By Vaughan O'Grady
The first CDMA World Congress discussed a technology just out of the starting blocks. Now cdmaOne is up and running. What issues have come to light over the last 12 months?
Last years modest turnout for the first CDMA World Congress gave way to an altogether more substantial 800 delegates at the June 1997 event.
The emphasis was, naturally, on IS-95 and the CDMA Development Group could be said to have hit the ground running, offering two announcements guaranteed to have an early impact on the show. The first brought together Lucent, Motorola, Nortel and Qualcomm to announce plans to work together, with the CDG and with standards bodies worldwide, to develop specifications for the next generation of wireless communications standards and with special reference to IS-95 compatibility. As Scott Erickson of Lucent pointed out: "Last year we were just announcing the earliest developments. Now there are 50 networks and we can talk about where were going with next generation technology." This statement will be welcomed not least by the operators of those networks.
The second announcement was of the branding of the IS-95 family of products
and services as cdmaOne, a development Perry LaForge, the
Executive Director of the CDG discusses in columnOne in this
Matt Desch of Nortel began the afternoon with a call
for next years conference to help operators to differentiate themselves
in a competitive
Mark Lowenstein of the Yankee Group in his review of the global market for CDMA, flattered to deceive slightly. He remarked that subscriber growth in wireless "shows were all in the right industry" one that could be worth more that $500bn by 2000 and 50% of which would, early next century, be in the Asia Pacific region. However, US analog cellular operators can temporarily relax: price is still the main influence among cellular customers on whether to switch to digital. Its a good time for wireless local loop though, especially if trials go well in China and India, but in any case, Lowenstein remarked, WLL is helped by the fact that "were turning a corner in terms of lower costs."
How about the financial prospects for CDMA? Analysts tend to be careful in their pronouncements, so while Alex Cena of Bear, Stearns and Co remarked that "CDMA is very early in its product lifecycle and so a tremendous opportunity," his colleague on the second afternoons financial panel, Cecelia Brancato of Jennison Associates made it clear that "innovative technology in itself does not spell success" and that people dont always buy the best. Superior marketing skills still matter, she added.
A Lehman Bros representative discussed would-be investors
in CDMA in the US: were they jittery at the new technologys prospects,
one wondered? Future operators may have the successful licensing and financing
of Sprint PCS to thank for easing market uncertainty, he suggested.
The sky is not the limit, apparently, for cdmaOne. The main name in low earth orbit satellite promotion of CDMA is, of course, Globalstar. Doug Dwyre went over the problems inherent in setting up a system. These include type approval, developing equipment, operating licenses, standards approval and dealing with various regulatory groups. All these aside, a continuing problem is the fear of local PTTs that their network is somehow going to be bypassed.
Handsets are proving tricky too. Three are on the cards: Globalstar alone; Globalstar with AMPS and CDMA; and Globalstar with GSM. Nevertheless, and not surprisingly, Globalstar is happy with its progress and believes it will be seen as the best priced system when GMPCS hits the market. It also has had an influence on terrestrial events, as the final days presentation from Qualcomm made clear. As part of the Globalstar system design, a satellite-based CDMA air interface to the GSM network has been developed. This will be influential in planned CDMA/GSM integration trials carried out by Qualcomm and Vodafone (both founding partners of the Globalstar project) later this year.
Ameritechs Joe Cruise discussed making services attractive to the subscriber. He reminded listeners that voice was clearly a service but that other offerings should not be seen as add-ons or free extras. They too should be looked at as individual services and marketed as such. Giving away caller ID, say, could send the wrong message to customers and force the carrier to pay for it and the next giveaway, and the giveaway after that. Expect this theme to come up again next year.
Japan is a source of fascination for most of the wireless industry and cdmaOne is no exception. DDIs representative was clear on the advantages of IS-95 in a country facing "explosive growth", not to mention increasing demands for high speed data, all of which, he suggested, implied enhancement of the IS-95 system and harmonization of IS-95 with whatever becomes the next generation system. Evolution, not revolution was the plea.
If cdmaOne needed any further proof that it now strides a world stage, the admission from Dr Raimund Walsdorf, project Manager of Germanys T Mobil that as a global operator his company needed to know the various systems available and how to operate them woud have been heartening evidence. Also, he added, next generation systems, even in Europe, may have a CDMA component. Thus T Mobil had trialed the technology in its own backyard. On the downside, he felt that such trials had partly been necessitated by "controversial" presumably, inconsistent information on coverage, capacity and quality from those already in the market.
The trial proved useful, it seems. Coverage predictions were met, although prediction of soft handoff areas proved difficult. Dr Walsdorf concluded that "the system works well but needs optimization to the environment" which, he suggested, was not an easy task. The findings on decline in voice quality with increasing load might be worth studying as might the need to reduce soft handoff under high load. Although T Mobil argues that "system stability and performance need to be proven", the company emphasizes that the CDMA air interface enjoys a number of advantages, that CDMA will have a role in future generations of digital systems and, most important, that GSM is no longer alone in the digital race.
Which is, to a large extent the message of the 1997 World Congress. And next year? A rough prediction would be that data, third generation and roaming will be high on the agenda, that the extraordinary inroads made by wireless local loop will be next years feelgood factor and the challenge of so-called wideband and broadband alternatives next years attack of nerves. More likely though, the discussions will be those of a mature wireless technology: how to keep customers. Churn, new services, differentiation, cellular versus PCS all these could make for an even livelier 1998.