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Opportunity and Uncertainty

Big opportunities in small markets across North America. Australia embraces cdmaOne as analog networks give way to digital. And the hunt goes on for 3G harmony.

Rural relief

Now that cdmaOne has made its mark in North America's largest metropolitan markets, manufacturers are stepping in to help carriers build a business case for expansion into smaller suburban and rural areas.

Led by Sprint PCS, which analysts say has garnered more than 35 per cent of all U.S. personal communications services subscribers, cdmaOne has made impressive inroads into major metro areas. Allied Business Intelligence predicts that cdmaOne cellular and PCS networks will tally some 28.2 million subscribers in North America by 2002. Such phenomenal growth will certainly entail expansion outside of the biggest cities, creating opportunities for smaller carriers seeking cost-effective ways to come on line with cdmaOne.

Samsung Telecommunications America and Tecore Inc. are among vendors seeking to exploit this opening. The two have joined to offer a modular solution for small PCS operators entering second-tier markets. The Samsung-Tecore partnership integrates Samsung's Pico Base Transceiver Station - the PicoBTS - and Tecore's AirCore Platform MSC and transmission system.

The modular cdmaOne solution competes economically with infrastructure equipment for other air interfaces and could help sway small PCS licensees to make cdmaOne their technological choice, says John Kavulich, Samsung's senior product manager of wireless systems.

Such a decision is being aided by the fact that, overall, costs for cdmaOne base stations have fallen, allowing them to compete price-wise with base stations for TDMA and GSM communications networks. Paul Sergeant, senior manager of product marketing for CDMA wireless networks at Nortel Networks, says this price decrease is due to economies of scale as well as technological advances. He agrees that the cost parity is helping CDMA expansion. "We've been able to help rural operators justify putting in CDMA," he adds.

Casey Joseph, Tecore's chief technical officer, claims that "carriers have been buying into more capacity than needed" because only large, centralized switching systems were available for cdmaOne networks. Joseph says Tecore's AirCore scaleable switching system can be cost-effective with as few as 500 subscribers and can handle up to 100,000 subscribers. Joseph notes that using scaleable solutions lets smaller operators affiliate with brand-name carriers like a Sprint PCS but continue to "operate their own systems and control their own destiny."

For its part, Nortel touts scalability and modularity at the base station level, with its Mini Cells and higher-capacity Metro Cells sharing common components that allow a network to be quickly reconfigured in line with changing usage patterns. Sergeant notes that while coverage may be a rural carrier's first concern, the network must be able to add capacity once corporate services and fixed applications grow in popularity.
Nortel has been targeting its DMS-100 switch to rural markets because it enables independent phone companies to upgrade their standard wireline service but add wireless service as an adjunct, Sergeant notes.
The manufacturer recently sold a DMS-100 switch to RT Communications of Worland, Wyo., for wireline and wireless traffic and will supply 1900 MHz cdmaOne base stations to SpectraCom, a C-, E- and F-band PCS provider owned by RT.

Nortel also sold a DMS-100 to Utah-based UBTA Communications, which has about 4,000 customers. UBTA will use the switch for wireline telephone traffic as well as 800 MHz analog and Time Division Multiple Access networks and a cdmaOne 1900 MHz network operated by its wireless subsidiary, Uintah Basin Electronic Telecommunication (UBTA).
UBTA is one of the first operators planning to offer analog, TDMA and CDMA in the same market, a trend that could become more prevalent as rural operators seek out roamer traffic. Likewise, Tecore's switch also lets an operator add software to accommodate multiple air interfaces, making wireless upgrades even more feasible for rural entities that need multiple revenue flows.

While these cost-effective cdmaOne technologies may be getting their starts in U.S. markets, they could have global futures. The Samsung-Tecore solution "was developed for the U.S. as a way to reduce costs in line with falling ARPU (average revenue per subscriber,)" Kavulich says. But he notes that Samsung is taking the product to South Korea, showing that there is an international business case for scaleable cdmaOne technology, he says.
Tammy Parker

Australia's digital decision

Australia's Telstra has announced that a new national cdmaOne mobile network will replace its old analog (AMPS) network which at present serves more than 1.5 million users.

Telstra's group managing director, products and marketing, Mr. Lindsay Yelland, said Telstra's decision to build the new network would particularly benefit rural mobile users.

"Telstra plans to commercially launch CDMA in mid-1999 in Melbourne, Sydney, Perth, Adelaide and Brisbane. This will be followed by a rapid introduction commencing the second half of 1999 into regional locations covered by the current analog network.

To smooth the transition from analog to digital, Telstra has successfully negotiated with other mobile operators Optus and Vodafone, along with the government, a strategy for the phase-out of the analog network that will ensure continued mobile phone service and coverage in rural areas.
As instructed by government, Telstra will close the analog network in the five major capital cities and an additional 130 non-metropolitan sites on December 31, 1999. These 130 sites represent approximately one third of all sites outside metropolitan areas.

Telstra will determine the 130 non-metropolitan sites in conjunction with the rollout plan for its new CDMA network and finalize the sites by the end of 1998.

Of the 270 analog sites remaining open after the end of 1999, at least 50 per cent will close on June 30, 2000, and the remaining sites on or before December 31, 2000.

"Telstra's CDMA network rollout will be completed prior to the final closure of the analog network ensuring customers can retain continuity of service during the period of the analog network closure," Mr Yelland said.
"A range of competitively priced handsets will be available closer to the CDMA launch. The handsets are expected to be similar in size and performance to those of current digital phones." The handsets should offer both analog and CDMA coverage.

Telstra has chosen Nortel Networks Australia as its vendor to provide the infrastructure for the rollout of its CDMA network.

The hunt for harmony

Efforts to harmonize the approach to a third generation mobile technology based on CDMA are continuing. In late September, the CDMA Development Group (CDG) submitted a letter to 21 key U.S. government officials, stressing the importance of harmonization for third generation (3G) mobile technologies.

The letter, signed by members of the CDG executive board, detailed the benefits of harmonizing the two leading third generation proposals. It pointed out, said Perry LaForge, executive director of the CDG, that "the presence of multiple second generation technologies was a key driver of growth and competition in the U.S. wireless market, and the significant differences between CDMA, GSM and TDMA still provide an important basis for competitive differentiation. In contrast, W-CDMA and CDMA2000 are nearly identical and will provide little or no basis for competitive differentiation".
He added that supporters of proposals that are clearly different from W-CDMA and CDMA2000, such as those based on TDMA technology, should continue their standardization efforts and should not be expected to converge with CDMA-based proposals. "This approach", he said "is the very essence of the International Telecommunication Union's (ITU) IMT-2000 effort, and also something that the global telecommunications industry is expecting."

This is not to imply that all 3G difficulties have been resolved. Certainly, the perceived lack of flexibility on the part of W-CDMA proponents has brought a strong response from cdmaOne pioneer Qualcomm.
Qualcomm Incorporated has submitted a letter to the ITU indicating that it holds essential Intellectual Property Rights (IPR) for several third generation Radio Telecommunications Technology (RTT) proposals submitted for IMT-2000 based on CDMA technology. Qualcomm confirmed that it is willing to license its IPR with respect to the CDMA2000 proposals submitted by the U.S. Telecommunications Industry Association on a non-discriminatory basis on reasonable terms and conditions in accordance with the ITU's patent policy. However, Qualcomm is unwilling to similarly commit to license its IPR for the Japanese and European W-CDMA proposals, the Korean CDMA II proposal and the US-submitted W-CDMA/NA proposal.

Qualcomm supports achieving a single, converged standard for all proposed 3G CDMA technologies submitted to the ITU as candidates for IMT-2000 and is willing to license its IPRs only on fair, reasonable and non-discriminatory terms for standards that meet a specific set of criteria. These are based on three 'fairness principles' which support convergence of all proposed 3G CDMA technologies.

The fairness principles are:

  1. A single, converged worldwide 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 is either 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.

The ITU will not complete the process of evaluating and selecting submitted proposals unless all essential IPR holders for those proposals either waive all rights to their IPR or commit to license their IPR on a non-discriminatory basis on reasonable terms and conditions in accordance with the ITU's patent policy. It remains unclear how - or whether - this impasse can be resolved.

Operator update

NEC do Brasil has asked us to point out that NEC, not Qualcomm, was the system supplier for Telecomunicacoes do Rio de Janeiro's cellular network. Qualcomm was, in fact, the handset vendor. Our apologies for this oversight.
The following listing for South America should also have been included:

Telecommunicaoes do Estado de Sao Paolo (TELESP CELULAR)
Address: Rua Peixoto Gomide 316, Sao Paulo, Brasil
Telephone: 55 11 3824 5543
Fax: 55 11 288 8764
Network type: cellular 800 MHz
System supplier: NEC
Start-up date: 6 October 1998.

The next listings feature will appear in the May 1999 issue. However, all corrections or additions to the information already published can be sent to us at any time as our records will be regularly updated.