Editor:
Quentin Hardy’s article, “Jacobs’ Patter,” in the Sept. 6 edition of The Wall Street Journal claims that “some of the biggest names in telecommunications” have invested perhaps $20 billion based on my promises about Code Division Multiple Access technology. This might be flattering if it weren’t so absurd.
A business reporter should know that companies perform considerable due diligence and do not rely on anyone’s hype or patter before making critical decisions. After such due diligence, 60 percent of the cellular and personal communications services operators in the United States, based on population covered, are now installing or preparing to install CDMA systems.
To support this market demand, more than 40 major manufacturers worldwide have purchased licenses for production of CDMA telephones, infrastructure, and test equipment. Further, on Aug. 26, MCI Communications Corp. announced an agreement to buy at least 10 billion minutes of personal communications services use from NextWave Telecom Inc., a committed CDMA carrier, now the only digital technology poised to provide multiple operator coverage throughout the United States and increasingly around the world.
The statement, attributed to a Stanford professor, that CDMA has “fundamental problems that they don’t know how to solve” is totally incorrect. It would certainly perplex Korea Mobile Telecom, which has added 210,000 CDMA customers from January through August and which is preparing for 515,000 CDMA customers by year end 1996. CDMA does work, is in the market, and makes absurd the quote incorrectly attributed to me “Every other week you wonder, `Does it work? Will it get to market?’ ” My concerns about the technology working were dissipated in our 1991 test period and my concerns about getting to market ended years ago with the failure of U.S. TDMA, the first U.S. digital cellular standard, to gain broad acceptance.
Contrary to the article, I am convinced that CDMA performance promises will be achieved, including capacity gains of 10 to 20 times AMPS (the current analog system), with the highest quality of service. In the first presentation to industry on June 6, 1989, I stated that analysis and computer simulation indicated that CDMA might achieve 40 times AMPS or better. Following analysis of actual field measurements in November 1989, we revised the claim to 10 to 20 and that has remained unchanged through extensive field testing and now commercial deployment. The most recent numbers from Hong Kong, where the systems are not yet loaded to capacity, indicate that our capacity claims for CDMA are on target. They show 11 subscribers per megahertz per base station for AMPS; 85 for GSM; and 283 for CDMA. These figures are all normalized for equal usage per subscriber.
The introduction of commercial service was delayed by the industry decision in early 1991, which Qualcomm supported, to formally adopt a second digital standard, a process that took until mid-1993 to complete. Only then were the various manufacturers able to undertake commercialization, a lengthy process.
It has taken seven years for CDMA technology to move from early concept into commercial use. The rival European technology, Global System for Mobile communications (GSM), required about 11 years to complete its development-to-commercial deployment cycle.
The article incorrectly states that Motorola Inc. pulled out of talks with Sprint Spectrum L.P. because it wouldn’t guarantee that CDMA would work. The issue was not performance guarantees-Motorola had previously agreed to CDMA performance guarantees with PCS PrimeCo L.P.-but rather the large requirements Sprint Spectrum made for vendor financing. Contrary to the claim that major manufacturers produce all technologies, Motorola participates with Qualcomm and others on extensive CDMA testing and then decided not to manufacture U.S. TDMA infrastructure.
Finally, I do not understand why the author twisted and augmented my remarks to attribute to me such absurdities as “the billions riding on CDMA aren’t as significant as the intellectual challenge of the quest” and the partial quote “my friends don’t think I’m a liar” and the strange claim that I arm wrestle with engineers. The real story here is that CDMA, an American technology, is engaged in a fierce international competition with the European technology, GSM, for the world’s wireless markets. In only three short years since standardization, CDMA has already been successful in the United States, Hong Kong and Korea and is making rapid progress in Japan, China, and elsewhere. A “personal attack” story may be gratifying to some, but the business competition in digital wireless communication deserves a balanced report with all sides fairly represented and honestly quoted.
Irwin Mark Jacobs
chairman and CEO
Qualcomm Inc.
CDMA to GSM cost calculation invalid
Editor:
Regarding the article “System cost, not capacity, should drive PCS buildout” in your Sept. 16 issue.
The author makes a great case that the unproven capacity advantages claimed by Code Division Multiple Access over Global System for Mobile communications are irrelevant because, even in 2005, capacity in PCS systems will still be underused by a factor of 10. He correctly concludes that cost for coverage, not capacity, should drive deployment decisions.
But then, when he calculates the cost of a CDMA vs. a GSM system, he divides by the number of subscribers at full capacity! What kind of nonsense is this? How about showing us an apples-to-apples comparison for a given area of coverage without a bogus capacity number tossed into the denominator?
Bill Frezza
President
Wireless Computing
Associates
