Cha2,
re: Addendum: Nextel & QUALCOMM CDMA
<< Addendum ... Morgan Stanley -- Nextel reiterates cdma2000 1x plans for its 3G build-out. Since Nextel will undergo a "forklift upgrade" of their network, their selection of cdma2000 1x as the 3G technology of choice is another strong positive >>
There continue to be conflicting reports on Nextel and the status of their finalizing a commitment to 1xRTT. Although I believe that it is highly probable that Nextel will commit to 1xRTT and I also believe that it is he best technology choice that they can make for the new spectrum they cleverly acquired, some of the promises that were made to them in the course of examining the best migration path need to be firmed up.
Nextel has been very successful in offering a rather unique business service and the key differentiator of this service (in addition to wireless data messaging) is "Direct Connect" two-way radio service, which provides groups of Nextel customers with "push-to-talk" instant communication on a one-to-one or one-to-many basis.
The recent WR Hambrecht report adds a little essential detail and background that is not in the Morgan Stanley report:
wrhambrecht.com
Nextel has recently released a request for proposal (RFP) to QUALCOMM regarding CDMA 1XRT. Specifically, Nextel’s RFP is focused on receiving assurance that CDMA 1XRT can support Direct Connect (or voice dispatch) functionality, as the company does not plan to roll out a CDMA 1XRT network without Direct Connect capabilities. Nextel expects a response from QUALCOMM in roughly eight weeks. IF Nextel decides to implement CDMA 1XRT, the company believes it would be 18-24 months before the commercial rollout of a CDMA 1XRT network. Despite Nextel’s high degree of interest in CDMA 1XRT due to the technology’s relatively small bandwidth requirements (2 x 1.25 MHz), the company has not yet committed to deploying CDMA 1XRT technology. In any case, Nextel believes that the deployment of a non-iDEN 2.5G/3G technology will enable the company to benefit from purchasing handset and network infrastructure from multiple vendors.
... so we are close, but no banana yet, and no revenue this year or next, but nice incremental revenue beyond that if the deal solidifies.
As for wireless data:
Nextel is aggressively promoting wireless data services as a means of increasing the utility of Nextel’s service. Nextel’s wireless data penetration has reached 15% of its voice subscriber base in less than 12 months, which is the highest data penetration rate of the domestic wireless carriers. Nextel has targeted wireless data messaging solutions to the white collar market, including Wireless Knowledge’s Workstyle Server, which provides subscribers with real time access to Microsoft Outlook and Lotus Notes email, contact and calendar information.
Nextel expects to have 56 kbps packet data service by the end of 2001, which should be competitive with GPRS and CDMA 1XRT deployments. Nextel plans to use compression technology to increase the data throughput rates on its existing packet data network from 20 kbps today. The cost of implementing compression technology is expected to be minimal, as it requires only the deployment of compression server software. As a result, Nextel should not be at a competitive disadvantage relative to GPRS and CDMA 1XRT 2.5G networks deployed by the company’s competitors towards the end of 2001/early 2002, which should provide data throughput rates ranging from 14-64 kbps.
Now, engineer seems pretty positive that QUALCOMM can provide the requisite technology:
To:cfoe who wrote (10722)
From: engineer Thursday, May 17, 2001 1:07 AM
Respond to 10728
yes, he mentioned Q chat at the shareholders meeting. And yes, this is what they mean at nextel for direct connect, and yes Q developed almost all of it for the condor phone which is used by teh US government. the biggest problem is that all the infra for this deal will most likely go thru MOT and Q has to teach MOT how to do this. but, don't fear, Q agreed to help MOT build infra about 3 months ago, I presume this was to help MOT figure out how to do the CDMA stuff for their iden basestation.
In addition, theoretically, Qualcomm should be ready to supply a GSM/1xRTT or GSM/1xRTT chipset supporting R-UIM by the time (or shortly after) Nextel is ready to rollout which would solve the necessity for Nextel to support the international corporate traveller, which they have been doing for well over a year now with a SIM enabled GSM/iDEN handset.
The devil is in the details and there are details to be worked out on this one.
<< In current spectrum, its GPRS only as competition >>
No, it's GPRS, and now EDGE, and where sufficient bandwidth is available, WCDMA.
<< In new spectrum, its a committee product WCDMA vs CDMA 2000 >>
... and this is where cdma2000 needs to strengthen the order book.
It takes infinite patience and faith in the future of mobile wireless data services to play in wireless while the business model & technology are in a state of transition. In the case of QUALCOMM it takes some faith that a proprietary (open) standard can offer technological advantages so compelling that it can successfully compete with the "committee product" family that the industry favors.
- Eric - |
