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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (29067)	11/18/2002 9:40:47 PM
From: John Biddle	Read Replies (2) \| Respond to of 197723

Qualcomm to the rescue? Hardly By Fran Foo star-techcentral.com commentary Over the last 15 months, an American cell phone chipmaker called Qualcomm has been busy trying to "save" Singapore from falling behind in the 3G race. 3G, or third-generation mobile telephony, promises access to high-end, bandwidth-intensive applications such as audio and video streaming. Why does Qualcomm believe the island-state will be left behind? In a nutshell, its pitch to the IDA (Info-communications Development Authority of Singapore) is that operators paid an exorbitant amount to attain 3G licenses for the "wrong" spectrum. In 2000, Singapore Telecommunications (SingTel), StarHub and MobileOne each forked out a whopping S$100 million (US$57 million) for rights to the 1900- and 2100MHz bands. Qualcomm is touting the 800MHz spectrum, which it says is three times cheaper in terms of capital outlay for 3G infrastructure compared with the 2100MHz frequency. "This is because the 2100MHz spectrum requires operators to install eight times the number of base stations for the same amount of network coverage," said Marshall Towe, Qualcomm's vice president and managing director of Southeast Asia. Another point of contention is the type of channel or technology standard opted by Singapore operators. The trio have chosen to deploy 3G services based on w-CDMA, a popular standard among GSM (global system for mobile communications) operators. Qualcomm, on the other hand, is touting a competing standard called CDMA2000. While CDMA2000 can operate on 800MHz, 1900MHz and 2100MHz, among others, w-CDMA can only run on 1900MHz and 2100MHz. "A 3G network in the 2100MHz band, for instance, will require three times the capital outlay compared with a similar setup in the 800MHz band," Towe claimed in a recent interview. "Why should consumers be denied of 3G when telcos can spend less on 800MHz using CDMA2000?" Towe asks. At this stage, the 800MHz band isn't up for grabs. The IDA has steadfastly stuck to its decision that additional 3G spectrum, including 800MHz, will not be released until Jan. 1, 2006. Even if the IDA decides to release the 800MHz slot, what happens to the millions invested to obtain the licenses? Will the telcos operate on all three 3G frequencies? Will they abandon the other two to focus on the 800MHz frequency? How will they then justify S$100 million down the drain for two unused spectrums to shareholders? Who's the real winner in this scenario? If the operators manage to convince the IDA that the 800MHz spot is the next best thing to sliced bread, the main winner will be...Qualcomm, of course. After all, the San Diego, Calif.-based cellular chipmaker owns the rights to CDMA2000. On its part, Qualcomm has resorted to lobbying the IDA in the mainstream media, a sign that closed door talks with the regulator led to nought. Late last month, the company argued, through print advertisements, that 800MHz is a cheaper alternative for 3G network deployment and maintenance compared with the alloted 1900MHz and 2100MHz bands. However, during the interview, Towe couldn't provide any examples or specifics but said cost savings would depend on a case-by-case basis. The operators remain committed to w-CDMA although StarHub has expressed interest in testing the 800MHz band. But until the trio go up in arms over the "wrong" spectrum allocation and do some lobbying of their own, the IDA will not budge. And while Qualcomm's lobbying tactics is a refreshing change from the usually staid state of affairs in this fine city, it's difficult to perceive the effectiveness of such a move. As one industry observer put it: "All this is just Qualcomm's marketing machinery at work." Staff writer Irene Tham contributed to this article.