Qualcomm's Irwin Jacobs (Transcript of Interview)
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Hong Kong, Dec. 5 (Bloomberg) -- The following is a transcript of a Bloomberg interview with Irwin Jacobs, chief executive of Qualcomm Inc. The reporter is Thomas Lau.
LAU: Past month of speculation, the Chinese government has finally come out and said it will back an agreement between Qualcomm and China Unicom to develop Qualcomm CDMA network. Here to give us more details about the MOU from Chinese government, the Qualcomm chief executive, Irwin Jacobs. Welcome to Bloomberg.
JACOBS: Good to be with you again.
LAU: Okay. Qualcomm said yesterday it has signed a MOU with China's ministry of information industry to support Qualcomm's agreement with China Unicom. What does this MOU mean to Qualcomm?
JACOBS: Well, I think it's another important step with moving ahead with CDMA in China. There had been some questions as to whether there was appropriate government support. I think this MOU puts that to bed. The MII Ministry of Information Industry has agreed with two key items. First, that the agreement--the framework agreement we had previously signed with Unicom that they support that agreement. And secondly that they support the build out by Unicom of a--an IS-95A system that can then be expanded to higher data rates.
LAU: What's the next step going to be for both Unicom and China Unicom from China?
JACOBS: Well, Unicom has been talking with various manufacturers about buying the infrastructure to build out their system throughout China. And so the next step would be for them to issue tenders and then contracts for that equipment.
LAU: What about for Qualcomm?
JACOBS: Qualcomm, we continue to work with the various manufacturers in China. And so, they're hoping--some of those manufacturers are hoping to win both some infrastructure business and some subscriber--some handset business. And so, we're continuing to work with them so that they're prepared to offer CDMA equipment.
LAU: And was there any core unit in this month's, in the course of like ten months--do you have any doubt that CDMA 3000 is not going to happen? I mean, this agreement with China Unicom.
JACOBS: Well, there was some question as to whether they would wait to put in the 1X equipment or the WCDMA equipment. There was no question they would be going CDMA. I think the entire world is going CDMA. And so, the only question was timing. And we were very hopeful that indeed they would move more rapidly, because it's in China's interest as well. CDMA is the newest technology. It allows them to provide greater services at lower costs for subscriber than other systems such as GSM. So it makes sense to build it out. And if you're ultimately going into CDMA, the sooner you get into and gain experience the better both for you, for the operators, for the subscribers, and for the manufacturers.
LAU: Now, with your official approval from the Chinese government will Qualcomm be involved with any of the testing of the 3G equipments. I mean, especially in March when the government is set to announce something regarding the incentive.
JACOBS: Well, I believe that they will be obviously, testing the 1X equipment, which we believe is actually the most powerful 3G equipment, already started commercial service in Korea. We'll be spreading throughout the world next year and so, the 1X equipment is on the way. Now, there are other possibilities, WCDMA. There are two technologies being tested in China, TDSCDMA and LESCDMA. You can see that they're all common CDMA type approaches. And so, yes, we will participate in working in China to help in any testing work that they desire. We are setting up a development center in China and that--one of the functions there will be to help on investigating both existing 3G, and the evolution plus new applications.
LAU: Here's my--all details here about this development center. How much money are you going to put into this development center? What sort of role would it be taken?
JACOBS: We expect actually--we haven't specified a number, but to make a very significant investment, again assuming that the CDMA does move ahead in China. We want to be there. We want to be helping both the Chinese manufacturers and the development community. And we think actually it will be helpful worldwide to have a strong capability within China. And so, it will be a multimillion- dollar investment that we will be making.
LAU: Where is it going to be-- (inaudible)?
JACOBS: We're looking for a good site right in Beijing.
LAU: Beijing, okay. Give us--when will this Qualcomm CDMA service begin in China? Do you have a projected date? Now, the MOU is signed and?
JACOBS: Well, of course there already is CDMA operating under the Great Wall system. That is in the process, it appears of being transferred to Unicom that the government has directed that that occur. But the equipment now will be yet a new system so with augment that Great Wall system. This new equipment depends, again when they launch the tenders and sign contracts. But I would imagine it would be before the end of this coming year, before the end of 2001 that should be very substantial CDMA infrastructure operating in China.
LAU: Will that be the first half or second half -- (inaudible)?
JACOBS: Well, it's probably. Once they issue contracts then there's, you know, several months before you ship the equipment, get it installed, tested, and then into commercial operation. So, I would think that in the second half of the year.
LAU: Let's talk about Qualcomm's other operation in Korea. Telecom Korea, Telecom LG Group (inaudible) used here. WCDMA technology (inaudible). How is it affecting Qualcomm business? Are you currently in touch with these companies to, you know, try to persuade them to--
JACOBS: Well, it really doesn't directly affect Qualcomm. In countries where there's no CDMA, if people then choose WCDMA and it is delayed for example, and to wait 2003 is quite probably, but not certain. I hope it's sooner. But it certainly could be that late. Then it affects Qualcomm, because if you continue to use GSM, you ignore the wireless Internet and you don't move to CDMA more rapidly, then we lose at a number of CDMA subscribers. And but in Korea all the subscribers on CDMA where already putting third generation into the existing spectrum. Although, there they refer to it as 2.5 generation, but whatever. It has all the capabilities of third generation. So, it's already going in place, and so, if there is in fact, a delay in the new spectrum because some choose to wait for WCDMA, it doesn't really affect us.
LAU: Okay. Thank you Mr. Jacobs. I'm speaking with Irwin Jacobs, the Chief Executive of Qualcomm's Inc. This is Thomas Lau from Bloomberg in Hong Kong at the IPU telecom conference.
END OF TRANSCRIPT***
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Dec/05/2000 16:13 ET |
