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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 year’s 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 we’re 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 issue.

On the first day, the feeling was, not unreasonably, one of self-congratulation, Session Chair Tony Hennen of Motorola talked about the enormous opportunities for CDMA in Asia, how CDMA systems could well boast five million subscribers by the end of this year, planned CDMA trials in China and the vast potential of markets like Brazil. More important, he argued, was the potential of wireless local loop, a strongly emphasized theme throughout the conference.

An early speaker was PrimeCo’s Technical Director, Dr Ali Afrashteh who talked about the challenges of leveraging a PCS network in North America. One point he strongly underlined was the need for negotiation and innovation in siting cell sites. PrimeCo’s experience indicated that alliances with public utilities and willingness to co-locate are advantages.

Korea was a trailblazer for CDMA and local networks are enjoying a fair amount of success but, as Dr Sang Chul-Lee of new CDMA operator Korea Telecom Freetel argued, things are going to get tougher for incumbent operators from 1998 when the WTO agreement should usher in a lot more competition.

That networks still face regulatory problems was emphasized by Finbarr O’Kane of Mobile One Asia which will be Singapore’s first CDMA network. He cited problems with the RF propagation environment in Singapore’s residential blocks: 10 stories, all close together and with no antennas permitted on blocks next to roads. Other obstacles included the possibility of deviation from predicted traffic patterns, the roaming question, the need for more field testing equipment for the industry and handset interoperability and availability. Conclusion: Mobile One has had a variety of challenges but CDMA will nevertheless be a great success in the country. The launch date is still under study.
At a panel discussion involving the morning’s speakers, the question of multi-mode phones was met with a measured response. CDMA/analog? Yes, probably. CDMA/GSM or CDMA/ TDMA? It might be interesting, said O’Kane, but Dr Ali Afrashteh and others were unsure whether drivers existed for such phones.

It was no surprise to hear panel calls for backward compatibility when third generation came up. A move to wideband could also help, said Dr Afrashteh, where minutes of use and subscribers are pressuring the network and handoff problems could occur. Data, said Dr Lee is the service that needs to be upgraded first.

The generally positive tone resumed throughout the afternoon of the first day as Scott Erickson reviewed the progress towards over 50 networks and declared: "We have proved it’s a viable technology."

Dr Se Hyun Oh discussed SK Telecoms’ progress and plans to go global. He made some useful points for newer operators on his company’s success in targeting high usage customers via direct mail and telemarketing in an attempt to encourage migration from AMPS.
"In 17 years, none of our digital platforms have stabilized as quickly as CDMA", said Craig Farrill of AirTouch in an address on the technical benefits of deployment. He cited battery life and protection from cloning as being high on the customer satisfaction list. In answer to a questioner he agreed that international roaming is one of the top two issues the industry was concerned about.

Wireless local loop dominated the second morning’s session; a look at some of the issues and opportunities it can offer CDMA appears on page 35.

Matt Desch of Nortel began the afternoon with a call for next year’s conference to help operators to differentiate themselves in a competitive
environment. He cited, as did many speakers, voice quality as a major differentiator of CDMA from other systems. Data was also often mentioned as another strong point of the technology.

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 we’re 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. It’s 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 "we’re 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 afternoon’s financial panel, Cecelia Brancato of Jennison Associates made it clear that "innovative technology in itself does not spell success" and that people don’t 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 technology’s prospects, one wondered? Future operators may have the successful licensing and financing of Sprint PCS to thank for easing market uncertainty, he suggested.
The unveiling of new or planned handsets made it clear that smaller, lighter, longer talk times, easier use and cost reductions are still the main buzzwords. Tri-mode terminals (across CDMA and AMPS) will become a more common offering. And Siemens and Nokia are the latest entrants to the CDMA handset business.

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 day’s 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.

Ameritech’s 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. DDI’s 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 Germany’s 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 year’s feelgood factor and the challenge of so-called wideband and broadband alternatives next year’s 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.