Third-generation technology has become a sensitive issue in Japan as the U.S. government pushes for free technology choices there and Qualcomm Inc. possibly ponders applying for a Japanese 3G license.
The sensitivity stems from a plethora of Japanese newspaper reports indicating that all three companies likely to obtain a 3G license from the government will deploy wideband Code Division Multiple Access technology. This includes CDMA operator DDI Corp., which plans to take over IDO and KDD in October. NTT DoCoMo and Japan Telecom Group, two other operators almost guaranteed a license, have publicly chosen W-CDMA technology. This means Interim Standard-95-based technology threatens to be shut out of Japan.
Though the Japanese press declared W-CDMA technology as DDI’s choice, DDI has yet to decide on a technology. The U.S. Trade Representative, at Qualcomm’s prodding, issued a letter to the Japanese Ministry of Posts and Telecommunications earlier this month, saying it feared the Japanese government was pressuring operators to pick one technology over another.
“There’s some concern that the MPT might be sending a signal that they weren’t going to look as favorably upon other standards such as multicarrier mode (cdma2000),” said one government official who declined to be named.
The MPT is expected this week to issue its response to the U.S. government’s requests, which asked for the MPT’s written assurances that applicants for 3G licenses will not be disadvantaged if they choose technology other than W-CDMA.
In particular, the USTR is asking for the MPT not to require 3G applicants to specify which technology they plan to use or allow applicants to specify several IMT-2000 standards and whittle down their choice later.
“The narrow choices operators and equipment manufacturers may now perceive as being acceptable to the MPT risk locking in technology choices that may not reflect long-term market demand and efficient use of spectrum,” wrote the USTR.
The Japanese government in September accepted both W-CDMA and cdma2000 technologies as 3G standards.
“We just wanted to make sure there wasn’t any undue pressure exerted by the Japanese regulator and that carriers have an open choice,” said Jennifer McCarthy, director of Qualcomm’s international government affairs. “Qualcomm is not concerned about W-CDMA vs. cdma2000.”
But if DDI chooses W-CDMA technology, Qualcomm may apply for a 3G license with partners or invest in other operators to ensure the survival of IS-95-based technology.
“We’re trying to find out how the whole 3G market will shake out,” said Anil Kripilani, Qualcomm’s senior vice president of technology and marketing. “We won’t do anything that creates issues. We’ve always invested in carriers or other companies that would help promote CDMA … That model is not a new one.”
Japan’s CDMA operators may not be the only ones looking to make a technology switch. South Korea’s CDMA operators also are said to be considering a technology change to W-CDMA technology.
“We believe the decision to stray from the cdmaOne evolutionary path is largely being influenced by the fear of being a cdma2000 `island’ in the midst of what could be large-scale adoption of W-CDMA technology in the GSM-dominant regions of Europe and Asia,” said analyst firm Warburg Dillon Read in a recent report.
CDMA advocates say it’s too early to tell what operators are going to do.
“There’s a lot of political positioning now,” said Perry LaForge, executive director of the CDMA Development Group. “We’re in the neophyte stages of what people are deciding to do.”
“Things are still shaking out in Japan and Korea,” said Qualcomm’s Kripilani, who noted that many carriers are studying different ways to implement W-CDMA and cdma2000 technologies. “We are truly supporting all technologies, while at the same time pushing IS-95 with investments.”
Whether Qualcomm could even secure a license in Japan is unclear since most experts believe the Japanese government is keen on giving incumbent operators the new licenses. Others note the U.S. government could cry World Trade Organization foul with Japan.
