM Incorporated demonstrating its leadership position as the premier supplier of cdmaOne (™) Wireless Local Loop (WLL) networks worldwide, today announced a signed contract with Mauritius Telecom, an established wireline and mobile wireless service operator. Mauritius Telecom has contracted QUALCOMM to supply and install a cdmaOne (IS-95 Code Division Multiple Access) WLL network to initially add 50,000 subscribers nationwide to Mauritius Telecom's modern and 100 percent digital wireline network, which already supports 240,000 direct exchange lines.

"Mauritius, which has experienced phenomenal growth rates in telecommunications development in recent years, has the highest telephone penetration of any African state, with a teledensity of 22 phones per 100 people for fixed telephony. The introduction of cdmaOne fixed wireless service is indicative of Mauritius Telecom's continuing commitment to bringing the most advanced, reliable and cost-effective technologies to the county," said Megh Pillay, chief executive officer of Mauritius Telecom. "We selected QUALCOMM, the pioneer of CDMA, for this important project because of their proven cdmaOne WLL platform, their advanced products and services, and their ability to maximize the performance of CDMA technology -- providing customers with exceptional voice quality, dependable service and advanced features."

"As a gateway nation to both Africa and the Indian Ocean, QUALCOMM recognizes the strategic importance of our project in Mauritius, and we are proud to be participating in Mauritius Telecom's vision for telecommunications," said Marshall Towe, Jr., vice president of operations for QUALCOMM Wireless Systems. "We intend to establish a strategic presence and to train local professionals to support every aspect of the Mauritius Telecom project."

QUALCOMM will provide Mauritius Telecom with its 800 MHz Qcell (™) base stations, Qcore (™) switching and base station controller equipment, and wireless local loop telephones. The CDMA system will provide coverage to Mauritius' varied communities -- oceanside cities, towns in volcanic and mountainous terrain, and remote island populations -- complementing Mauritius Telecom's existing landline network. The system will be designed using QUALCOMM's industry-leading network planning software tool, QEDesign®. QUALCOMM will also provide a range of deployment services, including installation, commissioning and optimization. "Mauritius Telecom's selection of QUALCOMM CDMA wireless local loop technology puts them at the forefront of wireless communications in the region, offering their customers the most modern and cost-effective telephony services available," said Charles Oshunremi, regional vice president of Africa for QUALCOMM Wireless Systems. "We look forward to a successful lunch of this network in the first half of 1999, and to expanding our strategic relationship with Mauritius Telecom in the future."

QUALCOMM has emerged as the leader in cdmaOne WLL, with deployments underway throughout Asia, Africa, the Commonwealth of Independent States and the Americas. As the pioneer of CDMA technology, QUALCOMM designs and manufactures products that optimize cdmaOne technology to its greatest potential, providing high-performance networks to operators all over the world.

Sprint PCS Completes Launch of Digital Wireless Service On Motorola Networks in Seven Major Metropolitan Markets

ARLINGTON HEIGHTS, Ill Dec. 1, 1998 -- Sprint PCS Subscribers Will Benefit from Motorola's Industry-Leading CDMA Technology Motorola, Inc.'s Cellular Infrastructure Group (CIG) announced today that Sprint PCS has launched its 100 percent digital, 100 percent PCS service in several key markets as part of the expansion of its nationwide network. Seven of these new markets are using Motorola CIG's CDMA (Code Division Multiple Access) network equipment.

This newest Sprint PCS network expansion delivers CDMA digital call clarity and quality to customers in Cincinnati, Columbus, Chattanooga, Knoxville, Charlotte, Raleigh and Greensboro. Sprint Corporation acquired the PCS licenses for these markets in the Federal Communications Commission's D and E wireless frequency auction. Service in Charlotte will begin later this week. Motorola CIG, selected last year to provide more than 60 percent of the CDMA equipment for Sprint PCS' expansion, will supply the equipment for a total of 11 Sprint PCS D and E licensed markets.

"We are excited to add these important markets to our growing nationwide network," said Keith Paglusch, senior vice president of Technical Services and Network Operations for Sprint PCS. "We look forward to working with Motorola in these and other markets still to be launched."

"Because Motorola CIG's CDMA system is based on the IS-41 Rev C protocol, Sprint PCS customers will be able to roam throughout the company's entire multi-vendor network," said Woody Ritchey, vice president and general manager of Motorola CIG's Americas Cellular Infrastructure Group. "We are looking forward to enhancing our relationship with Sprint PCS as we work together toward further development of an open CDMA architecture."

Motorola CIG has supplied its SC™ 614T base station that provides high transmit output power while minimizing deployment costs for network operators.

Sprint PCS operates the largest 100 percent digital, 100 percent PCS nationwide wireless network in the United States, already serving the majority of the nation's metropolitan areas including more than 4,000 cities and communities across the country. Sprint PCS has licensed PCS coverage of nearly 270 million people in all 50 states, Puerto Rico and the U.S. Virgin Islands.