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To: 100cfm who wrote (27131)	6/30/2000 6:22:29 PM
From: Thomas Mercer-Hursh	Read Replies (2) \| Respond to of 54805

Given that whether it is WCDMA or CDMA2000, it is still CDMA and QCOM still gets its cut of the pie for that, what is the financial impact on QCOM's future revenue prospects if the herd decides to go with WCDMA?

To: 100cfm who wrote (27131)	7/1/2000 4:09:47 PM
From: Eric L	Read Replies (1) \| Respond to of 54805

100cfm, Re: QCOM - UMTS UTRA DS (WCDMA) v, cdma2000 in Korea (and elsewhere) << Why is everybody wanting an inferior, not ready, more expensive, most likely to be delayed by legal battles system over 1x/HDR >> First it may be appropriate to ask: * in what regard is UMTS UTRA DS (WCDMA) inferior to cdma2000? * in what regard is cdma2000 inferior to UMTS UTRA DS (WCDMA) ? * when will cdma2000 that meets 3G IMT-2000 3G requirements be standardized? * when will it deliver? * is 1xMC really 3G or is it 2.75G (new Cahners In-Stat term)? * is is UMTS UTRA DS (WCDMA) really more expensive? * what legal battles (if any) might ensue over IP? There is a disconnect here. There is an established 3G specification in the GSM world. There is none in the CDMA world. 3G licensees are or will shortly be placing orders for 3G infrastructure. It is difficult to place an infrastructure order for a standard that does not exist. You can commit to it, like DDI IDO did, but you can't order it. 1x/HDR is not yet standardized, and of course neither is 1xMC Revision A, or 3xMC. There is a fair amount of leadtime between standardization and commercial delivery of any telecom product. Generally one year minimum. 1xMc phase 0 (which WAS recently standardized) does not comply with the data rates required for 3G, nor is it designed to operate in the broad spectrum range that most of the world (North America aside) has set aside for IMT-2000 3G operation. Chipsets that accommodate an R-UIM (an ITU IMT 2000 requisite for 3G international roaming and minimum global interoperability) are perhaps a year away. UMTS UTRA DS (WCDMA) on the other hand is specifically designed to operate in the broad spectrum set aside for IMT-2000 3G operation in Korea and most of the rest of the world. The first phase specification (Release 99) is complete and the 2nd phase (Release 2000) is in progress. UTRA DS will, in its initial implementation, be fully interoperable not only with other DS networks throughout the world, but with existing GSM networks. This is a very important consideration for Korea and other countries. There are currently 355 GSM Networks on the air, with 311 million subscribers, in 132 countries. By contrast there are currently about 70 CDMA Networks on the air, with 64 million subscribers. There has never been much likelihood that a GSM operator would chose to build out UMTS or 3G with cdma2000. Interoperability and backward compatibility with the net are very important considerations for the GSM operator. With at least 70%, and perhaps 80%, of the carriers in the world likely to opt for UTRA DS it is highly unlikely that a UTRA DS buildout will be "more expensive" than a cdma2000 3xMC buildout. Probably the opposite is true. Another consideration of course for the delivery of 3rd generation multimedia services will be the availability of terminals. Given the disproportionate number of networks and subscribers that will opt for UTRA DS implementation, the range of terminals available for DS will be much greater than for MC and the price point will be lower. 1xMC is most likely to be built out or upgraded in existing 800/1800/1900 MHz spectrum by existing IS-95 operators. Maybe we should stop pretending that 1xMc phase 0 is 3G? We Americans (US style) sometimes set our own rules and expect the world to follow blissfully along. The Brazil Americans just thumbed their nose at us. North America has become very isolated from a spectrum point of view. Another development that is coming about more rapidly than I anticipated is the advanced IP network. A UTRA DS network can be incorporated into an advanced IP network like the one that Cisco & Nokia are helping SK Telecom plan that can also integrate a cdma2000 1x/3X MC network using a bridge and hooks and extensions. This is all UMTS Release 2000 stuff, but it is happening now. KPMG & Cisco had a major announcement yesterday of a IP network hothouse in the UK. Fortunately, valuable members of QCOM's value chain (NT & LU) are in synch on this one. Vodafones a major driver. I have to admit when I first saw the slides (16 & 17) in SK Telecom's presentation on the CDG site (linked below) a few months back I was quite surprised. Like you, and like Cha2, I had assumed that existing IS-95 operators would opt to build out 3xMC in new spectrum. Obviously that is not the case: cdg.org park/index.html I was surprised again when it was announced that Nokia along with Cisco was awarded a services contract for the planning and implementation of SK Telecom's 3G network. The IP network can work to Qualcomm's advantage. Take China (you take it, it makes my neck ache <g>). China Unicom is continuing to build out 2G GSM and upgrading or adding 2.5G GPRS. It appears however that they will implement cdma2000. If so they can tie the whole thing together with an IP network and a Network to Network Interface (NNI). The same SK Telecom network diagram I referenced above applies. Korea is working closely with China. Nokia is pioneering Software Defined Radio which potentially changes the paradigm again. How about a CDMA overlay of a GSM network? This has been a very elusive Qualcomm dream ... BUT ... what about existing GSM spectrum in China (900/1800 MHz) ... Korea already does CDMA 1800. Qualcomm and others are quickly evolving a 1x/HDR specification for a GSM MAP network. China? Free from the regulatory restrictions of Europe 1x/HDR will blow the doors off GPRS. China Unicom appears to be doing SERIOUS & SENSIBLE network planning. Qualcomm has worked diligently in China. There could be a BIG payoff. In 2004, China will pass the US (and Japan) as the largest mobile wireless telecom market in the world. Qualcomm is there. CDMA overlay? While on the one hand it is becoming increasingly evident that in the 3G world, committee based open architecture, will dominate, on the other hand the wireless data tornado has not yet begun, and the multimedia 3G tornado is even further out. Right now we should probably focus on the CDMA tornado (2G, 2.5G & 2.75G), which continues, and seamlesly will include 1xMC. It is TOO EARLY to worry about 3G. According to an In-Stat worldwide wireless subscriber forecast, 3G will begin to roll out in 2001, attracting some 52.5 million subscribers. Japan will be the first region to roll out 3G in 2001 followed by Western Europe in mid-to-late 2003. The forecast indicates that 2G and 2.5G technology will peak in 2004 and will then slowly be replaced by 3G. In the interim while GSM rolls out GPRS and SK Telecom 1xMC, the data tornado winds may be beginning to blow. Qualcomm is a player. 3G is a wideband CDMA air interface whether MC or DS. CDMA is QCOM, first and foremost. Although 3G IP issues still need resolution, I think one can have confidence that Qualcomm will be compensated for its IP in any cdma mode of operation for 3G. - Eric -

To: 100cfm who wrote (27131)	7/2/2000 1:04:58 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

Hi, CenturyMan. Your post caused me to think long and hard about the hurdles you described for Qualcomm. Thank you for motivating (scaring) me, because I really needed to address those issues. >> Speaking of stronger value chains I think Q's value chain is in total revolt. This is not unusual. Just look at the lack of affection between Microsoft or Cisco and the members of their value chains. Moore commented on this phenomenon on pg.46 of tfm: Gorillas carve out the sweet spot from the value chains they dominate and leave the scraps to the partners. When the customer demands some high-cost, low-value enhancement, the gorilla makes sure that the burden falls on someone else, not them... It is this form of power that causes every other company in the value chain to genuinely hate the gorilla. They don't hate the people, they hate the company, because it is feeding off their work to make its profits gigher. And there is nothing, apparently, that anybody can do about it. As far as the Koreans are concerned, they are tough negotiators, but they are thorough in finding their most advantageous position. Their wcdma stance might just be a tough negotiating tactic. Or perhaps they are hedging their bets against the possibility of a huge wcdma export market. But until NOK proves wcdma viable, both technologically and financially, to the carriers, I doubt that Korea will bolt from the Q camp as it would not be in their best self interests. uf