Behind the Headline
By Susie Helme
Ericsson’s New World Order
Ericsson’s groundbreaking acquisition of Qualcomm’s infrastructure business not only solved the dispute over IPR for CDMA technology which was impeding development of third generation systems, as well as settling once and for all the lawsuits and squabbling between the two companies. It also slotted nicely into a hole in Ericsson’s portfolio of cellular systems. Adding to Ericsson’s existing interests in GSM, TDMA, PDC, NMT, TACS and WCDMA systems, Qualcomm’s San Diego works will now form a CDMA Systems unit within Ericsson’s Network Operators and Service Providers. The new organizational unit will include the manufacture of cdmaOne and CDMA2000 equipment. Other acquisitions over the past year give Ericsson a new footing in the evolution toward IP core networks. At the end of 1998 it bought carrier-class networking company ACC, which now forms part of its Access product unit in Datacom Networks and IP Services. In April this year two further acquisitions—Torrent and Touchwave—added IP routing and enterprise webswitching to the bag. The company is now in the process of merging its wireline businesses with its wireless business units.
In all, Ericsson has spent $496 million in IP acquisitions, reflecting a general pattern in the industry. In the past year Nokia, Siemens, Alcatel and Nortel have all acquired IP companies.
As further evidence of its seriousness about the Internet, the company also unveiled its new wireless web browsing solution—WebOnAir Filter Proxy. WebOnAir is a client-gateway-server solution which speeds up wireless surfing by filtering out non-essential HTML code and compressing information. It works with Microsoft Windows products and is network-independent. Its first customer is German GSM operator Mannesmann, but is also available for TDMA, CDMA and other wireless networks. Ericsson says WebOnAir reduces the time it takes to download larger documents or web by one third—a similar concept to WAP but more suitable for the larger or more graphically-intense downloads. WebOnAir requires a software installation of a Client Proxy in the laptop or PDA and a Gateway Proxy at the network’s connection to the Internet.
An interesting sideline to this is Qualcomm’s announcement that its latest software release will enable handset and infrastructure vendors to provide their customers with wireless Internet access at speeds up to 86.4kbit/s. The company has already shipped the new high speed packet data (HSPD) solution to operators in Korea and Japan. Returning to the theme of 3G development, Torbjörn Nilsson, senior vice president, marketing and strategic business development, presenting "the new telecoms world order" from Ericsson eyes, noted that the Phase 1 standard for UMTS would be ready by the end of the year. "It’s not far away," he commented, "and then the race is on."
Dr Jan Uddenfeldt, senior vice president, technology, then outlined the major concepts in Ericsson’s 3G systems technology and the evolutionary paths proposed for today’s 2G network operators. ATM switching converged into IP routers will form the bones of Ericsson’s backbone networks leading up to 3G. "ATM is today best suited for combining voice and data, and IP routers will be the main technology when voice over IP is fully deployed," explained Uddenfeldt. "Broadband ISDN was the wrong technology. Now it’s IP," commented Torbjörn Nilsson.
Third generation systems will introduce a new concept—the separation of control servers and connectivity, functions which today sit in same switch. "We’ve taken the switch out and maintained it as a server," said Uddenfeldt.
Third generation, indeed, does not look that far away. As a matter of fact, Ericsson is already looking beyond 3G. "Our R&D people are already started working on fourth generation," revealed Dr Uddenfeldt. The only trouble is, he quipped "we don’t know what it is yet..." He did, however, suggest that technology innovations beyond UMTS might have something to do with "higher data rates" or perhaps "doing clever things with antenna technology and modulation". Susie Helme
New alliance enters 3G market
At the same time, the B-CDMA Alliance, a grouping of Siemens, Alcatel, Samsung and InterDigital dedicated to developing B-CDMA for WLL applications, seems to be coming to an end with the departure of key members Alcatel and Siemens. InterDigital seems philosophical about this but insists that B-CDMA technology was not the reason for the end of the alliance. For Alcatel it was, says InterDigital’s chief technology officer Dr Gary Lomp "a product positioning issue" to do with market timing and investment, while for Siemens it was a change of strategic direction. As for InterDigital, Rip Tilden vice president communications and investor relations admits that "the industry as a whole recognizes that the growth rate expected for the WLL market has just not come to pass".
Both men insist that the former partners were more than happy with the technology, an argument that is perhaps reinforced by a more recent partnership, this time with Nokia, in further development of B-CDMA for 3G applications. So is this version of B-CDMA the same or different? Lomp argues that B-CDMA contains all the constructs that are in 3G: broadband format, fast power control, similar processing of multi-tasks in terms of rake receivers and coherent processing and reverse link pilots. He adds that his company has both an intellectual property and a technology portfolio that is directly applicable to 3G. However, he points out: "We will have to modify certain interfaces and formats within our technology so that it won’t be the B-CDMA format. But those blocks that we have developed for B-CDMA are directly applicable in WCDMA."
How does the agreement with Nokia work? Under the terms of the deal, InterDigital will retain ownership rights over the technology that they develop and will have the right to license it or use it in products sold to third parties. The benefits to Nokia of the deal are that the company will enjoy certain market preference periods, some of which are clearly implicit in Nokia’s presence in the InterDigital laboratories while technology development is going on.
As for the market opportunities this research will bring InterDigital, ASIC products appear to be one opportunity—although a very different one from the full system products of the past, such as the TDMA WLL systems that were an early success for the company. InterDigital has not previously been a silicon vendor, so, as Lomp notes, for the development of ASIC products, "we do anticipate partnerships and other business arrangements with semiconductor companies." The emphasis of this approach is on strengths: developing a system on a chip is more logical for this company than building a whole extended platform—although platforms, in the form of reference systems designs and test systems, are likely to be developed.
Essentially, then, the company sees its strength as being in core technology. This is why another market opportunity is seen as IPR, says Lomp: "The other aspect of the core technology market that I see for us is in those cases where the client is perhaps not interested in buying silicon from us, or from a consortium that includes us, but rather would like to buy intellectual property blocks." He explains that this means technological design blocks, such things as Viterbi decoders, turbo decoders, rake processors, power control processors and channel estimators. "These blocks are essentially the primitives that all ASICs are built from," he points out, "and we’re developing a whole library of intellectual property blocks both as part of our Nokia initiative and also in an independent initiative of our own that’s oriented towards the 3G market."
Generally speaking, he says: "we have no doubt about our core technology invention development capabilities whatsoever." The point of partnership is in the second half of the business challenge: delivering that technology into the market. "And what Nokia is helping us to do—in addition to participating in the development of the standard technology—is to set up the right mechanisms for us to deliver into this huge market." There is some similarity here with the original B-CDMA concept, described by Lomp as "essentially a technology play by InterDigital based on B-CDMA technology whereby we would be the supplier of that core air interface to various equipment manufacturers that at first were going to address the fixed access market".
In the same way, there’s no point in a company of InterDigital’s size going it alone. If, as Lomp suggests, telecommunications product is built upon the base core technology, systems expertise and the actual productization ("the forming of an actual handphone or whatever") then, clearly, InterDigital isn’t big enough to be a player in the last of these, "so we’re focusing on technology and systems" and leaving products to others.
Technology development, says Lomp, is now "100 per cent" targeted at 3G: "We want to be compliant with it as it evolves". What, then, if no harmonization occurs? "Even the variants, in the case that we don’t see a full-blown standard…but to the extent that there are standards we will build technology directly aimed at those standards—and that includes the FDD aspects and the TDD aspects. We have a deep background in both TDMA and CDMA and as a result of that we’re able to optimize the performance of any air interface." Vaughan O’Grady
Oz ready to roll
But Telstra will not have it all its own way in the Australian CDMA market. Hutchison Telecom, which won licenses for Sydney and Melbourne, is planning a full commercial launch in the first half of 2000. The company says it is pitching the service at the second and third line market where there is a demand for Internet and data phone lines. Hutchison’s strategy will be to win the voice traffic from this market, leaving the fixed line for data. As part of this strategy the company says it will introduce untimed local calls. Managing director Barry Roberts-Thomson, speaking at the recent NOW ’99 conference in Sydney said: "By the first half of 2000 Hutchison will change forever this industry’s traditional view of what is a mobile call and what is a fixed call. Our service will deliver the functionality of two phones in one."
Haiti signs up to cdmaOne
Haitel, a company comprising several private investors including MCI Worldcom, was recently granted the right to operate in the 1900 MHz frequency band. Installation of the network began the first quarter of 1999. Haitel will deploy voice switch-based services such as call waiting, caller ID, credit card calling and call forwarding. Nortel Networks will implement a complete CDMA network and will also provide network design, engineering, installation, commissioning, operations and maintenance services.
Meanwhile, adding to Nortel Networks’ recent impressive run, Canada’s Bell Mobility has signed a three-year supply agreement with the company—a deal estimated to be worth US$200 million—which will enable Bell Mobility to significantly expand the capacity and coverage of its cdmaOne digital wireless network in Ontario and Quebec.