You got your guy, I've got mine, but mine is an Euro, too:
specials.ft.com
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.[Without licenses for either infra or handsets from Q, I might add]
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 their 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. [They could have just paid Q, but that would have been too simple and cost-effective, so it was time to cut off nose to spite face]
The European Commission has also given warning: "Product development for 3G terminals has not in the main progressed beyond proto-typing [in a van], 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 [You're under the gun boys, no month to six week vacations anymore].
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. [Everyone forgets that Sprint had GSM in DC, and dumped it] Although Verizon has yet to make a decision, it is resisting pressure from Vodafone, its partner, to adopt the European standard. [This is not exactly correct, but everyone here knows this]
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. [Got it marked on my calendar]
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. [In retrospect, a really stupid idea, never let the politics rule the science]
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. [But who's counting? Nokia, that's who]
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. |
