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From The Fringe To The Forefront

By Maxine Carter-Lome, Wireless Marcom

Just four years ago at Geneva and ITU's Telecom '95, Code Division Multiple Access (CDMA) was a topic of much speculation and private debate but little formal discussion. CDMA has moved from the fringe to the forefront of 3G and wireless-related discussions at Telecom '99 in just four years.

This has been a watershed year for CDMA technology, both in the US and around the world. 1999 saw the development and expansion of CDMA systems to over 10 percent of the US geographic regions (followed by GSM systems with 7.3 percent and TDMA PCS systems with 6.2 percent), and for the first time, CDMA handset sales in the US surpassed that of TDMA and GSM. At the end of March 1999, the CDMA Development Group reported the number of cdmaOne subscribers in the past year grew by 440 percent, with the total number of North America subscribers at over 8.8 million.

"We expect CDMA to maintain its momentum and actually increase the distance between itself and competing standards in the US marketplace," says Matt Hoffman, senior industry analyst and program manager for Dataquest's Mobile Communications Terminal Devices North American program. Dataquest reports first quarter 1999 sales of CDMA handsets in the US surpassed the more established TDMA handset sales of 2.8 million units. TDMA had been the leading handset technology in 1998, with 8.2 million total unit sales, followed by CDMA with 6.8 million units and GSM 1900 with 2.9 million units.

Outside of the US, CDMA now has a market presence in nearly every part of the globe except Western Europe, and with 3G potential that should be changing. To date, cdmaOne deployments are underway in more than 35 countries around the world, with more than 27 countries already in commercial service. The worldwide cdmaOne subscriber number is expected to swell to 125 million by the end of 2002. Moreover, CDMA is being evaluated as replacement technology for older analog systems, such as NMT450, and is a prime contender for newly-licensed digital networks, and is considered the technology for next generation wireless services. In fact, Subodh Karnad, author of the Frost & Sullivan report, World CDMA Infrastructure Equipment Markets, says CDMA was "the hottest of the three cellular standards" based on infrastructure sales growth of $2.1 billion in 1998 and over 20 million total subscribers.

When Telecom '95 was held, there were more analog mobile phones in the world than digital, and CDMA was a technology of much speculation with virtually no track record. Only a small handful of the wireless and second generation mobile communications technology panels at the show addressed CDMA, and fewer technical papers on the subject were presented.

Three representatives from the Electronics and Telecommunications Research Institute, Republic of Korea, gave a talk entitled A CDMA-based Infrastructure: Its Development, Architecture, and Field Trial during the Second Generation Wireless Technology panel, along with a talk by representatives from Bell Laboratories, USA, on Frame-mode/ATM Transport Infrastructure for CDMA Cellular and PCS Networks. On a panel entitled 3rd Generation Wireless Technology, Osamu Kato from Matsushita Communications Industrial Co. Ltd., Japan spoke on CDMA-TDMA/TDD Systems for Next Generation Mobile Telecommunications. That effectively covered all formal technology discussions on CDMA at the conference. On the exhibit hall floor, Nortel and Qualcomm allowed attendees to make a live call on CDMA in their booth, bringing the technology to a European public for the first time.

Uphill battle
In the broader context of trade show as industry microcosm, CDMA was not a new or unknown technology at the time of Telecom '95, just one given little credit or exposure in such an important and influential international forum. Yet CDMA has faced an uphill battle, both in the US as a technology for digital cellular and PCS, and in a broader GSM-dominated European community, since it came to the formal attention of world standards bodies in 1989.

At the time of Telecom '95, Hutchison Telecom was launching the world's first commercial CDMA system in Hong Kong, an event worthy of much speculation and political discord in the international telecom arena and within that country. In North America, the Cellular Telecommunications Industry Association (CTIA) had been exploring the technology as a second generation digital standard for quite some time, despite the political pressure brought to bear by important pro-TDMA member factions, notably McCaw Cellular Communications (today AT&T Wireless Services) and Southwestern Bell Mobile Systems.

"Let's go back to 1995 when CDMA was not really out of the gate yet. If you look from '95 to today, it's amazing that the technology came and is delivering pretty much what was promised," says Jane Zweig, executive vice president of Herschel Shosteck Associates, Ltd.

Heading into Telecom '99, the digital landscape looks quite different and CDMA is firmly in the spotlight. "I think you're going to hear [at Telecom '99] information about CDMA that is quite different from what we heard in '95 in that CDMA has now been embraced as a platform for 3G services by sectors of the industry that previously confined themselves to GSM and TDMA-the older digital technologies," says William Bold, vice president of Governmental Affairs at Qualcomm.

"CDMA will be a hot topic at the show in the greater context of wireless," says Bold. "People are thinking about next generation services, and when they think about next generation services they're thinking about CDMA-where companies plan to take it in Europe, where they plan to take it in Asia, North America, and in other leading markets. I also think a lot of the discussions will focus on the applications, the market for 3G, and how equipment vendors plan to get there-software applications in the handsets, what sort of interfaces will be presented to consumers to access email or the Internet on a mobile phone…The technology issue, much to our satisfaction, has largely been settled in favor of CDMA."

"I think wireless or mobility will be a fundamental issue at this year's show," says Mats Yonne, marketing communications manager, Ericsson Inc. "When you're talking about mobility, one of the key issues is the whole aspect of migration or evolution from today's second generation to tomorrow's third generation. But there are several aspects of that. One is the whole political discussion of standards and agreements and specifications. Another is making full use of the existing infrastructure, whether that's CDMA, TDMA or GSM. And how do you combine those in the most efficient and economical way for the operator to make sure they maximize their current infrastructure investment."

"The hot topics will be evolution to 3G and the applications a high speed data pipe over the air will engender in the marketplace," says Jim Slinowsky, senior manager, Product Management, Wireless Solutions, Nortel Networks.

"Now that CDMA is on everyone's agenda, for third generation as well, there's interest in CDMA and at the ITU level we certainly can talk about the progress going on in 3G on a worldwide basis," says Perry LaForge, executive director of the CDMA Development Group (CDG). " What I think you'll see at the show is a lot of focus on CDMA as third generation from the various camps and they'll be a lot of buzz around wireless information services and different wireless portals and tie-ins with companies like Yahoo and all the different devices you might need. WAP-enabled phones will be a big buzzword. Basically, what's going to take place in the world of wireless information services, the devices, and all the potential applications coming forward. It's what you're seeing on microscales all over at other events."

Harmonization
A number of panel discussions and papers at Telecom '99 will address the issue of network migration and the industry's evolution to 3G. The buzzword born of these discussions in relation to the inevitable fragmentation of CDMA standards is 'harmonization-harmonization between the two air interface standards that have emerged in the debate about 3G.

cdmaOne backers have fought a bloody battle over 3G technology for more than a year in their attempts to harmonize their CDMA2000 proposal with WCDMA technology, an incompatible proposal Japanese and European's standards bodies have selected for greenfield networks and as a migration path for Global System for Mobile communications (GSM) networks. Harmonization, they claim, provides the wireless industry economies of scale and a competitive environment that focuses on features and services, rather than technical standards. Other benefits of harmonization include lower research and development costs, worldwide roaming, stronger wireless competition with landline telecommunications systems, fulfillment of the ITU IMT-2000 goals, and most importantly, increased consumer satisfaction.

Given the vested interest of various factions of the wireless industry and what's at stake in terms of national pride, the ITU and other standards and governmental organizations have been challenged with finding a resolution. So have network operators and infrastructure manufacturers. In the case of US manufacturers, such as Qualcomm, Motorola, and Lucent, the opening of a Pan-European market previously closed to all but GSM-based suppliers for the sale of next generation infrastructure and terminal equipment is mission critical. These companies have lobbied the US government extensively during the past year to fight for access to European markets for US-built wireless technology.

Efforts to harmonize WCDMA and CDMA2000 are being pursued under the auspices of the Geneva-based International Telecommunication Union, which is attempting to play the role of international arbiter in these debates.

In addition to promoting 3G harmonization between WCDMA and CDMA2000, the ITU is also being pressured by network operators and infrastructure manufacturers of all technologies to protect their investment in embedded second generation digital networks. To this end, the ITU has not only endorsed WCDMA and CDMA2000 standards but a 3G Time Division Multiple Access (TDMA) standard as well. It has always been, however, the ITU's goal to support a single wireless standard for 3G to facilitate global roaming.

However, the solution it seems may come in the form of an operator-proposed tri-mode 3G standard that supports a TDMA standard and a CDMA standard encompassing three "modes" that correspond to Qualcomm's CDMA2000 proposal, the European-backed WCDMA proposal and a third CDMA-based technology for unlicensed personal communications services spectrum. Operators would choose among the technologies based on their existing systems. Maximizing the common aspects of the divergent technologies would benefit 3G operators by helping to minimize handset costs, facilitate global roaming, and ensure backward compatibility.

The Operators Harmonization Group (OHG), an ad hoc assembly of mobile-phone operators from around the world, reviewed and agreed to the development of a tri-mode standard, and held a series of meetings to hammer out technical differences within the standard, and compiled a technical framework document that will be submitted to various world standards-development bodies. The document is to serve as a blueprint of agreed-upon technical issues for regional standards bodies to consider as they set final 3G CDMA standards. The group presented its findings to the International Telecommunication Union at its meeting in Beijing this past July.

This carrier-crafted plan was endorsed by an ITU task group at the Beijing meeting, which agreed to pursue a tri-mode Code Division Multiple Access third-generation standard that will encompass direct sequence (WCDMA), multi-carrier (CDMA2000) and Time Division Duplex versions of CDMA technology. Although the compromise does not result in one CDMA-based standard, it does give the industry a way to get beyond the current deadlock and move 3G forward. What it won't do, say critics, is make it any more likely that US CDMA technology will make inroads into Europe, despite the much-ballyhooed settlement of the patent dispute between Qualcomm Inc. and L.M. Ericsson.

L.M. Ericsson, once the largest naysayer of cdmaOne technology, conceded earlier this year it could no longer ignore the growth of cdmaOne technology around the world and committed to building cdmaOne handsets and systems. The company settled its patent dispute with Qualcomm and purchased the company's terrestrial CDMA wireless infrastructure business, including its R&D resources, located in San Diego, Calif, and Boulder, CO. Without a commitment to cdmaOne technology, Ericsson could not bid on 40 percent of the infrastructure market, said the company.

Asia Pacific
Despite the agreement, which calls for both companies to support the single CDMA standard at every regional standards body, there is a view Ericsson simply will sell WCDMA in Europe and market CDMA2000 in the United States through its Qualcomm acquisition. Without Ericsson's support in the European community, CDMA2000 faces an uphill battle in that all-important region. According to many analysts, Europe is not about to abandon WCDMA technology after all the work that has been put into making it the 3G successor to GSM, and neither is Ericsson.

"The flavors of third generation will be CDMA in some form-whether it's a GSM path or a CDMA/IS-95 path," says Zweig of Herschel Shosteck Associates. "CDMA is the standard for the next millenium although not necessarily IS-95-based. The majority of the wireless world is still GSM and they will follow the wideband CDMA path. With the Qualcomm-Ericsson political truce, a lot of the political pieces have diminished, although there are still some. Technically and theoretically, any operator could choose any technology and move along on an evolutionary path. The reality is the GSM world will most probably not embrace CDMA2000 (the IS-95 route) for political reasons."

cdmaOne, however, is gaining momentum in the Asia-Pacific region with the recent cdmaOne nationwide service launch by DDI and IDO, which could shift the 3G tides and give cdmaOne supporters hope for the region's evolutionary path to 3G. The launch of these two networks marked the nationwide coverage of cdmaOne service in Japan. At the end of April 1999, the region boasted over 800,000 cdmaOne subscribers.

The technology received another boost in the region when China Unicom, which competes with GSM giant China Telecom, announced in June its decision to deploy CDMA technology to ensure its survival into the next generation. China Unicom plans to spend $845 million on CDMA networks this year, which will have an initial capacity of 2.6 million subscribers, growing to 10 million in 2000. The networks are expected to cover 250 cities and 40 million people by 2003. "We have such a big footprint and cost advantage now," says CDG's LaForge. "Wideband CDMA technology can't be used as a way to shut out cdmaOne anymore."

Automatic roaming
As a result of China Unicom's decision, manufacturers say Singapore Telecom and Chungwa Telecom, the dominant carrier in Taiwan, are close to tendering cdmaOne contracts as well. To further solidify the region and maintain cdmaOne's momentum as the technology of choice, Hutchison Telecommunications Hong Kong, Japan's DDI and IDO Corp., along with Shinsegi Telecom in South Korea are partnering to offer international automatic roaming by the end of the year - the first extensive international roaming initiative in the region among cdmaOne operators.

Moreover, the CDG has been aggressively working to evolve cdmaOne in order to bring the capabilities defined by the ITU's vision for IMT-2000, a third generation wireless standard, to market ahead of the 3G timetable. IMT-2000, it is projected, will support broadband applications while ensuring global interoperability.

IMT-2000 is broad in scope in as much as it seeks to link disparate wireless transport types ranging from satellites to microcells. The standard also specifies the development of common radio interfaces and interconnection of different radio transmission modules so that vendors can more easily build mobile terminals that work in more than one operating environment. The end-product envisioned by those crafting the standard is a small terminal that can be taken anywhere in the world and be used to access certain basic services. That's certainly a vision shared by the CDG as well.

"The explosive growth of the Internet and the migration to third generation technology make the future of wireless a very exciting prospect for the cdmaOne community," says LaForge. "The CDG has worked diligently over the past year and effectively surpassed our own goal of securing the future of wireless globally with a 3G strategy that will enable the growth of new information services, such as mobile web. High speed wireless Internet and two-way information services from a mobile phone are only a few of the exciting services that will be offered in the new millennium. Multimedia content is soon to follow."

Manufacturers, network operators, and telecom regulatory and standards bodies around the world have a lot at stake as the wireless industry inevitably evolves to its next generation of service offerings. However, despite the publicity generated over 3G, and the political debates ignited by the standards process, the all-important market demand is questionable, as is the commitment level on behalf of network operators.

Network buildout
CDMA vendors at Telecom '99 will attempt to get carriers off the fence by talking about and showing new products and applications designed to make the promise of 3G a marketable commodity for end-users, and CDMA the technology of choice for second generation networks.

In the end, however, it all comes down to network build-out, regardless of the technology chosen or CDMA's delivery of higher-speed data rates and promise of greater bandwidth and increased network capacity.

"The technology can only do so much," says Zweig of Herschel Shosteck Associates. "If the network is not built out properly then you don't have a winning proposition. It's not necessarily the limitation of CDMA or any technology but how well the networks are built. Cell density is key."

Beyond that, say infrastructure manufacturers, the issue is having an elegant and inexpensive evolutionary path to next generation services that allows network operators to protect their current investment while moving forward in a manner that makes sense for global roaming and meets the market's demand for new non-voice services and higher data rates.

No one doubts the future of 3G is in CDMA. What path network operators take to get there, and what applications will attract the market, is still open for debate and a topic sure to be publicly and privately addressed in Geneva.

Maxine Carter-Lome is a principal in Wireless Marcom, LLC, a strategic marketing and communications company specializing in wireless communications. She is also the former editorial director of Wireless for the Corporate User and editor of Cellular Marketing magazines. She can be reached online at MCLConsult@aol.com