Europe's wireless industry is on the brink of disaster
By Ira Brodsky
Network World, 05/28/01
European telecom ventures have spent more
than $100 billion on licenses for 3G wireless
networks. Now some want their money back.
They say they paid too much. That may be
true: Spectrum auctions in the U.K. and
Germany garnered winning bids totaling $35
billion and $46 billion, respectively. But
license winners have been less than candid
about their sudden change of heart.
The real problem is that Europe's Universal
Mobile Telecommunications System (UMTS)
operators have committed to a technology
that isn't ready: Wideband Code Division
Multiple Access (W-CDMA). W-CDMA is
touted as superior to Qualcomm's
CDMA2000, the CDMA technology used by
U.S. operators such as Verizon Wireless and
Sprint PCS.
The first commercial W-CDMA services were to be launched this month in
Japan and the U.K. This had been widely reported as proof that W-CDMA
was ahead of CDMA2000. Now that the first two W-CDMA launches have
been postponed, perhaps the industry will notice CDMA2000 has been in
commercial service in Korea since late last year.
In the face of a lengthy W-CDMA delay, Europe's 3G operators have three
main options: deploy a 2.5G technology known as general packet radio service
(GPRS) as an interim solution; convince their governments to relax license
payment terms and simply wait; or switch to CDMA2000.
The first option would let UMTS operators begin acquiring customers right
away. And they would have good company: AT&T Wireless also has decided
to deploy GPRS as a first step toward W-CDMA. Even though a second
software upgrade will let CDMA2000 users communicate at roughly 150K
bit/sec - about five times faster than GPRS - the slower GPRS could prove
fast enough.
The one hitch for UMTS operators: Europe's existing 2G operators, which use
the popular global system for mobile communications (GSM) standard, have
already begun deploying GPRS. This is also why the second option - convince
governments to relax payment schedules and just wait - is a bad idea. It gives
GSM operators more time to enhance their networks, making UMTS a
tougher sell.
The last option - switch to CDMA2000 - makes the most business sense. It
would let UMTS operators begin deploying networks immediately based on
proven technology. It would also facilitate roaming between Europe and
countries that don't support GSM, such as Korea and Japan. And it would be
less expensive, because CDMA2000 is based on hardware that is already in
volume production.
The problem is that Europe has benefited greatly from the success of its
home-grown wireless technology. It would be extremely difficult for a UMTS
operator to break ranks and switch to CDMA2000.
But history suggests that when countries deny users better solutions just to
protect domestic suppliers, the users and suppliers end up losing.
Brodsky is president of Datacomm Research of Chesterfield, Mo. He can
be reached at ibrodsky@datacommresearch.com. |
