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To: Raymond Duray who wrote (10593)	2/21/2001 2:17:18 PM
From: J.B.C.	Read Replies (1) \| Respond to of 13572

Not exactly correct QCOM has the solution for utilizing existing GSM systems to upgrade to w-CDMA (if it ever really gets invented). Jim

To: Raymond Duray who wrote (10593)	2/21/2001 3:29:57 PM
From: slacker711	Read Replies (1) \| Respond to of 13572

That said, I'm wondering about your thoughts on how the future development of 2.5G and 3G systems will shake out in view of the fact that GSM systems seem to have a clear evolutionary path through EDGE, GPRS and UMTS (if I understand this correctly) and that each of these steps is incremental to existing service providers. Well...I would say that this would fall under "vaporware doublespeak" ;-). There are definitely people better qualified to give real details but I think I can provide an overview. The key part that most business writers (and PR people) leave out of an analysis of the various upgrade paths is that there are two completely different parts of the wireless system that need to be upgraded. The air-interface portion is emphasized by Qualcomm and the core network is emphasized by the GSM proponents. The GSM upgrade path to W-CDMA is evolutionary with respect to the network but revolutionary with respect to the air interface (they are going to have to rip out their entire air interface when they get to W-CDMA). From what I have read....the GSM-MAP network is the most well defined of the various network standards. It has definitely allowed more functions to date than either TDMA or CDMA (SMS, SIM). However, clearly the best air-interface is one based on CDMA. If you take a generic GSM operator that built out their network in '97 in Europe....their most likely upgrade path is going to involve going from GSM to GPRS to W-CDMA. I dont see much future for EDGE, now that AT&T has comitted to GSM. The network will be upgraded during the GSM to GPRS transition with some changes to the air-interface (GPRS bundles GSM slots). The key change to the network is the transition to a packet-based architecture. The next phase to W-CDMA is going to involve replacing the entire base-station to allow for a CDMA air-interface over the evolved GSM-MAP network. Both phases are going to be expensive.... In contrast, Sprint PCS will be moving to 1xrtt later this year. This may involve a changing of the basestation channel card (depending on the BS) along with an upgrade in software. There are no network changes that I know of. The total cost of the upgrade for PCS is going to be around $800m. This is well below any forecast I have read for a GSM operator. While on the other hand, to abruptly shift to the Q-CDMA migration path means that most of the service providers on the planet would be required to throw out their existing plant, and start all over again. That seems to me to be a high hurdle that Q faces. I think we have two different views here....I dont think that Qualcomm needs the GSM operators to switch to CDMA2000. The key for Qualcomm is that W-CDMA is rolled out quickly. The royalties for W-CDMA will be identical to those associated with CDMA2000 or IS-95A. They have stated this repeatedly and have signed up most of the telecom world with the exception of Siemens and Nokia. To go back to some of your initial remarks about telecom spending....the only companies that are continuing to increase capex spending are wireless. It probably has something to do with the fact that, thus far, consumers have shown a much higher willingness to spend for wireless (voice) services than high-speed wired data. Hope we arent going to far afield....dont want to make this into the 300 hundredth Holy Wars thread <g>. Slacker