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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 174.54-1.2%3:59 PM EST

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To: Craig Schilling who started this subject5/20/2001 11:12:29 AM
From: Dennis Roth  Read Replies (1) of 152472
 
A new CDMA faithful
by Lynnette Luna
Telephony, May 14, 2001
telecomclick.com

Nextel Communications said it chose to migrate its iDEN wireless system to cdma2000 1X
technology instead of the worldwide wideband CDMA (WCDMA) standard because of
economics.

When you look at the efficiency of WCDMA in terms of what it can deliver for the spectrum that's been allocated and compare that with the spectrum efficiency of 1X, it's pretty clear which way we would go, said Greg Santoro, vice president of Internet and wireless services with Nextel.

Santoro publicly stated the company's intention to deploy 1X technology during this year's
Cellular Telecommunications & Internet Association trade show, but the company has not
revealed the details until now.

Santoro said Nextel is in the process of soliciting bids from various CDMA vendors but
declined to indicate when the company would roll out the new technology.

?We're not committing to a time frame,? Santoro said. ?But we're not significantly behind the
kinds of schedules that have been talked about,? (see table).

Industry experts had speculated early on that Nextel, which offers integrated cellular and
two-way radio services to business customers, would evolve its network to GPRS and
WCDMA systems because iDEN ? integrated Digital Enhanced Network ? technology is a
derivative of GSM technology.

WCDMA ? a technology incompatible with 1X systems ? would have aligned Nextel with
many carriers globally, but cost was a bigger consideration for the company, Santoro said.
WCDMA would require Nextel to clear large swathes of spectrum or buy more spectrum ? a
dicey proposition considering the amount of potential wireless spectrum is tied up in the
hands of the federal government and the costs wireless operators will have to incur to
acquire it.

?We feel it's important to give customers access to new technology but not at any price,?
Santoro said. ?Therefore, it's a reasonable trade-off to not be part of the worldwide
standard.?

1X technology provides capacity and high-speed data benefits within U.S. spectrum
constraints. However, Santoro said Nextel would consider flipping to WCDMA technology if
it could buy more spectrum at a reasonable price.

cdma2000 1X plans
Australia
Trial 3Q 2000
Brazil
Launch 4Q 2001
Canada
Launch 4Q 2001
Japan
Launch 4Q 2001
Korea
Commercial
Mexico
Launch 4Q 2001
New Zealand
Launch 4Q 2001
United States
Launch 4Q 2001
Venezuela
Trial 1Q/2Q 2001
Source: CDMA Development Group

?We feel it's important to give customers access to new technology but not at any price.??
Greg Santoro, Nextel

But spectrum isn't likely to come at a reasonable price. Carriers aren't interested in the 700
MHz band the FCC plans to auction this year because of incumbency issues with television
broadcasters. And the Defense Department is staunchly sitting on potential third-generation
spectrum.

?The question is, how long can these operators wait until the spectrum problem is resolved??
said Jane Zweig, CEO of The Shosteck Group, which plans to release a white paper June 1
analyzing the possibility of TDMA operators migrating to 1X systems. ?They are stuck with
existing spectrum, and what do you do to become more efficient? GSM/GPRS is going to be
less spectrally efficient than CDMA.?

Santoro believes the industry will see a number of non-traditional CDMA operators commit to 1X technology. Sources close to BellSouth International say the company will begin converting some of its Latin American TDMA properties to CDMA. And TDMA operator Cingular Wireless, which many speculate will migrate down the GSM/WCDMA path because it already operates GSM in a few of its properties, also is studying 1X technology.

It's not like 1X is going to be a secondhand choice of a bunch of minor players,? Santoro
said. ?WCDMA itself is a long way away, and the operators in Europe who paid the money they paid [for spectrum] are feeling extreme pressure.


Nextel still intends to give customers access to its two-way radio service on the new 1X
system. Likely, Nextel will build the 1X system alongside its iDEN system, offering customers
who want higher-speed data services access to the 1X network.

It wouldn't have made sense for Nextel to deploy a GPRS/GSM network because the
company already offers packet-data services. Nextel will incorporate compression technology
this summer to offer packet-data services at five to 10 times faster than current offerings,
Santoro said.

?We're well positioned because we understand packet data,? he said. ?There are a lot of
challenges in the packet-data environment.?
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