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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 174.01-0.3%3:59 PM EST

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To: DaveMG who wrote (19209)12/7/1998 10:19:00 AM
From: Ruffian  Read Replies (2) of 152472
 
More Of The Same>



Third generation cellular phone will surf the Net US
lukewarm about Europe's forthcoming cellular phone
standard, writes Eoin Licken
The Irish Times

A generation ages quickly in mobile telephony.
The first generation cellular phones, now called
analogue, were introduced in the 1980s, and
their digital offspring, called GSM or
DCS,brought international roaming in the 1990s.
The third generation, appropriately enough, will surf the Net in the early 21st
century.

Despite being only at the conception stage, that third generation, called
Universal Mobile Telecommunications System (UMTS) in Europe, already
looks set to lead a prosperous life: market analysts last month predicted the
British government's auction of UMTS licences next year would attract bids
of up to (pounds) 500 million sterling. Stockbroker Henderson Crosthwaite
said four licences would be awarded in a UMTS market predicted to be
worth (pounds) 3.6 billion by 2012.

But despite the term "universal", UMTS has been developed by the GSM
world, and like GSM has not been widely accepted in the US, although it is
one of a number of competing second-generation systems there. The others
are called DAMPS and IS- 95. Mobile companies in the US now want the
global third-generation mobile standard to be closer to their own second
generation, probably meaning multiple global standards will be required.

Put another way, in the words of one European industry source, having
watched European mobile companies rise to prominence on the back of
GSM's success, US companies want compromise.

UMTS has mixed European and Asian parentage: the European Technical
Standards Institute (ETSI), based in Sophia Antipolis, southern France's
Silicon Vallee, and the Association of Radio Industries and Businesses in
Japan. Ericsson is already running tests with Japan's NTT DoCoMo, the
world's largest cellular operator.

UMTS is based on a radio interface which uses a standard called
WCDMA, and can work with existing GSM systems, allowing a smooth
transition to the next generation. But not in the IS-95 community, leading to
calls to either change WCDMA or adopt multiple global standards.

"We do have some concerns that ETSI may have jumped the gun," says Mr
Richard Engelman, the chief of the Planning and Negotiations Division at the
FCC's International Bureau. The FCC, the US government's telecoms
regulator, disagrees with the European desire for a single global standard,
preferring to let the marketplace decide.

The marketplace in this case is not the consumer: the chief lobbyists are a
collection of powerful mobile manufacturers, such as [ Motorola ] , Nortel
and Qualcomm in North America, and Nokia, Ericsson and Alcatel in
Europe. The US companies are concerned because the ETSI-preferred
standard will not work with existing US digital networks based on the
so-called IS-95 standard. Their preferred third generation standard is called
CDMA2000.

The dispute has boiled down to a battle over patents, principally between
Qualcomm and Ericsson. According to Mr Engelman, Qualcomm which is
based in San Diego holds several patents for the commercial application of
original (second-generation) CDMA, and is threatening not to share them in
a patent pool unless the European WCDMA merges with CDMA2000.
Swedish company [ Ericsson ] responds that WCDMA doesn't infringe any
valid Qualcomm patents. Its corporate director responsible for standards,
Mr Mats Nilsson, says Qualcomm is the only US manufacturer lobbying for
convergence between the two standards.

A resolution to this issue may be at hand, thanks to ever smaller and cheaper
technology. A recent Motorola and Nokia presentation to the International
Telecommunications Union (ITU) proposed merging only enough of the
radio interface parameters to allow dual-mode handsets to be cheaply
manufactured. Welcoming such a development, Mr Alistair Urie, product
strategy director for mobile operations with the French company Alcatel,
says it may only cost as little as 10 per cent extra to make a multi-mode
phone if enough of the radio interface is common.

If a solution to what Mr Urie calls "the radio war" can be worked out by the
ITU's year-end deadline, the international body will be on track to
recommend a standard or standards for global third generation by the end of
March. Called IMT-2000, the next generation of mobile will then offer truly
global roaming, one of its cherished goals.

Other goals include richer services, based mainly on faster data interfaces.
Unlike GSM's current maximum data rate of 9,600 bits per second, UMTS
will offer up to 2 megabits per second to users in small indoor cells, typically
office-wide cells. Mr Fergal Kelly, the director of products at Eircell, says
this will allow high-quality video or very fast and graphics-rich Internet
access on mobile phones. He expects many applications based on
machineto-machine data communication, such as cars talking to navigation
systems.

Ireland currently has one first-generation system (Eircell's 088 service), and
two second-generation GSM systems (Eircell's and Esat Digifone's GSM
systems). The forthcoming launch of Meteor's DCS 1800 system, a sister
technology of GSM, will bring another second-generation system into
Ireland, and third-generation licensing is likely to become a priority for the
Telecommunications Regulator sometime next year. We can expect the first
working systems sometime after 2002.

But in the meantime, says Mr Kelly, GSM will increase its data rates:
"Before UMTS, we will move the existing system towards UMTS." A first
technology, called high-speed circuit-switched data, will allow up to 38
kilobits per second (kbps) data channels to mobiles, depending on local
network conditions. This is expected sometime in late 1999. Then sometime
around mid-2000, he says, a second technology called GPRS (generic
packet radio ser- vice) will further increase the data speed to 115 kbps.

While the interfaces speed up, the phones too are becoming more
advanced. Smaller, cheaper and faster chips mean more memory coupled
with bigger screens. Mr Kelly says these will initially feed the top end of the
market, but mobile Internet browsers and video phones are "very much on
the cards in the next 18 months", he adds.

Eoin Licken is at elicken(at)irish-times.ie

(Copyright 1998)

_____via IntellX_____

Publication Date: December 05, 1998
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