Understanding 3G
Feeling the squeeze
by Alan Cane
Published: May 31 2001 16:50GMT | Last Updated: June 4 2001 18:45GMT
Europe's proudest technological boast is its leadership in mobile
telephony. Of 700m cellular subscribers worldwide more than
two-thirds use the GSM (global system for mobile
communication) standard created, adopted and nurtured in
Europe.
The economic consequences for the region have been
profound. Companies such as Nokia of Finland, the leading
handset maker, and the UK's Vodafone, the world's largest
mobile operator, are the powerhouses of the wireless economy.
Europe's leadership may not, however, survive the move to the next generation of mobile
phone technology. The efforts of regulators, vendors and operators to ensure Europe stays
ahead of the pack as the world moves to third generation (3G) services could inadvertently
cost the region its dominance.
Its chief competitor, the US, is snapping at its heels. San Diego-based Qualcomm recently
secured a licence for 3G in Australia in what many see as a gauntlet-hurling exercise
designed to show its version of the code division multiple access system, CDMA2000,
works best.
Third-generation services are due to be launched in Europe next year. But all the 3G base
stations and telephone handsets have had to be created from scratch because of Europe's
insistence on following its own version of the CDMA technology, known as w-CDMA.
Irwin Jacobs, Qualcomm's chairman and chief executive, and inventor of the 3G technology,
has already cast doubt on whether Europe can meet its self-imposed target. He has even
suggested that US carriers could get to 3G before thier European rivals - and at lower cost.
The European specification, called UMTS (universal mobile telephone system), is still
undergoing radical revision. There are already worries that handsets will be delivered late
and will perform worse than the GSM phones which they are to replace. Critics say a
complex development such as UMTS requires hugely more time to be tested and completed
than the Europeans have allowed.
The European Commission has also given warning: "Product development for 3G terminals
has not in the main progressed beyond proto-typing, pending verification of the key
applications which these handsets need to serve."
Meanwhile, the rest of the world is moving fast. At the time of writing, the largest Japanese
mobile operator, NTT DoCoMo, was saying it would launch 3G services by October of this
year. In the US, Verizon and Sprint are both planning to offer 3G services later this
year-although neither has set a date for launch.
If, then, manufacturers fail to provide Europe's mobile companies with working equipment on
time, the region's operators face the prospect of falling behind their international rivals.
Last February in Cannes, France, a conference saw Qualcomm demonstrate a working 3G
system. Admittedly, this involved transmitting data to a personal computer rather than to a
phone, but the significance was not lost: Qualcomm's technology, CDMA2000, works -
today. Sprint says it will use CDMA2000 for its launch. Although Verizon has yet to make a
decision, it is resisting pressure from Vodafone, its partner, to adopt the European standard.
Europe's leading manufacturers remain confident. Tapio Hedman of Nokia's mobile division
says the company is on track to launch 3G handsets in the third quarter of 2002 and to be
making them in millions by the end of the year.
Arja Suominen, representing Nokia's infrastructure division, said deliveries of pilot
commercial systems would start next quarter with volume deliveries in the second half of the
year. And even if 3G is late, the Europeans can, they say, deploy GPRS (general packet
radio service), a souped-up version of 2G known as "2.5G". This standard offers many of
the advantages of 3G, such as being "always on", but without 3G's huge expense.
Why, then, do the worries persist? Qualcomm has been developing CDMA over many years.
Its version of 3G has been adopted by operators in the US, Japan and South Korea.
Nevertheless, in the late 1990s, when standards for 3G were being agreed, the European
authorities were determined to repeat the success of GSM. So, rather than accept a US
CDMA they opted for w-CDMA, a home-grown version.
A key point, however, was that while GSM operates at frequencies of 900MHz and
1,800MHz, the European authorities insisted that w-CDMA ran at 2.1GHz. While there are
some technical advantages in using this region of the spectrum, most observers believe
creating a European standard was above all a political move. "[T]his was a conscious effort
to force operators to invest in a technology that would recreate the success of GSM and
create a new export engine for Europe in the process," says one manufacturer.
But choosing 2.1GHz has drawbacks. First, manufacturers had to start from scratch to
design, build and test the system. Thus, operators have been unable to use their existing
GSM spectrum to introduce or test-market the new services.
Second, many more networks of base stations will have to be built because the signal
propagates poorly. This represents a huge investment on top of the colossal sums many
operators have already paid for 3G licences.
Third, because there will be, to begin with, only islands of 3G in a sea of GSM, handsets will
have to be able to operate seamlessly in both modes, switching spontaneously from 3G to
GSM according to the area. These phones represent a significant technical challenge.
The continent is on a knife edge. If the technology is delivered on time, Europe will maintain
its leadership position. If not, the initiative will inevitably pass to the US which will become the
source of the most advanced business and leisure applications for mobile phones, just as it
is for personal computers. |
