The International Telecommunication Union has yet to decide on the air interface for third-generation mobile phone technology, but many vendors are pushing ahead anyway with GSM-based wideband CDMA technology.
The Geneva-based international standards body is mulling through 15 different proposals, the majority based on CDMA (Code Division Multiple Access) technology, and is likely to approve a family of standards that will allow for global roaming. Third-generation technology promises sophisticated services like high-speed data rates that include Internet access and full-motion video services.
Many vendors are clearly putting a stake in the ground and are pushing ahead with W-CDMA technology, despite warnings from cdmaOne innovator Qualcomm Inc., which indicates it holds key intellectual property rights to W-CDMA technology and will not grant licenses unless the standard is converged with the cdmaOne 3G version, cdma2000.
W-CDMA technology as proposed today provides a higher chip rate than cdma2000, and its backers say convergence with cdma2000 will degrade the standard. Convergence supporters like Qualcomm, Lucent Technologies Inc. and U.S. cdmaOne operators say the two standards are nearly identical and should be combined to provide economies of scale worldwide. L.M. Ericsson of Sweden claims Qualcomm does not hold key IPRs to W-CDMA technology, and convergence backers claim the technology was designed to specifically bypass Qualcomm’s IPRs.
Meanwhile, Ericsson and Nokia are garnering contracts to test W-CDMA systems. Nokia recently announced a test system in China that will begin in 1999. Ericsson plans to deliver W-CDMA systems to Telecom Italia Mobile in Italy, German operators Mannesmann Mobilfunk and T-Mobile, as well as Swedish operator Telia.
Japan Telecom, which reportedly has formed a joint venture with AirTouch Communications Inc. and Nissan to bid for 3G spectrum in Japan, is expected to receive an experimental system from Ericsson this year. NTT DoCoMo, Japan’s largest cellular operator, has been working with Ericsson and other vendors on an experimental system. DoCoMo, suffering from network-capacity problems, is expected to become the first to deploy a commercial 3G system.
Nortel Networks and Matsushita Communication Industrial Co. Ltd. (Panasonic) recently entered into an alliance to collaborate on W-CDMA market development and deploy a series of experimental networks, services and terminals.
Many Japanese manufacturers, determined not to be pushed out of the world’s markets again, are moving ahead full force with W-CDMA technology. Japan has been a limited player in the world’s markets so far because the country’s second-generation digital standard, PDC (Personal Digital Cellular), is isolated from the rest of the world’s standards.
NEC Corp. recently made aggressive moves into the W-CDMA arena by establishing a subsidiary in Singapore that will design and develop hardware and software for W-CDMA base-station systems. Earlier this year, the company created a joint venture with ERA Technology Ltd. in the United Kingdom to develop W-CDMA infrastructure for the European market.
According to a Warburg Dillon Read L.L.C. report, NEC had a 9-percent share in the global cellular infrastructure market in 1997. The manufacturer hopes to attain worldwide sales of US$3.7 billion in the W-CDMA business by 2005. NEC reported net sales of US$12.6 million for fiscal 1998 from its communications and equipment business segment.
Chipset makers, too, are committing themselves to W-CDMA technology. DSP Communications Inc. in California, United States, said it has begun developing W-CDMA chipsets.
W-CDMA backers “are not going to stop development and wait for the IPR to get resolved,” said Jeffrey Schlesinger, senior wireless technology analyst with Warburg Dillon Read in New York. “Everything you see today is posturing for who is going to get paid what. The letters, the threats are the same thing we saw with GSM. The (intellectual property rights) didn’t get resolved until the first systems had gone out … There’s already a precedent set.”
Qualcomm claims to hold key IPRs that include soft handoff and power control-features vital to W-CDMA technology. In letters to Japanese and European standards bodies and the ITU, Qualcomm said it only will grant its IPRs if convergence with cdma2000 is achieved. The ITU has vowed to drop by 31 December any standards that have unresolved IPR issues attached.
Warburg Dillon Read suggested in a recent report that NEC and others could form an alliance with other W-CDMA vendors to prevail over Qualcomm with the threat of simultaneous cross-border litigation.
Meanwhile, Qualcomm and Ericsson are involved in a lawsuit in the United States over soft-handoff patents key to current cdmaOne systems. The two are set to go to trial in February in a Texas court. The outcome of the trial could impact who holds what patents to W-CDMA technology as well.
But the IPR threat doesn’t seem to be heeded by carriers around the world.
Perry LaForge, director of the CDMA Development Group in California, said the ITU’s 31 December rule puts a “huge cloud over W-CDMA … People, I believe, don’t understand IPR.”
Lawsuits could stop W-CDMA technology, he said, while cdma2000 networks could have a headstart in the market.
