NMT 450 operators are to decide by early October whether to push forward with three digital mobile-phone standards that include CDMA technology, which could give cdmaOne technology its first entrance into Europe.
The NMT MOU Digital Interest Group (DIG)-an assembly of operators tasked with evaluating various digital technologies for the 450 MHz band-recommended in early September at a plenary meeting in New York that NMT MOU members be allowed to choose from three digital technologies: GSM, CDMA and TETRA.
The need for digital service is clear to many European NMT 450 operators. Subscriber bases are declining because these operators can’t compete with their GSM counterparts by offering analog services. Analog networks and handsets have become uncompetitive.
The DIG believes each technology has benefits for different operators. For example, many NMT 450 carriers already operate GSM 900 and 1800 systems and are likely to migrate their NMT 450 systems to GSM technology to leverage economies of scale and coverage.
Others that don’t operate GSM systems, primarily in Russia and other parts of Eastern Europe, are taking a serious look at CDMA technology either for market differentiation or capacity reasons.
Eastern Europe is the only region where NMT 450 usage is growing. Customers have significantly declined in Western Europe, where customers prefer digital GSM services.
According to U.K. research group EMC’s World Cellular Database, almost 100,000 new customers signed up for NMT 450 service in Eastern Europe during the first half of this year, while more than 150,000 Western Europeans switched from NMT 450 to other systems. Sixty percent of the world’s existing NMT 450 customers are in Eastern Europe.
Growth is most notable in Bulgaria, where one-third of all new NMT 450 subscribers signed up, and in Russia, which accounted for a further 30 percent. However, this is overshadowed by the 4.67 million new GSM subscribers in the region who have signed up since the beginning of the year, accounting for more than 95 percent of overall growth. An almost equally high percentage are GSM 900 users.
This is why Westel Radio Telephone in Hungary is interested in CDMA technology.
“It’s very important because we need to compete with three GSM service providers,” said Galsi Eistvan, technical director of Westel. “We have about 100,000 subscribers, and we are competing with analog … We are a growing company, and if this goes well, we are going to continue growing in two more years. It’s very important for us to introduce digital service in 2001.”
Romania’s TeleMobil, which supports 20,000 customers, became successful selling analog service within the last eight months by repositioning itself as the most affordable service in the market, adding a sleeker, more attractive handset and implementing new call and billing centers.
“One of the biggest issues most operators in Eastern Europe are facing is the capacity issue,” said Diwarker Singh, managing director and chief executive officer of TeleMobil. “CDMA seems to be the ideal and preferred option in terms of technology and the capacity that it offers … I firmly believe that CDMA will come in earlier than GSM 450. The issue that decides who goes for what will be the roaming issue.”
Lucent Technologies and Qualcomm have told the NMT MOU they are committed to making CDMA equipment for the 450 MHz band. Since operators have indicated their desire to deploy digital service in the 2001 time frame, Lucent’s plans include offering an IXRTT CDMA system capable of roaming with GSM mobile-phone networks. Qualcomm will provide the handsets. The Telecommunications Industry Association approved IXRTT, the first phase of cdma2000, in July.
Other Eastern European and Russian NMT 450 operators have voiced interest in banding together to allow CDMA roaming.
Nokia and Ericsson-the primary NMT 450 network suppliers throughout Europe-have said they support the European Telecommunications Standards Institute’s work on a global standard for GSM technology in the 450 MHz band. ETSI earlier this year adopted the plan as a work item.
Nokia Mobile Phones, however, said it has not ruled out manufacturing NMT 450 handsets for the CDMA band.
“If operators choose to take this route, we will evaluate the opportunity,” said Megan Matthews, spokeswoman for Nokia Mobile Phones.
Motorola is backing TETRA technology, which the vendor already is deploying in other parts of Europe. Some NMT 450 operators believe TETRA handsets may be too expensive.
While GSM technology is the mandated standard in Europe for mobile-phone networks, NMT 450 operators are in a unique position to introduce the technology there because they don’t fall under the auspices of ETSI, and the EU doesn’t control Eastern Europe. The NMT MOU historically has created its own analog standards.
However, some NMT 450 operators never received permission from their telecommunications ministries to migrate to digital technology. Companies like Westel will have to convince the regulatory bodies to allow them to migrate to digital service and hope the ministry doesn’t mandate a certain technology. Political obstacles to CDMA technology in Europe will depend on the country and regulators, said Singh.
“We are not part of the EU, and our license gives us the option to choose any digital technology,” he said. “That may not be true for other licensees.”
Global Wireless correspondent Paul Golden contributed to this article.
