Barely nine months after Nokia Corp. led a base-station interoperability initiative, L.M. Ericsson and other major infrastructure vendors have countered with a new one, indicating a tension in that sector.
The new initiative, known as the Common Public Radio Interface, also includes Siemens AG, Huawei Technologies Inc. and Nortel Networks Ltd.
Just like the Nokia-led group, the CPRI seeks to allow members to make base-station subsystems that can work with each other.
The Nokia-led initiative announced in October 2002 has 25 members, including LG Electronics, Samsung Electronics, ZTE and Intel Corp. NEC is the only company listed in both initiatives, while Motorola Inc., Lucent Technologies Inc., Alcatel Corp. and Hitachi have not joined either group.
“The CPRI industry cooperation enables base-station manufacturers to focus their research and development efforts on their core competencies and to buy selected radio base-station subsystems,” said the companies.
Both initiatives claim to be open, but they are not ready to work together because each pursues a different kind of cooperation.
“If the initiatives are open, why do they have to invite each other?” asked Michael Gillin, president of Atlanta-based Invisible Planet, explaining the initiative accentuates the level of rivalry at play between Nokia and Ericsson.
“It is a vendor-to-vendor competition,” he remarked, adding that because both companies focus on European vendors, it is not a technology-to-technology conflict since both pursue the same market. The U.S. market lends itself to technology battles.
Nokia said it was not aware of the CPRI move before it was announced.
“While we cannot comment specifically on the CPRI initiative as we are not a member, our understanding is that the scope of the Open Base Station Architecture Initiative (launched in 2002) is more comprehensive as it is working for specification of four functional modules and three air interfaces, whereas CPRI is aiming to define only one interface,” commented Nokia spokeswoman Laurie Armstrong.
“Nokia strongly supports open standards and industry initiatives that work toward this goal,” she noted.
The CPRI cooperation is not a proprietary move, according to Mats Thoren, press manager for Ericsson. “This is open, and other vendors are welcome to join,” remarked Thoren.
The CPRI companies believe that the initiative will allow vendors to introduce new technologies more quickly and offer a wider portfolio of products to operators with shorter time to market.
“The operators will benefit from a broader choice of products and more flexible solutions, improving the efficiency of network deployment,” said the founders.
Ericsson believes CPRI will make room for better efficiency, describing OBSAI’s standards as too rigid.
“CPRI achieves a balance between standardization and the flexibility to innovate in base stations,” remarked Rob Elston, spokesman for Ericsson.
Thoren said the effort makes it easier for vendors to have a broader market and access a range of suppliers for base-station subsystems.
“Anyone who uses it can more easily interact and source components from one another,” he said.
He explained that the initiative does not preclude competition among the members because each company will focus on its areas of competence to try to differentiate itself within the market.
Nortel Networks agrees.
“Our opinion is that there is still room for innovation for access technologies,” said Bruce Gustafson, director of marketing relations for wireless networks at Nortel.
He explained that the base station business has not reached a stage to be commoditized as a way to drive down cost and achieve economy of scale. He said the CPRI strategy breaks down the subsystem into elements, standardizes the interfaces and allows each member to decide where they are strong and focus on that, thereby creating a pool of competencies.
He said the division is rooted in CPRI members’ faith in their own intellectual property rights, which allows them not to rely on any company’s move to dominate the space.
The founders said the interface, which will be used for radio base station products in mobile systems, complements existing standards in the industry.
This disagreement seems to focus mainly on infrastructure because the major vendors are working together in other areas, including the Open Mobile Architecture and the recently announced Internet Protocol Multimedia Services initiative.
Gillin said Nokia cooperates with Ericsson in handset-related initiatives, including the Symbian operating system. The Finnish vendor leads the world in handset sales and makes big profits. But its infrastructure unit aches, and the company would need to create room for itself to make money.
Ericsson dominates the infrastructure market and would not like to bow to a Nokia-led move because it might jeopardize its premier position, he said.
“They are just looking for ways to differentiate themselves,” said Gillin.
Nortel Networks has prided itself in its Internet Protocol proficiency, believing that its IP specialization will position it for more market share as the industry moves toward third-generation services.
