Genius in Korea and predicting the future. With all the conflicting stories coming out of Korea, there are a few
facts that are clear.
1)The government is charging between 0.9 and 1.3 billion $US for each 3G license. This price thus determines
that a) spectrum will be considered a scarce resource to be used efficiently (meaning operators need to pump
the max possible bit rates through it, and b) having invested these huge amounts, operators will use this
spectrum as soon as possible rather than just setting it asside for future use.
2)Cultural and historical factors will play an important part in the the decisions. No matter how long a Korean
has lived in Japan, he is still looked down upon and treated as an outsider. During WW II, the Japanese army
rounded up Korean women like cattle, exported them, and used them to provide sexual services to the
Japanese Imperial Army. I think the Koreans at all levels must have these facts in the back of their minds when
dealing with NTT and other Japanese businesses.
3)MC CDMA by QCOM is much more effective in transmitting data bits than the DS CDMA favored by the
Europeans and NTT. The Syncronous CDMA mode by QCOM provides a much more secure hand-off when a
mobile phone moves to the next cell site than does the asyncronous CDMA favored by Europeans and NTT. As
of yesterday, Samsung claims that it is now able to achieve a data rate of 5.2 Mbps in each 1.25 MHz channel
for 5MHz of spectrum using QCOM's MC CDMA along with the 1X EV technology (thus providing 15Mbps
total in three 1.25MHz channels). This 5.2 Mbps is consideraply greater than the 2.2Mbps per channel QCOM
originally demonstrated in Fall, 1999 during its HDR demonstrations. Keep in mind that there are a total of 7
1.25MHz channels available in a 10MHz slice of spectrum. We have heard no such claims from the Europeans
and NTT using their asyncronous mode DS CDMA. Perhaps this is because their bit rates and hand offs really
suck.
4)In QCOM's MC CDMA, some 1.25MHz channels can be used for data and others for Voice. The mix can
vary depending on location (ex data centric city area vs countryside) and time of day (ex day vs nite). Mobile
phones can move from cell to cell among such sites achieving a flawless handoff even if the data rate changes
due to cell voice/data channel allocation. This immense flexibility increases the overall date rates that can be
provided using a slice of spectrum and allows operators to better serve customer needs. The Asyncronous DS
CDMA favored by NTT and the Europeans just has no such flexibility.
5)Samsung is probably the leading equipment manufacturer in the world with tremendous expertese in
QCOM's CDMA. It has said it wants nothing to do with assyncronous DS CDMA. Failure to support MC
CDMA for 3G in Korea would damage Samsung's ability to export to the US, to spread R&D cost over a large
sales base, and to continue to be a leading company in CDMA. Companies like SK can easily be duplicated in
a few months with the proper amount of money--it could be cloned. Whereas Samsung is a true national
treasure (like Microsoft in the US) having an irreplaceable a)experience base, b)leading edge manufacturing
capability, c)collection of technical geniuses, d)international marketing/customer base, d) track record of
success. Companies like Samsung are the true source of a nation's wealth. Samsung is like a Ford and SK is
like and Avis Rent a Car. The Korean government is not a collection al Janet Reno's who would destroy a
national treasure like Samsung.
6) In Asial cultures, individuals are willing to accept considerable personal sacrofice for the benefit of the
collective group. Similarly, an individual company like SK is expected to put the needs of the country anbove
the selfish wants of the individual corporation.
I don't need to bore you with the logic, but, unless you are one of Ed Snyder's Chicken-Little club, you should
be able to reach a few conclusions from the points outlined above.
1) Samsung's leadership position in MC CDMA will be protected at all costs. To do otherwise would be
insanity no matter how jealous the carriers are.
2)The Koreans will not relinquish their once in a lifetime opportunity to be the best in the world at this leading
edge technology.
3)At least one Korean carrier will elect to use QCOM's MC CDMA. If there is only one that elects MC
CDMA Samsung and QCOM will treat that carrier like their favorite daughter providing it with the best and
the fastest of everything including financing and development turn around time. Ultimately that carrier will
pump more bits/sec through their spectrum than any other operator on earth and will be first to market. QCOM
will move heaven and earth to provide that carrier with any afflications software development resources that
may be had in the US.
4)One carrier may choose to go with NTT's money and the promise of future European markets. Since NTT
has ben allowed to make obsene profits as a Japanese monopoly, this Korean carrier will sell NTT stock and
use that money to build out its DS CDMA network. If it is lucky, NTT and the Europeans will actually allow it
to develop and ship them equipmewnt and favor this operator with International roaming. This operator will
not be a source of pride for Koreans and it will lack the highest bit rates required to make the best profits in
Korea. Still it may be able to earn part of its profits internationally if it can truely depend on the Japanese and
Europeans to take care of its interest. Buth Samsung and QCOM will continue to help this company with MC
CDMA on its existing spectrum, but that operator will tend to have a low priority on most everybody's list.
This company may well end up paying a higher overall royalty rate than the carrier that chooses MC CDMA.
5) The third Korean carrier had best choose MC CDMA because NTT and the Europeans just don't need two
DS CDMA carriers. So, there will be few advantages and many disadvantages if this company choses DS
CDMA.
6)The MC CDMA carriers will link their roaming systems with Japan, US, Canada, Australia, and probably
China.
Finally, if Samaung really can provide the 5.2 Mbps per 1.25 Mhz channel, the CDMA game may well be
over. DS CDMA will be at an extremely severe econonomic & bitrate disadvantage any place it goes head to
head with MC CDMA. Only fools and NOK choose to compete with one arm tied behind them, i.e. using
inferior technology available a few years from now. Further, any operator that has paid billions for new
spectrum will want to install the 5.2 Mbps technology which I suspect DS CDMA will never achieve. In
countries where spectrum is free, DS CDMA will be a little better off because it will only need to amortize its
equipment cost and not the sun of licensing cost and equipment cost over DS CDMA's vastly inferior bit rate.
JohnG |
