Clearly, 1997 has been a remarkable year for the CDG and its member companies. cdmaOne systems are now in over 25 countries around the world, serving over six million customers on five continents. The adoption rate of cdmaOne has been the fastest of any technology to date a testament to its robustness and maturity. Furthermore, the adoption of cdmaOne by China, Japan, India and other major high-growth wireless markets will continue to fuel subscriber growth and improve worldwide economies of scale for cdmaOne.
Even in North America, where the competition from other digital technologies was most intense, cdmaOne emerged as the dominant standard. In the US, cdmaOne PCS systems launched ahead of their GSM counterparts, as the much touted time-to-market advantage of GSM technology failed to materialize. North American cdmaOne cellular and PCS operators are now building a commanding lead both in subscriber numbers and in geographic coverage.
This lead does not result merely from beating the competition to market, but also from superior levels of customer satisfaction. For example, the Korean carrier SK Telecom claims 93% of new subscribers rate their cdmaOne digital service superior to analog cellular. Similarly, AirTouch Communications reports that over 90% of its customers rate its cdmaOne service as comparable or superior to the previous AMPS network. Usage for AirTouch customers who have migrated from analog to digital has risen an average of 30% due to the improved voice quality and longer talk time. Overall, AirTouch is at least a year ahead of plan on subscriber minutes of use on its cdmaOne system. In several service areas, the company will introduce a second carrier six to twelve months early to handle the additional call volumes.
Recent reports reinforce these operator testimonials. In Canada, the Toronto Star reported on newly launched Canadian cdmaOne systems in its "Consumer Guide to Wireless Phones. " The paper reported that CDMA "had the best sound quality. Of all the platforms, it is said to be the most difficult to hack into and eavesdrop upon. Battery life is longest...the battery was sometimes left on for a full day before a charge was needed." In contrast, the report characterized the sound of TDMA as "often poor, resembling something like the computer burps of a robot."
Independent research groups, such as the Telecommunications Research and Action Center (TRAC), are also singing the praises of cdmaOne systems. TRAC recently declared that "CDMA came out well ahead in power needs, signal quality, reliability and community impact" compared to other digital wireless technologies. The organization recommended CDMA as the technology of choice for cellular phone users.
This year also brought a host of product innovations, particularly on handsets. The rapidly increasing availability of dual-band/dual-mode cdmaOne phones is particularly noteworthy, as they provide cdmaOne users with the ability to seamlessly roam from digital cdmaOne PCS systems to traditional analog systems using the same phone. Dual-band/dual-mode phones, which can operate in CDMA digital mode in the PCS band (1.9 GHz) and in analog mode in the cellular (800 MHz) band, provide cdmaOne PCS carriers with a significant competitive advantage through expanded coverage. Already, subscribers to Bell Mobilitys cdmaOne service enjoy full handoff capabilities between PCS and analog cellular service.
Worldwide, cdmaOne handset manufacturing capacity is likely to exceed 17 million units per year by the end of 1998. The widespread availability of cdmaOne handsets, in turn, is expected to substantially reduce handset prices and make cdmaOne wireless services available to an even larger customer base.
Finally, 1997 saw the launch of the cdmaOne brand as a global technology designator for IS-95 based CDMA systems. The CDG member companies have been quick to adopt cdmaOne as part of their own marketing efforts, but nowhere has this initiative been more visible than in Japan. Two Japanese CDMA cellular operators, DDI and IDO, created a partnership that will offer nationwide service beginning in April 1998. They adopted cdmaOne as their service brand and announced it with great fanfare in early November. We look forward to working closely with our membership around the world to increase the visibility of the cdmaOne brand in 1998.
Dispelling the fog of misinformation
I am always amazed, however, that in a year full of undeniable successes there are still organizations that believe they can stop the worldwide growth of cdmaOne. Although their credibility was lost when they said CDMA would never work, these groups continue to cast a fog of misinformation about cdmaOne wherever they can. Such tactics only make the mission of the CDG more important; it only strengthens our resolve. Our primary tactic for dispelling the fog is to have CDMA operators talk out about their experiences. Fortunately, many operators are just as incredulous about the misinformation as I am.
Craig Farrill, Vice President of Strategic Technology at AirTouch Communications, notes: "cdmaOne technology works and works well. In our commercial deployments, weve met or exceeded all of our planned targets for minutes of use and call quality. We firmly believe that we are delivering the best quality service available. cdmaOne has met all our expectations and we are pleased with both the performance and the economics."
Brian OShaughnessy, Vice President of Technology Development at Bell Mobility, says: "Our cdmaOne deployment has been a remarkable success. Bell Mobility dealers were pleasantly surprised when cdmaOne customers returned to the store to thank them for selling such a great product. This response was quite a contrast to the negative comments we received from customers when Bell Mobility introduced US TDMA a few years ago. Our decision to replace US TDMA with cdmaOne was obviously the right one!"
Although the opponents of cdmaOne will no doubt continue their misinformation campaigns, they are at best an annoyance, not an obstacle. Just as 1997 was a year of accomplishments, we expect to continue our record of achievement in 1998. Our success next year will be measured by our progress on three major issues: the establishment of cdmaOne as a global standard for Wireless Local Loop (WLL) systems; the continued expansion of cdmaOne mobile systems; and the development of standards for third generation cdmaOne systems.
Establishing the global standard for WLL
The unique characteristics of cdmaOne -- fewer cell sites, expanded subscriber capacity, superior voice quality, combined fixed and mobile services, superior demand management capabilities, equipment interoperability and economies of scale -- provide competitive advantages that proprietary CDMA standards cannot match. The clearest proof of the emergence of cdmaOne as a global WLL standard is the number of deployments that have occurred this year: by the end of 1997, as many as 16 cdmaOne WLL networks will be in commercial operation or deployment across the globe.
Continued expansion of cdmaOne systems
Along with the growth of WLL systems, accelerated growth for cdmaOne mobile systems seems certain in 1998, with the bulk of this growth occurring in Asia. China, Japan and Thailand are expected to launch cdmaOne commercial service in 1998, while Korea will reinforce its position as the leader in cdmaOne subscriber numbers by rolling out PCS service in late 1997 and early 1998.
North America will also contribute substantially to cdmaOne subscriber growth due to the continuing system deployments in Canada and the United States as well as the anticipated launch of cdmaOne networks in Mexico and Guatemala. Further subscriber growth will result from the launch of cdmaOne PCS service in Chile and the expansion of cdmaOne cellular service in Peru.
In Europe, subscriber growth will come from the launch and expansion of networks in Poland, Romania and Russia. In Africa and the Middle East, cdmaOne systems are deploying or in operation in Egypt, Israel, Nigeria, Yemen and Zambia.
Milestones on the road to 3G
A number of new features should appear on cdmaOne networks in 1988, providing operators with new opportunities for service differentiation. Among these are short messaging services (SMS), over-the-air activation (OTA), and voice activated dialing. In addition, work is proceeding well towards 64 kbps data capabilities. This is an important interim step between existing cdmaOne networks and the third generation (3G) systems that will arrive after the year 2000.
Development of 3G standards is the task of the CDG Advanced Systems Team. They are working to develop a Wideband-cdmaOne technology that meets IMT-2000 requirements for high-speed data, global mobility, and other services identified as critical by the carrier members of the CDG. At the same time, the initiative will facilitate a graceful evolution of cdmaOne to Wideband-cdmaOne to take advantage of the benefits of 2G.
With those goals in mind, efforts to develop 3G standards will have three primary objectives in 1998. The development of TIA/ITU standards governing the radio interface and the core network will be a main focus of our efforts. In parallel, the CDG and its member companies will work closely with other regional and global standards bodies to identify common ground between systems. This will be necessary to implement the IMT-2000 "Family of Systems" concept and achieve seamless global roaming with the different 3G standards emerging around the world.
While the work of defining standards moves forward, laboratory testing of 3G equipment and software will also proceed. Another possible milestone for 1998 will be the extension of cdmaOne to frequency bands that are not currently served by cdmaOne systems. While these achievements do not yet represent a true 3G capability, they will serve as visible evidence of our progress toward viable 3G cdmaOne systems.