qdog - I'm new to this thread & usually just lurk unless I can contribute something meaningful. I came across the following in today's IBD. Could you share your comments on it - is it a threat to qcom? - Thanks
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Europe, Japan May Lead In Creating Cell Standard
Date: 1/19/98
Author: Reinhardt Krause
The wrangling over next- generation cellular phone systems is about to hit the boiling point.
Europe is close to picking a new cellular standard that might take off so fast U.S. firms will be left behind.
Equipment makers and wireless carriers have much to gain or lose, depending on what technical standards win out.
These ''third-generation'' cell networks will outperform the first-generation analog and second-generation digital systems now in use. They'll employ more advanced techniques to compress voice, data and video over radio space, speeding transmissions.
Europe and Japan seem to agree on key technical points for these compression techniques. This will lead to new networks being built in Japan in two to three years, with Europe and then the U.S. following.
Where Europe and Japan are entrusting the standards setting to government agencies, the U.S. cellular industry wants the market to decide.
''It's foolhardy to spend a lot of time and effort trying to pick winners and losers,'' said John Mariho, technology director of Lucent Technologies Inc.'s wireless network group.
He also chairs a U.S. wireless industry group that is developing U.S. standards. ''Technology is not something you can have a group of engineers in a room decide for the marketplace,'' Mariho said.
The U.S. is just starting to upgrade its second-generation digital technology. These personal communications services systems operate at higher radio frequencies than older analog networks. PCS-based cell phones offer clearer voice quality as well as paging and other services.
The rub, though, is that three types of PCS networks are being built in the U.S. And the radio frequencies allocated for PCS in the U.S. overlap the spectrum intended for third-generation networks worldwide. So many U.S. cell firms favor letting third-generation technologies vie for supremacy.
''In the telecom industry there is a move toward deregulation, and with that, standards become voluntary,'' said Michael Buhrmann, president of the Universal Wireless Communications Consortium.
Buhrmann's group supports a compression technology called time division multiple access. AT&T Corp., BellSouth Cellular Corp. and Southwestern Bell Mobile Systems Corp. operate TDMA-based networks.
''Standards are really set by an adoption rate, by certain (manufacturing) volumes that lower price,'' Buhrmann said.
In Europe, though, regulators play a big role in setting standards. In the early '90s, Europe set the group speciale for mobile standard. GSM-based networks now also operate in the U.S. and Asia.
In December, the European Telecommunications Standards Institute took a nonbinding vote on what third-generation standards should be chosen. ETSI plans another vote within a month or so.
December's close vote favored an approach supported by Sweden's L.M. Ericsson Telephone Co., Finland's Nokia Corp. and Japan's NTT DoCoMo Corp.
Their proposed standard is a variant of code division multiple access compression technology. It would be compatible with Europe's existing network.
But a rival group opposes this CDMA standard. Motorola Inc., Canada's Northern Telecom Ltd., Germany's Siemens AG and France's Alcatel Alsthom are among the companies in this group.
They support a hybrid technology meshing both TDMA and CDMA. The group claims the hybrid system would make upgrades to the third generation easier.
The Ericcson/Nokia/DoCoMo camp is still expected to win, analysts say. But the battle may not be over.
''It would be difficult for me to imagine - given the constituency they represent -that they (TDMA/CDMA hybrid faction) would just roll over and go away,'' said Lucent's Mariho.
There's plenty at stake in the standards brawl, says Crispin Vicars, analyst at Boston-based Yankee Group.
''If you look at the Japanese vendor community, they largely missed out on . . . second-generation networks,'' he said. ''If Japan takes a leading role in third generation, it provides an opportunity for their (companies).''
Many suppliers of wireless gear say they're neutral on the standards issue.
Lucent, for example, says it can move in any direction.
Still, equipment makers invest billions of dollars in research and development. Standards obviously affect those efforts, analysts say.
U.S. groups are mulling what to recommend to the International Telecommunications Union, which sets worldwide telecom standards.
''There are a variety of industry coalitions, all with entrenched interests,'' said Alan Reiter, a consultant in Chevy Chase, Md.
Japan is rushing to build third-generation networks because its existing analog and digital networks are running out of capacity.
Europe is expected to launch its third-generation network in '02.
It's still early for third-generation networks in the U.S. Kansas City, Mo.-based Sprint Corp., for example, is still building its second-generation PCS network.
Sprint's PCS network is CDMA-based. Like other carriers, Sprint is assessing demand for third-generation services from consumers and businesses.
The advanced networks will offer faster data links to the Internet. Global roaming - the ability to make or get a cell call anywhere - is another expected feature, industry analysts say.
The third-generation networks may also be tied more closely with conventional, land-line phone systems. Consumers could use one phone number for both cell and land-line phones.
Third-generation systems also will be able to handle such multimedia services as full- motion video, say supporters. Still, some analysts harbor doubts.
'' 'Internet,' 'videoconferencing,' 'multimedia' are buzzwords,'' said Reiter. ''Bandwidth is at a premium. How much will people pay for these services? How much will it cost?''
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(C) Copyright 1998 Investors Business Daily, Inc.
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