Big Contacts, Big Plans for CDMA
Motorola makes good in Japan, the IS-95 pioneer expands its portfolio and the CDMADevelopment Group's Advanced Standards Initiative looks ahead to the Third Generation of CDMA.
MOTOROLA SCORES IN JAPAN
By any standards, the award of a wireless network contract valued in billions of dollars would be significant. That two of Japan's leading cellular service providers, DDI and IDO, are choosing CDMA networks makes this something of a watershed for the technology.
Scott Wyman, of contract winner Motorola Cellular Infrastructure Group, was probably not making an understatement in calling this a "very exciting announcement". Although no precise amount was cited for the contracts that call for Motorola to deploy the new networks, the two operators plan to invest some US$3billion in capital expenditures, making this the largest CDMA contract to date, and one of the biggest cellular contacts of any kind anywhere.
DDI plans initially to deploy its network in the Kansai area (which includes Osaka, Kobe and Kyoto). IDO's network will take in the Kanto and Tokai areas which include Tokyo, Nagoya and Nagano. Trial systems will start later this year with commercial launches in the second quarter of 1998 and roaming available immediately between Tokyo, Nagoya and Osaka. Combined nationwide CDMA coverage should take place in 1999 after what Motorola describes as "a very aggressive rapid buildout as happened with PDC".
Both networks will use Motorola's SC family of base stations and the EMX 2500 mobile switches developed jointly by Motorola and DSC Communications Corporation. DDI and IDO already use Motorola infrastructure equipment as part of a nationwide analog cellular TACS network in the country.
According to Jack Scanlon, General Manager of Motorola's Cellular Infrastructure Group, it was around 18 months ago that the Japanese telecommunications ministry realized that spectrum capacity was fast becoming exhausted and that an appropriate technology had to be found to satisfy future needs. The government supported the choice of the cellular service providers to go with CDMA. Hardly surprising then that Scanlon calls this "a great endorsement of our technology".
It's an endorsement he no doubt hopes will lead to even more business. Scanlon pointed out that although Japan is the fastest growing cellular market in the world-and one in which his company has over 25% of the infrastructure business-market penetration has by no means reached saturation point. This leaves a lot more would-be customers-many belonging to the country's large middle class-to be targeted.
He added that the South East Asian market as a whole is an important one for CDMA because of demand for capacity-a key point in making the sale to the Japanese. The immediate potential capacity gain of the new system is estimated at eight to ten times AMPS. Another boost for capacity-and a significant boost for a still emerging speech coding technology-is the planned use of new eight kbps enhanced variable rate vocoders (EVRC). These are described as digital voice encoders that provide landline quality voice transmission and significant capacity gains compared with the 8 kbps and 13 kbps vocoders currently in use by other cellular and PCS operators. They are also said to be "exceptional' in eliminating background noise from phone conversation-no minor claim in the urban bustle of Tokyo.
No handset portion of the contract was announced; a decision is likely in one to three months. This contract follows hard on the heels of an opening for Motorola in another, potentially bigger, market. Plans have been announced to set up a trial CDMA cellular network in mainland China. The trial in Beijing will be the first of a limited number of large-scale commercial CDMA trials planned by the national-level Beijing Telecom Great Wall joint planning office. (VO'G)
QUALCOMM REACHES FOR THE SKY
While Motorola scores a significant success, IS-95 originator Qualcomm has also done well lately, winning a number of important contracts and posting some good financial results. A US$275 million contract has been awarded to the company by mobile satellite services company Globalstar LP. The contract calls for the manufacture and supply of gateways for the deployment of Globalstar LP's world-wide low-earth orbiting satellite-based digital system. Qualcomm itself already has primary responsibility for the development of the equipment and software for the ground segment of the system using its CDMA wireless technology. Globalstar LP will resell the gateways ordered under the contract to service providers worldwide. It seems likely that the agreement could grow as large as $600 million as the network is built out.
Back on the ground, the company has signed an agreement with Chilesat Telefonia Personal SA to supply about US$94million of PCS infrastructure and subscriber equipment and services. The growth in the company's infrastructure business has evidently been significant - enough in any case to justify Qualcomm's opening in San Diego of a new all-inclusive wireless infrastructure manufacturing facility.
This facility is designed specifically for the purpose of configuring, testing and assembling wireless infrastructure products. and has capacity to roll out 400 base stations per month. One should not forget the handset market, however, which was, until recently, almost the exclusive preserve of Qualcomm. The company recently announced that its joint venture with Sony, Qualcomm Personal Electronics (QPE), had shipped over one million CDMA digital portable phones to service providers in the US, Canada, Hong Kong and Korea. The company remains the largest supplier of such phones for the US market. This is underlined by recent contracts from Cellular One for its Phoenix Arizona cellular network and one worth around US$80 million from US West for handsets for its 53 US markets.
Nor is Qualcomm to be left behind by the coming CDMA boom in Japan. It has signed a multi-million dollar royalty-bearing licence agreement with Kokusai Electric Co. Ltd. of Tokyo under the terms of which Kokusai has been granted a patent and technical licence to manufacture and sell CDMA subscriber products. Small wonder perhaps that its second quarter results nearly quadrupled those of the same period in 1996 and were 50% higher than the first quarter at US$586million.
Qualcomm's ambitions do not stop in the industrial sphere, it seems. The company may have an opportunity to influence national policy too with the appointment by President Clinton of its Vice Chairman, Dr. Andrew J Viterbi, to the Advisory Committee on High Performance Computing and Communications. (VO'G)
CAN CDMA GO ALL THE WAY?
These are heady days for CDMA development. Hot on the heels of the announcement of Motorola's colossal contract to supply IS-95 CDMA to Japan's DDI and IDO, the CDMA community has announced two new initiatives to take CDMA forward as a Third Generation system. Nokia, Motorola, NEC, Lucent and Ericsson are among those included in a number of suppliers short-listed by NTT Do Co Mo to develop a wideband CDMA Third Generation system.
Meanwhile, the CDMA Development Group, which has been instrumental in pushing IS-95 CDMA throughout the world, has announced an Advanced Systems Initiative to "guide the evolution of CDMA to meet requirements for wireless broadband services well into the 21st century, thus providing a clear growth path for operators of existing CDMA systems."
"We're trying to work with various countries around the world to come together on a Third Generation system", says Perry LaForge, the CDG's Executive Director. "We're currently working with the Japanese and the Koreans but we'll work with just about anybody that wants to work with us to get consensus. Working across multiple regions across the world like this will put us in an even stronger position."
The Advanced Systems team is currently working on defining some high level requirements, due to be completed in the third quarter of this year. These will include fundamental requirements such as multimedia services, user-control services, global mobility, Internet access and location services. These will then be broken down into lower level requirements and specifications. This phase will continue into next year.
In parallel with this work, a number of CDG member companies are developing technical approaches for Advanced Systems that will be among those considered by the ITU for IMT-2000. The CDG is planning small-scale US trials for next year, to be followed by trials involving participants in Asia-Pacific countries. There are liable to be a number of bodies coming up with wideband CDMA proposals to the ITU. As well as the Japanese position and that of the CDG, the U.S.. Telecommunications Industry Association (TIA) is also likely to come up with CDMA-based proposals of its own. Theoretically, there could be three different sources of CDMA proposals for Third Generation systems-four in the event of the Koreans submitting their own proposals as well.
The CDMA Development Group is positioning itself as a bridge between the various parties worldwide with an interest in developing a CDMA system for the Third Generation. "That's exactly what we're doing", says Perry La Forge, "but we are aware that at the end of the day there might be multiple approaches. Regardless of how that works itself out, we are going to continue developing advanced system capability for those operators that are currently deploying IS-95." (PD)