Breakthrough Ideas (continued)
Overlay GSM with GSM1x. At Cannes last year, Qualcomm introduced a unique convergence solution, available next year, named GSM1x. It takes full advantage of an operator’s investment in its existing feature-rich GSM/GPRS core network by combining it with the spectral efficiency of CDMA2000 radio access. GSM1x increases an operator’s voice and data capacity, enabling peak rates of 307 kbps per sector in a 1.25 MHz channel, within existing spectrum (800, 900, 1800, and 1900 MHZ). The GSM1x system overlays the GSM-RAN with its 1x-RAN, but is compatible with the GSM-MAP CN (landline and back-office). By using a GSM1x Mobile Switching Node, the interface to GSM-MAP remains unchanged. Standard CDMA2000 handsets with a R-UIM interface are software upgraded to accept SIM cards. GSM1x works across both GSM and 1x modes and dual bands.
Qualcomm based this GSM1x solution on earlier experimental trials in conjunction with Vodaphone in 1998 in England. At that time, Qualcomm demonstrated significant technical and economic advantages over GSM for both overlay and greenfield IS-95 CDMA solutions. Also, their tri-mode phones for GlobalStar already had introduced the technology needed for addressing either GSM-MAP or ANSI-41 core networks.
With relatively low infrastructure costs relative to its improved voice capacity, Qualcomm’s GSM1x solution permits GSM carriers to provide a combined voice and moderate-speed data, plus roaming across GSM and 1x networks. Asian infrastructure companies quickly announced handset and infrastructure availability for GSM1x. This solution is targeted toward Asia as the most likely early market. For instance, China Unicom has both GSM and 1x field trials in eight cities. The upgrade from IS-95 to 1x is simple. A CEO of a Sprint PCS subsidiary recently said that he personally changed the channel card in a BTS in 20 minutes, to bring 1X on line in one hour. With China’s emergent leadership in setting international roaming agreements, it is safe to assume that China understands the principle of reach in increasing network-value.
The increased spectral efficiency enabled by the 1x overlay solution increases user-capacity in markets that need it now or will need it later. Moreover, an operator can phase in the overlay by selecting its most crowded cells for initial upgrading, gaining increased capacity where it is most urgently needed.
To illustrate the advantages of the increased capacity this solution provides, consider an analysis by SI poster David Taylor that was based on a China Unicom white paper. Unicom knows that it can hold only 80 million GSM users in its 80MHz allocation (1 million users per 1 MHz). But, by allocating 40 MHz each to GSM and CDMA, Unicom estimated that its network could carry 40 million on GSM and 160 million on CDMA, for a total of 200 million users. Significantly increased capacity counts! siliconinvestor.com
If China overlays its GSM networks with GSM1x, follows this by adding 1xEV-DO for high data rates, uses BREW enabled handset with color screens, position location, and useful applications, and does so by using ZIF architecture to maintain small handset size at reduced cost as it adds multi-media to multi-mode functioning, it will drive its market successfully. Invest in GSM1x infrastructure and handsets, and you not only increase voice capacity, but also you open an upgrade path that ends in a world phone. Can you compute that changeable colored covers cannot compete with these remarkable improvements in network functionality?
Understanding the capacity advantage of spread spectrum and the rapid, but seamless, evolution to CDMA2000 1X, with its doubling of voice capacity that is to double again in 2005, is crucial not only for the operator but also for the investor. Wireless spectrum is a limited good; as networks become filled to capacity, the spectral efficiency of spread spectrum trumps all other considerations for operators. Qualcomm’s knowledge permitted universal frequency reuse, reduced interference, and gained processing power, thereby efficiently getting more for less from a band of spectrum, a physically limited resource. Why else would the Europeans agree that spread spectrum was required to produce a third-generation network? Instead of throwing good money after bad, there are good reasons to switch to GSM1x.
Companies like Samsung who have attended CDMA University understand this. For evidence, see: totaltele.com
During the fervor created by the World Cup and Korea’s starring performance, a V.P. of Samsung is quoted as saying he was “doubtful of WCDMA in Korea.” Another V.P. outlined Samsung’s mission to encourage GSM operators to adopt cdma2000 1x overlays instead of building whole new networks based on WCDMA, mentioning SingTel as a prospect. The two operators who were to build WCDMA networks in Korea have already rolled out 1xEV-DO networks with great success. All OEM’s are agnostic about winners and hedge the future by taking an option to provide all contenders until one becomes chosen. When Samsung’s executives at press conferences make these casual remarks, they are announcing their chosen winner. This is not to say that Samsung won’t also supply GSM or UMTS markets. When it can, it will. But, it does say which way Samsung believes the wind is blowing.
Sell 1xEV-DO. If there is spectrum available for a separate 1.25 MHz carrier for1xEV-DO, operators can add this solution as: (1) a data only, data optimized high-data-rate solution with IP backhaul that is independent of mobile or PSTN voice networks, which Airvana claims will save 70% of those backhauling costs; (2) a dynamic alternative to use within GSM1x voice networks to flexibly meet changing demands for voice or data. Selling 1xEV-DO solutions represents large opportunities, as either a mobile telecommunication solution for high data rates, as a multi-mode variant, or as a primary Internet solution.
If data delivery using Internet Protocol is the wave of the future, then wireless VPNs or VoIPs represent a part of that future. Qualcomm’s solution competes in this market. If always on, always with you connectivity becomes a perceived need or develops into a universal desire, then Qualcomm must play a key mobile role because it controls a crucial architectural interface¾the spread spectrum airlink¾and provides a stabilizing and expanding platform for its delivery. If wireless becomes the best or only available option for last mile delivery, then there will be widespread fixed as well as mobile wireless Internet. Having licensed Qualcomm’s CDMA, SOMA, ComDev, Airvana, and Monet are competing in this market.
450 MHz market. According to EMC research analyst, Devine Kofiloto, CDMA-450 is becoming a credible replacement in Europe for the analog NMT. Citing a lack of satisfactory interest from operators, Nokia and Ericsson decided not to continue pursuing the GSM-400 standard, leaving the field to Qualcomm as the only option. He concluded:
e-searchwireless.com
“As unlikely as this might have seemed a couple of months back, CDMA-450 looks poised to become the technology of choice in at least Sweden and Norway, should the regulatory authorities decide to favour the transition from analogue to digital. Looking at current market developments, the prospects of a GSM type development at 450MHz looks increasingly improbable. On the background of successful CDMA-450 deployment in Romania and advanced pilot trials in Moscow and St Petersburg, the case for CDMA-450 looks strong.”
What’s this? CDMA in Europe, even in Scandinavia’s Arctic playgrounds? Trials in Sweden’s Northern Uppland’s Uppsala and Oregrund?
Part of Qualcomm’s European strategy involves Inquam’s pursuit of 450MHz-band markets in Europe. Compared to higher bandwidths, low bandwidth spectrum is privileged for coverage, but not capacity. Lower frequency radio waves propagate well over distance, requiring fewer base stations, but their longer cycles reduce the amount of information that can be modulated in the resulting fewer waves per unit of time. However, this band, formerly the home of outdated analog systems, can carry 1X and 1xEV-DO.
Qualcomm Strategic Initiatives (QSI) made $ 113M cash investment, with $97M more as an unfunded commitment, in Inquam, which is a CDMA venture capital and 450-MHz operating group. On December 7 2001, Inquam’s operators commercialized 1x services in Romania. According to Qualcomm at its May Analyst’s Meeting, operations are targeted in Bulgaria, Portugal, Denmark, and Russia. Politics in Russia has been hot and heavy, with the potentially largest 450-market and the potential for becoming a state-recognized national carrier. Lucent is active behind the scenes as well as upstage as the principal 450-infrastructure vendor. However, recently, China’s ZTE and Huawei also entered the Russian and former Soviet Republic Asian countries’ markets. China will export this technology because it has considerable influence in Burma, Thailand, Malaysia, and Indonesia. Also, Inquam recently purchased Tetra Dolphin Telecom in England for pence on the pound. Tetra networks are intended to be data networks, but everyone wonders what Inquam will do.
Stranded TDMA. In June 2001, the Shosteck Group presented a white paper analysis of GSM or CDMA: The Commercial and Technology Challenges for TDMA Operators. At the end of its life cycle, TDMA is an “orphan technology” that can fill only a short-term need and cannot evolve.
cdg.org
The Shosteck Group states that AT&T’s approach is premised on taking advantage of the economies in the manufacturing scale of GSM and in the R&D of the GSM transition path (GPRS and EDGE). This advantage is presumed to transfer to UMTS, which AT&T expects to dominate the market over time, just as GSM did. “Indeed, this premise of long-term economies of R&D and manufacturing scale is the fundamental rationale underlying the choice of GSM as a 3G-transition path” (2001, p. 4, original emphasis).
It is this premise that I believe to be called into question by Qualcomm’s three breakthrough ideas. These breakthroughs not only make them the master of spread spectrum but also impart control of its architecture. Possessing architectural control assigns to Qualcomm the ability to shape the global future of this third-generation. If AT&T recognizes this alternative prospect, it will neither admit nor accept it.
The Shosteck Group uncovered four potential barriers to adopting GSM: (1) the uncertain availability of GSM 800 infrastructure and, especially, TDMA-GSM handsets [that is, will vendors have incentives to overcome the “reality gap” of over promised performance and delayed delivery of terminals for a stranded technology in a new frequency band]; (2) the uncertainty of whether the TDMA-GSM terminal gate [the developing GAIT standard for GSM-ANSI] will access the GSM MAP core network’s applications and services; (3) the possible need to deploy a denser [read: more base stations] GSM network than envisioned; and (4) The uncertain availability of spectrum at 1900 and 2100 required for migration to UMTS [taking a chance on the FCC].
The Shosteck Group considered handset availability and the uncertainty of the FCC granting UMTS spectrum to be especially important. Also, they noted, “the daunting engineering challenges inherent in employing EDGE,” “the possibility that EDGE may never reach commercial fruition,” and “the likelihood that some GSM operators will bypass it.”
Because 1x offers such a substantial increase in voice capacity and much earlier data services and applications, Qualcomm believes it offers a better path for migration. U.S. Cellular agrees and is converting to 1X in all markets, signing a contract with Nortel for 3,500 1X base stations over the next five years. In Alaska, ACS Wireless is converting; Cellular South is converting its Mississippi and Memphis market. Nextel plans to convert to 1X and to use QChat for its Direct Connect services. Abroad, Movilnet is converting to 1X in Venezuela. The International subsidiaries of Bell South and Verizon plan similar conversions from TDMA to 1X in Latin America. |
