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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 173.05-2.7%9:56 AM EST

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To: Craig Schilling who started this subject10/28/2000 2:16:29 PM
From: Ruffian  Read Replies (2) of 152472
 
3G Field Trial Bears Burden Of Proof

By Deborah Méndez-Wilson

According to an ancient mantra, there is strength in numbers. And judging from a recent effort by four wireless allies, it appears
there may be something to it.

Recently, Sprint PCS, Samsung Telecommunications America Inc., Qualcomm and 3Com Corp. announced the completion of
the first North American field trial of 3G CDMA technology, known as cdma2000 1x. By joining forces, the companies believe
they can more quickly deploy third-generation CDMA technology, bringing streaming video, faster e-mail and other high-speed
data and voice services to consumers.

Proponents say the trial–conducted in Kansas during July and August–proved in a real-world setting that a standardized
approach to 3G CDMA results in faster data rates and increased voice capacity.

The trial is encouraging news for consumers who increasingly demand faster Internet access via their wireless handsets.
Customers will need to buy new handsets to reap the benefits, but 3G proponents are confident that consumers will rise to the
occasion. The theory is that the ability to download information from the ’Net at a much faster rate from wireless devices such
as phones and personal digital assistants will spur mobile commerce and stimulate developers to create new applications.

Still, some questions remain. For instance, can Sprint PCS and other CDMA providers deploy the technology as quickly,
seamlessly and cheaply as forecasts suggest?

Sprint PCS and its test partners are apparent believers.

Emboldened by the trial, Sprint PCS plans to roll out 3G upgrades throughout its nationwide network starting in the second half
of 2001. Phase I promises to speed up the carrier’s data offering by tenfold, boosting data rates from 14.4 kilobits per second
to 144 kbps. But Sprint PCS estimates that phase I hardware and software upgrades, to be completed by early 2002, will cost
an estimated $800 million. Those upgrades include new channel cards for existing radios, installation of packet data serving
nodes at switch centers and new software on both cell sites and switches.

Ira Brodsky, president of Datacomm Research Co., says the long-term benefits of building a backbone that can handle
ever-faster data speeds justifies the investment Sprint PCS is making and should give pause to other data providers. “They are
designing it so it will already be able to support more traffic at higher speeds, not just the first phase of cdma2000,” he says.
“So it’s clearly an investment into the future.”

Brodsky says likely challenges in overlaying the network, which essentially amounts to a separate Internet protocol data
network over Sprint PCS’ voice network, include ensuring that back offices are not overstressed.

Sprint PCS’ long-term plan is to migrate gradually to 4G by 2005, eventually reaching data rates between 3 and 5 megabits per
second. Starting with phase I implementation, however, consumers will notice immediate gains in speed that the company hopes
will fuel demand for more advanced wireless data services, says Oliver Valente, Sprint PCS chief technology officer.

In general, 3G solutions being devised for the various wireless platforms entail transferring bits of data in packets over an
IP-based network as opposed to sending them through circuit switches, a much slower process. “It’ll be a much faster way to
get to the Internet. Those are some real benefits users will see from day one,” Valente says.

Sprint PCS expects to compete “head-to-head” with other high-speed data providers, such as Metricom’s Ricochet, and even
wireline providers, he adds.

During Sprint PCS’ cdma2000 1x field trial, data rates reportedly reached 144 kbps while 35 voice calls were simultaneously
conducted at one cell at the same radio frequency. Once they reached the base station controller, voice and data transmissions
were split.

The test, conducted over Sprint PCS’ digital wireless network, was enabled by Samsung’s 3G V.4 base station technology and
3G 1x handset, 3Com’s PDSN and core data network and Qualcomm’s 3G 1x trial handset. Both handsets–Samsung’s and
Qualcomm’s–contained chipsets and software designed by Qualcomm.

George Vardakis, senior director of marketing and sales for Samsung Wireless Systems, says the CDMA community still is
abuzz over the Sprint PCS field trial.

Already he’s received calls from other operators who want to know more. He planned on briefing them during a CDMA
Development Group meeting in San Diego last week.

Vardakis adds that in his view Sprint PCS’ testing of 3G CDMA and plans to deploy the technology shows that “3G is a
reality.” The outcome of the trial seems to shore up the future for advanced services.
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