If there is any hope second-generation CDMA technology will penetrate Europe, it may be through some struggling NMT 450 operators.
The NMT MoU group, consisting of NMT 450 operators from Europe and Asia, wants members to vote at its October meeting in St. Petersburg, Russia, to choose digital standards. CDMA, GSM and Digital-NMT (D-NMT) technologies are among the candidates for digital systems that operators likely will commercially deploy in 2001.
Jim O’Connor, secretary of the NMT MoU Digital Interest group and executive director of engineering and operations for Media One International, believes migrating to digital will revitalize the NMT 450 market. NMT 450 networks generally have stronger geographical coverage than their GSM network counterparts. This coverage will become valuable once operators introduce third-generation services.
In many Western European countries, NMT 450 operators are currently struggling to add customers, and some have abandoned their licenses altogether as customers prefer the features of digital GSM 900 and 1800 services. Analog subscriber growth is fairing better in Eastern European countries such as Bulgaria, where the number of Mobikom’s NMT 450 subscribers increased 111 percent from December 1997 to December 1998. Growth in Asia has been slow as well.
“One of the reasons for the decline in subscriber bases is because the competition from digital provides more services supported by several vendors,” said Vera Kripilani, senior director with Qualcomm, a member of the specification group working to standardize CDMA technology within the NMT MoU. “Moving to digital will make these operators competitive, and it would allow them to get more capacity from their frequency spectrum.”
O’Connor said the drive to digital also stems from the high handset subsidies carriers must incur to offer service. The cost for analog infrastructure is not competitive, and network quality pales compared with GSM networks.
Though the majority of NMT 450 operators also own a GSM 900 license and likely a GSM 1800 license, many analysts believe they will migrate their NMT 450 networks to GSM technology as well to leverage economies of scale.
Nokia and Ericsson said they support the European Telecommunications Standards Institute’s (ETSI’s) work on a global standard for GSM in the 450 MHz band. ETSI recently accepted that plan as a work item.
However, O’Connor believes CDMA technology has a fighting chance in Europe.
“CDMA has a shot for this market,” he said. “Part of the attractiveness of 450 is that it is a different product. It has to be marketed differently [than GSM service]. You have to have something else on the shelf so you can get more subscribers.”
Qualcomm, Samsung Electronics and Hughes Network Systems are trying to standardize CDMA technology under the auspices of the NMT MoU rather than going through ETSI, the European standards body, which some U.S. manufacturers have accused of locking second-generation CDMA technology out of Europe.
Radio Design, a Sweden-based company, is also working to standardize the D-NMT standard-similar to D-AMPS, or TDMA, in the United States-under the NMT MoU. This technology would allow operators to take analog channels out and replace them with digital channels without changing the channel scheme.
“Qualcomm is not going to standardize this through ETSI, and I think we have a process where that is acceptable,” said O’Connor. “The MoU itself has maintained the analog specification because we wanted to make the NMT world easier to handle.”
Qualcomm is pushing two versions of CDMA technology-one based on GSM-MAP and the other on ANSI-41. O’Connor said most operators are interested in the standard based on GSM-MAP, which derives from Qualcomm’s CDMA/GSM hybrid network it tested in conjunction with U.K. cellular carrier Vodafone last year. The field trial demonstrated the compatibility of the IS-95 CDMA air interface with GSM networks. The NMT MoU has asked ETSI to give Qualcomm permission to reference ETSI GSM specifications.
Qualcomm, however, cannot make the infrastructure since it sold its vendor unit to Ericsson in late March. It’s unclear if Ericsson is interested in the concept.
“The uncertainty around the Qualcomm infrastructure will have to be resolved before people continue to think about CDMA,” said O’Connor.
It’s unlikely NMT MoU members will choose only one standard since each technology has benefits for different operators, said O’Connor. For instance, D-NMT and CDMA technologies allow for dual-mode handsets for analog roaming, while the GSM specification has not included this feature. However, NMT 450 customers could roam on existing GSM 900 networks.
