Tom, I think it's all part of negotiation. Telecom wants Lucent to do 1xEV-DO for less money. So they are considering other options to bring some pressure to bear. That's my estimation of the report.
Telecom has heaps of 800MHz spectrum and the cost of swapping to W-CDMA in 2GHz, some of which Telecom bought at auction about 3 years ago, would be uneconomic. Physics means the coverage is not as good as in 800MHz so to get more bang for their buck, they'll be using the 800MHz and 1xEV-DO, provided Lucent doesn't get too greedy.
Peter Griffin got the number of CDMA subscribers wrong [they wrote 60 million instead of 160 million]. Telecom was really dopey to let Vodafone come from nowhere to the lion's share of the mobile market. We don't have those amazing cyberphones they have in Japan and Korea yet.
Telecom can beat Vodafone, which is stuck with GPRS at the moment. Vodafone has to either build out 3G W-CDMA in 2GHz at enormous cost, which they have announced they will do, or come up with some other bright idea. A Telecom CDMA2000 network in 800MHz should beat a Vodafone W-CDMA network at 2GHz on capital cost alone. Plus the handsets for W-CDMA are more expensive and run slower than the 1xEV-DO hot stuff. Plus the bugs aren't fully out of the system yet [see D'oh!CoMo's Foma versus KDDI's Au for the market test results].
When WiFi and 1xEV-DO are built into a swanky little CDMA2000 cyberphone, Made in China, W-CDMA will be a hard sell. But the GSM Guild has surprised me for a few years now, so maybe W-CDMA will perform as promised by 2004/2005 and they'll hold the line. Vodafone has done a great job in New Zealand.
Mqurice
Another version here:
nzherald.co.nz
<Telecom's technical dilemma
06.10.2003
By PETER GRIFFIN telecoms writer
Telecom has signalled for the first time that it may make a radical technology switch for its planned third-generation (3G) mobile services.
It has begun looking at the merits of moving to W-CDMA, an advanced mobile standard backed by rivals Vodafone and TelstraClear.
If a change does result, it would have huge implications for equipment makers who have invested in mobile systems evolving from the CDMA standard used by Telecom, which, confusingly, is not compatible with W-CDMA.
Telecom, which shares roughly half of the mobile market with Vodafone, has confirmed that it has commissioned equipment makers Ericsson and Alcatel to undertake a radio-planning exercise, which will look at forgoing an upgrade of the current 027 network and replacing it with an entirely new and more expensive network.
"We've engaged some resources out of Ericsson and Alcatel to work with us on our long-term planning around W-CDMA," said Telecom's head of network investment, Stephen Crombie.
"We've got W-CDMA assets in Australia with Hutchison [but] we're committed along our CDMA path with the current network, which is performing really well."
Insiders say Telecom has become increasingly nervous at activity in the Vodafone and TelstraClear camps as they plan for 3G.
Vodafone managing director Tim Miles has committed his company to spending "hundreds of millions of dollars" over the next few years building a 3G network.
He has ruled out building a network in conjunction with TelstraClear, which has also sought proposals from Nokia, Ericsson, Siemens and Nortel for its own 3G network. TelstraClear at present has no mobile presence, only a resale agreement with Vodafone that it is unhappy with.
The cost of building a full 3G network has been put at between $500 million and $800 million.
Telecom's planning exercise is understood to consider a number of scenarios - from building W-CDMA networks in main centres and negotiating with Vodafone for roaming around the rest of the country, to overlaying its own network with GSM, the standard Telecom passed over when it built its 027 network.
This would be an admission that Telecom backed the wrong horse when it settled on the CDMA standard several years ago.
Globally, GSM is the dominant standard and is expected to pass the one-billion-subscriber mark this year, all of whom are destined to upgrade to W-CDMA handsets.
The CDMA standard has 60 million subscribers and networks, mainly in Asia and the US. A lack of seamless global roaming is its biggest downfall.
The big lure of 3G is considered to be its ability to handle video transfer - allowing such things as phone-to-phone video conferencing, video voicemail and messaging, the streaming of movie and music clips and live broadcast video.
Both W-CDMA and Telecom's logical upgrade path CDMA EV-DO boast access speeds up to 384 kilobits per second (Kbps), faster than many broadband packages now available.
TelstraClear will hold a 3G demonstration tomorrow in Auckland using video-calling with equipment supplied by Ericsson.
An industry expert on CDMA said Telecom was probably trying to plot a route to W-CDMA so as not to lose any more ground to Vodafone, which has jumped from a 17 per cent market share since 1997.
"They may be keen to learn more about W-CDMA so that they will have a better idea of how to respond when Vodafone deploys.
"Carriers in the US do this a lot to learn more about their competitors' technology. In the EU they all use the same technology so it's not an issue."
The deal is understood to have upset Telecom's existing mobile equipment partner, Lucent, which in June signed a five-year, $200 million contract with Telecom and has responsibility for managing the 027 network and planning for upgrades.
Managing director Ian Gardner would not comment on Telecom's deal, but said any move to 3G for Telecom was still some time away.
"We've a very clear competitive advantage with CDMA1X already and that's where we'll continue to focus. There is no competitive imperative to enhance the network at this stage."
Lucent would vigorously resist any move by Telecom to W-CDMA and would be able to take Telecom to 3G more quickly and cheaply.
"It is a relatively simple upgrade. Obviously, [W-CDMA] is building a new infrastructure," he said.
Ultimately, Telecom is hoping that bridging technology will remove any mobile compatibility issues before 3G really takes off.
That would allow a Telecom 027 phone user to roam on GSM networks in Europe, where CDMA is non-existent.
But such handsets are expensive to produce and are still up to a year away from being marketed.
"A lot is happening with handsets," said Telecom's Crombie.
"Qualcomm are coming out with multi-mode chips with GSM, W-CDMA and CDMA 2000.
"A whole lot of things will happen in the next few years that make these choices easier for us."
Crombie said Telecom's 3G play was still two to three years away but the rival standard had to be evaluated now. "The jury is out on all the technologies."
The path to 3G
The Telecom evolution:CDMA2000 - Code division multiple access, multiple transmissions carried simultaneously on a single radio frequency band.
CDMA1xRTT - Telecom's latest evolution, provides data transfer speeds averaging 60 kilobits per second (Kbps) to 80Kbps, twice as fast as dial-up internet.
CDMA1xEV-DO and EV-DV - Telecom's logical next step. Increases voice and data capacity with potential data transfer speeds up to several megabits per second (Mbps).
The Vodafone evolution:
GSM - Global system for mobile communications, the alternative to CDMA. A standard based on time division multiple access. All of Vodafone's customers use it.
GPRS - general packet radio service, with data speeds up to 114Kbps. The next step up from GSM. Popular among business mobile and Vodafone Live! users.
W-CDMA - wideband CDMA, a third-generation (3G) wireless technology for voice calls and data transfer at speeds of up to 2Mbps. This is the standard for Vodafone and TelstraClear and now Telecom is looking at it. While it is based on the same technology as Telecom's CDMA platform, it is a different standard and is the evolution from GPRS. W-CDMA competes with CDMA1x EV-DO and EV-DV.
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