CDMA emerges as Asia's choice for
3G services
By Sunray Liu
EE Times
(06/16/00, 12:04 p.m. EST)
HONG KONG ? Asian telecommunications companies are poised to
launch services based on the cdma2000 third-generation (3G) wireless
standard. The cdma2000 technology is designed to increase data
transmission rates under the 3G umbrella and is viewed as an interim
step to full 3G wireless nets.
At the CDMA World Congress here this past week, China's No. 2
telecommunications carrier, China Unicom, confirmed it is adopting
Qualcomm Corp.'s 3G solution, while South Korea's SK Telecom said it
would launch the first commercial 3G service based on the standard in
October. And Japan's DDI Corp. announced that it began offering a 3G
solution in May.
China Unicom has about 10 million Global System for Mobile (GSM)
subscribers. Solely authorized by China's State Council to build and
operate a domestic code-division, multiple-access network, Unicom
signed a framework agreement with San Diego-based Qualcomm in
February to construct a nationwide CDMA network. Unicom plans to
establish a network supporting 10 million subscribers by the end of the
year.
The deal was delayed recently because of official concerns about the
cost and timing of China's new nationwide wireless telecom network.
But during a promotion for its upcoming stock offering, Xianzu Yang,
Unicom's chairman and chief executive, confirmed the company is
standing by its agreement with Qualcomm.
"We'll conduct CDMA trials in several selected cities next year," Yang
said this past week by video link from London. The huge trial,
encompassing tens of cellular basestations, will move from narrowband
IS-95A directly to cdma2000 1X multiple carrier technology. Unicom
owns a system that is twice the capacity of existing GSM systems
operating on 1.25 MHz channels. It plans to increase the data rate to
2.5 Mbits/second.
Unicom will sell a total of 2.46 billion shares to investors in Hong Kong,
the United States, Europe and Asia. It is expected to raise as much
as $4.4 billion from the initial stock offering, which it will use to
expand its nationwide cellular network, optical fiber transmission
network and Internet business.
Meanwhile, investors here were unloading shares of China Telecom,
the largest state-owned carrier, in the belief that Unicom has greater
potential with advanced technologies like CDMA. The drop in China
Telecom's stock price sent Hong Kong's Hang Seng index lower this
past week. Global investors were also encouraged by Unicom's
confirmation of its plans to deploy a third-generation CDMA system.
"China is a perfect market for CDMA, and it makes business sense for
China Unicom," said Perry LaForge, the executive director of the CDMA
Developer Group (CDG). "It [gives] Unicom technical leadership in this
region. It also [gives] domestic manufacturers more opportunities."
CDG, a nonprofit trade group formed to promote the development and
use of the cdmaOne spec, was the co-organizer of the CDMA
conference.
Political role
Despite the optimistic forecasts for the future of CDMA technology in
China, industry observers stressed that internal party politics continue
to play a role. "The telecommunications situation is even more
politicized in Asia than it is here [in the United States] and in Europe,"
said industry analyst Herschel Shostek, based in Wheaton, Md. The
China Unicom-Qualcomm partnership has been complicated by Chinese
demands for greater access to Qualcomm's intellectual property,
Shostek added. "I would be very skeptical of claims that the political
situation [between state-run Unicom and Qualcomm] is resolved."
Several months ago, Unicom asked the CDG to help develop a
subscriber identification module function for CDMA handsets. The
group quickly developed one, and Unicom said it will include the
feature when its network is launched next year.
Sources here said Unicom has negotiated with the CDG and Qualcomm
on technical and business details for implementation of its CDMA 1X
RTT network. Unicom's network will operate at 850 MHz, which is
separate from GSM's 900-MHz frequency. CDG experts said Unicom is
ready to launch its CDMA 1X system for voice services in the next
year.
They also predicted that Unicom would benefit from higher capacity in
densely populated cities like Beijing and Shanghai. Moreover, better
coverage in rural areas would meet governmental requirements.
Unicom is meanwhile carefully watching Australia's CDMA trials to see
how that country is handling rural coverage.
South Korea already has a mature CDMA service that has helped lay
the groundwork for quick adoption of 3G wireless phones there. SK
Telecom, the largest wireless operator in the country and the sixth
largest in the world with 12 million subscribers, launched the first
commercial cdmaOne service in January 1996. It will be the world's
first 3G operator when it introduces its CDMA 1X service in October.
Se-Hyun Oh, vice president of SK Telecom, said long-term leadership
requires technical superiority. Hence, the company carefully evaluated
the risks and benefits of 3G before it made a final decision. SK
Telecom is betting that 3G technology with its higher spectrum
efficiency will bring in new revenue streams from wireless data
transmission and international roaming services.
City service
With its cdma2000 trial under way, SK Telecom will launch its IS-95C
service in the fourth quarter. Oh said the network will initially cover
seven metropolitan areas comprising 23 major cities, and will
eventually expand to about 70 cities in the second year. The network
will cover all domestic highways and railways in the third year.
The new wireless network will promote 1X-based wireless data
services that give subscribers high-speed access to the Internet. SK
Telecom said it will decide on an investment strategy for 1X
high-data-rate (1X/HDR) technology by 2001.
In Japan, DDI, the country's second largest wireless operator with
13.6 million subscribers, announced here that it began using
cdma2000 1X/HDR in May. DDI'S cdma2000 plan is facing stiff
competition from second-generation personal digital communication
systems as well as from wideband-CDMA services. The entire
cdmaOne service in Japan has only about 10 percent market share out
of a total of 52 million cellular subscribers.
Analyst Shostek predicted that carriers in South Korea and Japan
would quickly drop so-called "generation 2.5" technologies and go
directly to 3G. That means cdma2000 could become a "technology
island" if, as expected, Japanese carriers like DDI go to the Universal
Mobile Telecommunications System, the European implementation of
3G. |
