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Technology Stocks : NEXTEL

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To: Rono who wrote (9474)11/8/1999 8:24:00 PM
From: Rono  Read Replies (1) of 10227
 
As the only packetized wireless network (that i'm aware of), I was surprised that Nextel was not mentioned in the following article. But then again they always have held their cards close to the vest.

Posted: 11/1999

Taking Wireless to the Next
Level
Will Wireless Data Fly Without a
Packetized Voice Component?
By Fred Dawson

Mobile wireless service providers are at a crucial
point in their migration to data services where their
next moves will profoundly affect their ability to
exploit market demand for Internet protocol (IP)
data- and voice-enhanced services.

As operators of digital cellular and personal
communications services (PCS) networks rush to
implement the first phase of data rollouts across the
country, their focus so far has been on finding
technical solutions that will allow them to migrate as
cheaply as possible from today's typical data rates at
14.4 kilobits per second (kbps) or lower to the rates
of 64kbps, 144kbps and higher that are widely
recognized as essential to long-term success. The
question is whether their migration strategies will
include the relatively painless steps required to put in
place the distributed packet switching and signal
control architectures that could deliver the voice and
other value-added components that will enable
wireless data services to fly in the future.

"For a lot of people in wireless, a future that
incorporates IP has become a mantra, but how to
get there still isn't clear," says Jon Shantz, vice
president of market development at Cisco Systems
Inc. (www.cisco.com). "The big problem with
wireless data standards so far is that they've been all
about making wireless data transport possible
without focusing on creating the distributed
architecture that's essential to providing value-added
services."

The wireless industry is barking up the wrong tree
when it couches its thinking about the evolution to
data in traditional telecommunications terms, agrees
Merle Gilmore, president of the communications
enterprises unit at Motorola Inc.
(www.motorola.com). What carriers should focus
on is "the transition away from circuit
switch-dominated hierarchical architectures to a
distributed IP packet-switched architecture,"
Gilmore says. "This will facilitate a single architecture
capable of delivering the voice services and the data
applications whether you're using GSM (global
system for mobile telecommunications), CDMA
(code-division multiple access) or any of the new
standards that are being proposed."

Cisco and Motorola have teamed on an initiative
aimed at focusing industry attention on this question,
where the goal is to establish a standardized
approach to exploiting packet-based network
technologies regardless of which air interfaces are
used. "Right now we're seeing a variety of pseudo
standard and proprietary approaches beginning to
enter the marketplace, but we haven't seen anything
yet that addresses the need for a unified approach,"
Shantz says, although, he adds, "some of the
bleeding-edge wireless guys are beginning to
understand what the future is going to require."

For example, reports Mark Whitton, director of
CDMA access product management at Nortel
Networks (www.nortelnetworks.com), AirTouch
Communications Inc. (www.airtouch.com), which
has been operating data services longer than most
cellular companies, has begun testing voice over IP
(VoIP) technology. AirTouch, which didn't respond
to a request for comment, has been a leading force in
pushing vendors to develop platforms for the
delivery of higher-speed data.

Sprint PCS (www.sprint.com), too, is thinking about
the larger infrastructure issues surrounding integrated
packet services, possibly with an eye toward
working with Cisco and Motorola and other,
unnamed vendor partners in the initiative. "Anything
that reduces network operating costs, provides for
more efficient transport or adds additional
functionality to the network is very much in line with
our strategic focus," says Keith Paglusch, Sprint
PCS senior vice president.

The migration path to an all-IP infrastructure should
start with creating packet-based interfaces between
the complex operational protocols of the wireless
domain and points of interconnection between the
backhaul network of the wireless system and the IP
cloud common to all IP networks, Shantz says.
"Traffic efficiency is better than 2-to-1 on the
number of calls you can maintain over a T1 or other
connection using packet technology as opposed to
circuit technology," he notes.

Eventually, the goal is to accomplish all the code
translation between the wireless and IP
communications systems right at the base station so
all components of the wireless network infrastructure
are communicating in the language of IP. Somewhere
between these two stages, it will be possible to begin
putting voice signals onto the packet backbone,
allowing carriers to avoid the costs of circuit
switching as they deploy new infrastructure, Shantz
says. "Our intention is to make use of the same
distributed call agent model for wireless IP voice that
we're pursuing in the wireline market," he adds.

New Tricks

Such thinking is new to the wireless industry, where
operators in most areas have their hands full dealing
with the ravages of price competition while they try
to build out their networks. It's now, as new
infrastructure is being built, that the long-term picture
must be understood if people are to avoid paying
potentially devastating penalties in the near future,
warns Matthew Desch, president for wireless
networks at Nortel.

"There's an opportunity for wireless operators to
make sure they don't act like the wireline operators
did five years ago," Desch says. "When the Internet
came along, [wireline operators] saw their business
as providing access and missed the chance to brand
it and provide value-added services, and now they're
rapidly trying to take this data traffic off the
circuit-switched networks so they can actually
deploy services."

Moreover, Desch adds, wireless operators face the
same cost-driven imperatives to move into the
packet networking domain wireline operators are
experiencing. "Data applications are exciting, but the
business case revolves more around cost than
anything else," he says.

"IP technology as a basis for the network is a very,
very cost-effective technology," Desch says. This is
because packet rather than circuit switching is not
only much more cost effective for data, it offers
"great advantage for voice as well."

The good news for wireless operators, as they
consider the vast possibilities of data-based services,
is the equipment they can now turn to support
near-term expansion needs also supports the
long-term migration path they are looking for, no
matter what the ultimate IP architecture turns out to
be. The main barrier to moving forward was
eliminated earlier this year with settlement of
intellectual property issues surrounding creation of a
third generation (3G) migration path that would work
for all the major air interfaces, including GSM,
IS-136 (the digital communications air interface used
by AT&T Wireless (www.attws.com) that relies on
time-division multiple access techniques)
and IS-95 (the leading U.S. PCS deployment
platform based on CDMA).

The key area of dispute was between those in the
GSM sector who wanted to use a CDMA-based
system known as W-CDMA for 3G capabilities and
those, like Sprint PCS, that wanted to go with a
version--CDMA2000--that was backward
compatible with their current IS-95 or CDMAOne
platform. Now, the ability of each side to tap into the
technical foundation of the other allows them to
create a universal standard closer to full
interoperability among various platforms than was
possible before.

Many cellular and PCS companies, including some
that recently launched 14.4kbps, plan to begin
delivering data over mobile wireless networks at
speeds up to 144kbps starting in the second half of
2000. These companies will use a technical
foundation that will allow them to jump to three times
that speed or faster via software upgrades in the
ensuing years. In addition, technical gains on the
mobile side are making possible fixed wireless voice
and data options at even higher speeds, giving
providers an opportunity to compete head-on with
wireline service providers in the high-speed data and
voice markets.

"The systems won't be completely converged in the
sense that they are exactly identical, but they'll be
close enough to support interoperability among
various iterations of these systems with multimode
phones," says Nortel's Whitton. Moreover, he says,
CDMA2000 specifications have stabilized to where
vendors can develop prototypes for demonstrations
and market tests while they wait for the final specs to
emerge.

Such demos are generating orders for
second-generation IS-95 systems at an accelerating
pace worldwide, promising a demand-driven cost
curve that should make it cheaper for U.S.
companies now using first-generation gear to
upgrade to state-of-the-art second-generation
products. The second-generation products will offer
higher capacity and greater coverage from a base
station module or frame than first-generation
systems. "We're starting to see a lot more capacity in
the orders for buildouts now," Whitton says.

A Different Angle

Sprint PCS, for example, now in the third phase of
its nationwide buildout plan, is pushing these new
base stations into previously uncovered rural areas
and into market cores where the need to handle a
higher volume of traffic is the driving factor, notes
Michael Robinson, vice president and general
manager for network services at Sprint PCS. "In
some cases we're leaving the old base stations in and
just adding the new ones, but in other instances we'll
take them out and use them somewhere else,"
Robinson says.

Once these new base stations are in place, the IS-95
data migration strategy involves a two-step
implementation of CDMA2000 technology that
starts with insertion of new circuit cards in the
second-generation base stations, which push the
data carrying rate to 144kbps. These cards change
the frequency allocation per radio frequency (RF)
carrier from 1.25 megahertz (mHz) to 5mHz and, in
that sense, are 3G compatible, but they retain the
channelization configuration of the previous
generation system, thereby allowing the use of
existing handsets.

With these 1xRTT (radio transmission technology)
circuit cards installed in today's second-generation
base stations, carriers will be able to download
software to support an upgrade to full 3G or 3xRTT
implementation, which will operate at speeds in
excess of 384kbps on the mobile side and as high as
2 megabits per second (mbps) over fixed links.
However, users will have to buy new handsets to
capitalize on these capabilities.

"We're on target to move to the [144kbps] data
rates by the last quarter of next year or early in
2001," Robinson says. The move to full 3G capacity
will probably follow within another year beyond that
time frame.

Flying in Formation

Now that the key intellectual property issues are
resolved, the mobile wireless industry has an
opportunity to make significant headway toward the
goal of harmonizing the CDMA platforms comprising
the two versions of 3G, notes Wendy Fulk, vice
president of marketing and communications for
CDMA systems at Ericsson Inc. (www.ericsson.se),
which acquired Qualcomm Inc.'s
(www.qualcomm.com) IS-95 base-station systems
business as part of the compromise on the standards
issue. "We're taking the approach of looking at both
W-CDMA and CDMA2000 and trying to avoid
doing two separate product designs," Fulk says.

Over the past couple of months, this process has
revealed many common areas and led to a tightening
of the development schedule for Ericsson's 3G
products, she adds. "When you look at the types of
services people are talking about introducing in
Japan and Europe--video e-mail, for example--you
realize we're not overstating the case for 3G."

Wireless operators in Asia and Europe have been
more aggressive than U.S. operators in bringing data
services to market, and now the market response is
pushing them to higher speeds. GSM operators in
Europe, with new frequencies to work with in getting
3G-level services off the ground, are gearing up for a
jump to 384kbps data rates as soon as the
standards-based gear can get to market.

Nortel sees late 2001 as a reasonable timeframe to
expect the fully loaded, standardized version of
W-CDMA to enter the market, Whitton says. "3x is
less certain," he adds.

1x appears far more certain than 3x, as Nortel and
its competitors race to get product to market as
quickly as possible. "1x is so powerful, people may
stay with it awhile," Whitton says.

So far, though, the entities moving fastest toward
fulfilling the packet infrastructure vision
articulated by Cisco and Motorola are those tied to
the W-CDMA framework, also known as universal
mobile telecommunications system (UMTS) .
Spearheaded by AT&T Wireless, British
Telecommunications plc (www.bt.com), Telecom
Italia (www.italia.it) and Rogers Cantel Inc.
(www.rogers.com) with participation by many major
vendors, the new group, 3G.IP, wants to ensure that
next-generation wireless services such as IP voice,
high-speed data
and videoconferencing are based on an architecture
that uses an evolved implementation of general
packet radio system (GPRS), the packet-based
communications system that generates operations
commands to the base stations, controllers and other
network components of GSM and TDMA
networks.

This is a start, says Cisco's Shantz, but without
major tweaking, the strategy will not work for the
IS-95 sector. "We're trying to decide whether the
best approach for us is to try to persuade this group
to include refinements that would make 3G.IP meet
our goals or to move along a separate track," Shantz
says. Motorola, as a member of the 3G.IP group, is
closely monitoring its evolution, but so far, no formal
dialogue has beenestablished between the two
camps, he adds.

The risk is the wireless industry could end up with
multiple ways of interfacing the packet-networking
domain with the wireless infrastructure, making it
difficult for suppliers of gateways, call-agent
controllers and other enhanced-service components
to build equipment cost effectively for the wireless
sector. With the industry so close to getting on a
track that would move it in tandem with the wireline
transition to packet communications, failure to take
this step would appear to be an untenable option.

Shantz isn't sure yet the light will go on. "It really
depends on whether the guys who understand this
can get through to the top decision makers," he says.
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