Below is a 11/18/96 New York Times article from their financial section:
2 New Standards for Wireless in Battle Over Next-Generation Service
By SETH SCHIESEL
At a major cellular telecommunications convention this spring in Dallas, the head of Primeco Personal Communications made a bold prediction for his company's introduction of the new type of wireless telephone service known as PCS.
"We'll have all 11 markets ready for the Christmas season," said Ben Scott, Primeco's chief executive.
Nicholas Kauser, chief technology officer for AT&T Wireless Services, a Primeco competitor who attended the same convention, was quick to respond. "I'll bet a month's wages that it won't happen," Kauser was quoted as saying in Wireless Week, a trade publication.
Kauser better get out his checkbook. Primeco, which takes a fundamentally different technological approach to PCS than AT&T, introduced its service last week in 15 metropolitan markets including Chicago and Miami.
There is much more at stake than a gentlemen's bet between corporate rivals, for the Primeco rollout was the first U.S. market test in a raging financial and technical battle between two rival standards for Personal Communications Services, or PCS. On one side is a time-tested technology that only AT&T Wireless plans to deploy on a nationwide basis. On the other is a newer, less-proven format -- but one upon which Primeco, Sprint Spectrum and most of the nation's other PCS providers are staking their futures.
For customers, the technical debate will come down mainly to which format -- if either -- offers better voice and data services. But for makers of PCS handsets and network equipment, billions of dollars in future contracts hang in the balance, as companies like such as Qualcomm, Ericsson, Lucent Technologies, Motorola and Northern Telecom angle for business.
Kauser's wager reflected widespread skepticism about the variety of PCS technology adopted by Primeco: code division multiple access, or CDMA.
And while it is too early to tell how well CDMA will work as thousands of subscribers move onto these new wireless systems, the fact that Primeco's networks appeared to be operating without major incident last week was an early vindication of the CDMA format.
"If your argument was that CDMA was a hoax, well it's here," said Gregory S. Geiling, an analyst at J.P. Morgan. "The debate over whether CDMA is a viable technology has been put to rest."
Both CDMA and its main alternative in this country -- time division multiple access, or TDMA, chosen by AT&T Wireless -- process calls digitally. That enables more subscribers to use a network, which should translate to lower costs for operators and lower prices for consumers. Digital transmission can also offer better voice quality than traditional analog cellular systems.
Both CDMA and TDMA support data communications. (A TDMA variant known as GSM, dominates Europe's wireless market and is used by some smaller American operators including Omnipoint Communications, which introduced service in New York last week.) But the two technologies accomplish those goals in radically different ways, and their partisans see radically different results.
TDMA, championed by Ericsson, the Swedish maker of handsets and wireless network systems, allows three users to share a single radio-frequency channel by dividing each user's voice or data conversations into tiny time segments, interspersing the segments and and reassembling the traffic at the receiver's end.
AT&T Wireless is the sole national proponent of TDMA, which is the format for the "Digital PCS" system the company introduced as updated cellular phone service in September and plans to roll out at higher PCS frequencies next year.
Instead of using time division, CDMA scatters the contents of voice and data conversation over many channels, giving each snatch of information a unique identification code to allow reassembly
on the receiving end.
Though the San Diego-based Qualcomm Corporation introduced the basic technology in the late 1980s, providers have faced daunting technical challenges in getting CDMA from the laboratory to the marketplace. But last week, CDMA's supporters were reveling.
"If you go back and look at what we claimed for this technology, we've delivered," said Harvey P. White, Qualcomm's president.
Not quite. Originally projected to offer up to 40 times the capacity of analog systems, most analysts now say CDMA at most will offer ninefold improvements over analog.
That is still more of an upgrade than the three-for-one expansion of TDMA And it is why many industry figures say CDMA offers long-term financial benefits -- though TDMA advocates like AT&T Wireless and Ericsson dispute this.
Scott K. Erickson is a marketing vice president at Lucent, which makes both systems and counts as clients both AT&T Wireless and Primeco -- a joint venture of Nynex, Bell Atlantic, US West and Airtouch Communications. Even Erickson describes CDMA as "a much more economical system to deploy."
But, like Kauser, TDMA's defenders continue to bet that CDMA will fall on its face.
"We're not experimenting on our customers, which is what is going to happen with some of these new technologies," said Roderick D. Nelson, an AT&T Wireless vice president.
Over time, many industry experts expect the relative advantages of the two formats to blur, as the providers with the best marketing plans prevail. "The consumer is the one who's going to win," said Matthew J. Desch, president of Northern Telecom's wireless networks group.
Copyright 1996 The New York Times Company |
