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ITU SAYS 3G HARMONIZATION RESTS WITH CARRIERS

NEW ORLEANS-International Telecommunication Union members did not reach any consensus in
Kuala Lampur, Malaysia, on harmonizing the various radio transmission technology proposals received by the ITU for
third-generation technology.

The ITU has decided harmonization efforts will rest with carriers and has asked them
to put pressure on vendors to harmonize the standards. Carriers are set to meet in the next few weeks in London to
discuss convergence in a meeting similar to one held in Beijing early last month involving 14 operators from Asia,
Europe and the United States.

Carriers remain split over the chip-rate issue concerning two main Code Division
Multiple Access RTT proposals-W-CDMA and cdma2000. W-CDMA technology, based on Global System for Mobile
communications technology, uses a higher chip rate than cdma2000 technology, which is based on today’s cdmaOne
systems. W-CDMA backers are unwilling to move the chip rate below 3.84 Megachips per second, citing capacity
reasons, while cdmaOne operators say the chip rate cannot move above 3.68 Mcps and stay backward compatible with
today’s cdmaOne systems. Many European operators at the Beijing meeting proposed to compromise by offering a
multiple chip rate that allows the use of both rates through multimode handsets. Many cdmaOne operators remain
strongly opposed to this solution, saying it adds unnecessary costs to handsets.

Throwing another wrench into the
debate, Ericsson Inc. Vice President of Public Affairs John Giere said Ericsson, which backs W-CDMA technology,
has abandoned its compromise it offered in December to move the chip rate from 4.096 Mcps to 3.84 Mcps to allow for
dual-mode handsets. The majority of its customers want the 4.096 Mcps chip rate, he said. It’s unclear what European
operators’ stances will be at the next carrier meeting.

Giere said Ericsson will move ahead building W-CDMA
networks despite the threat of legal action from Qualcomm.

“Ninety-nine percent of the marketplace is
moving on,” he said. “We’re going forward with contracts. My prediction is that by the end of the year, IPR
will be a non-factor.” Intellectual property rights involving GSM technology were not resolved when the first
systems were deployed, he said.

Qualcomm Inc. and Ericsson are locking horns over 3G IPR. The two claim to hold
patents to both CDMA standards and will not grant them unless certain conditions are met. Qualcomm wants one
CDMA-based standard while Ericsson wants multiple standards and reciprocal licensing.

The ITU held an IPR
meeting earlier this month in Kuala Lampur to obtain industry advice on the best way to proceed with 3G
standardization in light of the IPR standstill. A report was sent to the director of the Radiocommunications Bureau
offering advice on how to proceed. Though ITU rules require the process to stop if IPR issues are not resolved, the
majority of members want to proceed with technical work, says the ITU.

The chip-rate issue remains a politically
charged debate as cdmaOne operators will easily migrate their systems to cdma2000 technology with the 3.68 Mcps
chip rate, while migration from GSM technology will take more equipment regardless of which chip rate is chosen. For
vendors, billions of dollars in infrastructure are at stake.

Sam Ginn, chairman and chief executive officer of
AirTouch Communications Inc., said in an interview with RCR that AirTouch and U.K.-based Vodafone plc, which
announced last month plans to purchase AirTouch, are backing one chip rate. But it remains to be seen which chip rate-
3.84 Mcps or 3.68 Mcps-the new company will primarily support, he said. Backward compatibility with AirTouch’s
cdmaOne network could be achieved by making one chip with both the 3.84 Mcps and 3.68 Mcps rates on it. One chip
can be made if the two rates are within a 10 percent difference, said Ginn.

Vodafone’s and AirTouch’s merger will
make them the largest wireless operator in the world, and the two will have the ability to leverage their massive
holdings to buy equipment at significant savings. Analysts believe the two are key to whether the two CDMA standards
are converged, since they hold a strong leverage over equipment vendors. However, the European Telecommunications
Standards Institute continues to push ahead with W-CDMA technology and European operators seem to be staying on
course with ETSI.

Moreover, U.S. Time Division Multiple Access operators say they favor a family of standards
concept and don’t want their TDMA 3G proposal to be converged into one standard.

The ITU in June received 16
different RTT proposals, the majority based on CDMA technology, from standards bodies and other groups from
around the world. Its goal is to develop a single worldwide 3G standard that facilitates global roaming and allows high-
data rates for Internet access and video services. It wants to decide on key characteristics for the radio interface by
March 31.

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