Analysis: Cellular accord may clear path to
3G phones
By Peter Clarke
EE Times
(03/26/99, 4:31 p.m. EDT)
NEW YORK — What's likely to be a rough-and-tumble race to build
third-generation cellular phone systems began in earnest this week when
Swedish phone giant L.M. Ericsson and Qualcomm Corp. struck a surprise
agreement to end a high-profile intellectual-property dispute over patents
for code-division multiple-access (CDMA) air interfaces.
The deal, which came Thursday (March 25) on the heels of a parallel
agreement on a 3G standard, dismantled a major hurdle on the road to a
new class of mobile voice and broadband data services that's seen as a
driver for the post-PC era. But the agreement also put new obstacles in
front of developers in the form of three fragmented, competing versions of
the air interface.
Ericsson (Stockholm) and Qualcomm (San Diego) said they will support a
CDMA radio interface standard that supports multiple modes of operation
in order to accommodate different radio interfaces in different parts of the
world. Qualcomm's CDMA2000, used primarily in the United States and
Korea to date, will coexist with separate versions of wideband CDMA
tailored to European and Japanese markets. Japan is the region pushing
hardest to deploy 3G, with services expected to start in 2001.
"Our agreement allows operators to chose one or more modes of operation
and ensures roaming," said Irwin Jacobs, chairman and chief executive
officer of Qualcomm, at a press conference here.
"We can now get on with our respective businesses without looking over
our shoulders," added Sven-Christer Nilsson, president and chief executive
officer of Ericsson.
The announcement clears the path for national regulators around the world
to license radio spectrum for 3G services, and for equipment and chip
makers to step up development plans for 3G solutions. But those solutions
may need to include numerous combinations of multiband, multimode and
multinetwork-aware terminals and basestations that will be more bulky,
costly and power-hungry than their predecessors.
Indeed, the proliferation of hybrid combinations could become a nightmare
of design, market planning and logistics for systems manufacturers. At the
same time, it's a potential a boon for those DSP and ASIC vendors whose
particular art will be needed in such systems.
"We've already been talking to people about the possibility of having
multiple modes," said Michael McMahan, director of wireless R&D for
Texas Instruments Inc. (Dallas), which claims its digital signal processors
are used in all of the current 3G basestation prototypes.
"In general it's possible to combine these things together, but there's a
penalty to pay for that," McMahan said. "Whether the market will stand for
that is a question, because the market is pretty cost-sensitive.
[Nonetheless,] I think there is some interest in multimode systems,
particularly from the carriers, who don't want to support multiple systems in
the field."
In the wake of the deal, Jane Zweig, executive vice president of market
watcher Herschel Shostek Associates (Wheaton, Md.), said she could
foresee Ericsson's developing a hybrid CDMA-GSM phone that would
work across all wireless networks.
Ultimately, such systems will require new baseband, RF and filtering
components, said Will Strauss, president of market watcher Forward
Concepts Co. (Tempe, Ariz.), which just completed a report on the 3G
transition. "The real challenge is whether the handset can deal with any
standard," Strauss said. "It is cost-prohibitive now, but it won't be in a
couple of years' time, when the DSP's price and horsepower should be
about right. Also, people want to see a single RF front end, but that will
take time."
Crafting software for such hybrid systems will require significant time and
detailed effort both in design and test, Strauss said. "It's a question of the
amount of memory and the programming, which will always be in
assembler. There's no thought of using C in the handset."
The market potential is expected to match the ambitious design
requirements. Forward Concepts predicts that as many as 352 million
cellular handsets will ship this year and increase to 800 million units in
2003, when 3G systems begin to kick in.
"This is the only market Intel has seen that will be bigger than the PC in five
years," Strauss said, referring to that company's recent decision to
co-design its first DSPs.
Coping with a fragmented cellular infrastructure is not a new struggle.
Already, as many as three types of cellular systems at 1.900 GHz and
another three at 800 MHz coexist in the United States, said Donald
Norman, a design consultant and principal of Nielsen Norman Group
(Atherton, Calif.). "It's hell when you buy a cell phone and you don't know
where it's going to work," Norman said. "I talked to a Motorola vice
president recently who said multiple standards will be disastrous. He said
the government should have just mandated the [second-generation
European] GSM standard everywhere."
The deal
Opening a door to a new market, Ericsson and Qualcomm said they would
enter into cross licenses for their respective patent portfolios and would
settle existing litigation between the companies. They will also provide the
International Telecommunication Union (ITU) with necessary assurances
that they will license their CDMA patents on a reasonable and
non-discriminatory basis to other parties.
Earlier, both Qualcomm and Ericsson had hedged their licensing offers with
conditions that had led to the ITU's threatening late last year to exclude
CDMA technologies from its standardization process.
An additional aspect of the deal is that, for an undisclosed sum, Ericsson
will buy Qualcomm's terrestrial CDMA wireless-infrastructure business,
including its R&D facilities, located in San Diego and in Boulder, Colo. The
agreement also gives Qualcomm the right to sublicense Ericsson patents to
Qualcomm's ASIC customers.
As a result, Jacobs said, Qualcomm will concentrate on its CDMA ASIC
and handset businesses, as well as its Eudora e-mail software, and will
pursue new developments in digital cinema, Jacobs said. Ericsson, for its
part, will make an aggressive push into basestations and other systems
based on Qualcomm's CDMA2000.
"We will gain additional competence in CDMA," Nilsson said. "We will
create a global center of excellence for CDMA2000 in San Diego. This will
allow us to develop and deploy CDMA2000 without detracting from the
resources needed for the wideband-CDMA and GSM community."
Strauss said Ericsson "has significantly broadened its market with this deal.
It will now rival Nokia as an infrastructure company. Ericsson will be
formidable."
Robert Rosenberg, president of Insight Research Corp. (Parsippany, N.J.),
called the agreement a coup for Ericsson, which gains strength from
Qualcomm's unique patent position.
ITU decision
The Ericsson-Qualcomm announcement comes in the wake of a meeting of
the International Telecommunications Union's ITU-R Task Group 8/1 in
Fortaleza, Brazil, where it was agreed that the 3G radio interface would be
specified by a single flexible standard offering a choice of multiple-access
methods. Covered under the interface spec would be CDMA,
time-division multiple access (TDMA) and TDMA/CDMA hybrids, all
potentially in combination with space-division multiple access. SDMA
effectively refers to the use of beam-forming antennas to allow the same
frequency band to be used in two, three or more directions, thereby
increasing the number of incoming and outgoing basestation calls that can
be supported.
The ITU released this statement justifying its decision to accommodate
flexibility: "There are already many multimode/multiband mobile units
appearing on the market to meet the evolution needs of today's systems,
and by early next century there should be negligible impact in areas such as
power consumption, size or cost due to the flexibility defined within the
standard, [as long as] harmonization efforts during the more detailed
definition stage are strongly focused toward the needs of the end user."
The group promised it would deliver such a detailed spec for its so-called
IMT-2000 approach to 3G by November.
In Japan, a spokeswoman for NTT Mobile Communications Network Inc.
(NTT Docomo) said her company welcomes the agreement between
Qualcomm and Ericsson. The wireless communication company, a
subsidiary of Nippon Telegraph and Telephone (NTT), proposed the
wideband CDMA format in 1997. After discussion and some modifications
to the spec, the Association of Radio Industries and Businesses in Japan
proposed W-CDMA to the ITU in June as the standard for
third-generation cellular phone systems.
Japan is rushing to launch next-generation cell phone service, in large part
because it is threatened by a lack of bandwidth for existing services — a
situation the spectrum-efficient W-CDMA technology would alleviate.
NTT Docomo started W-CDMA field tests in Tokyo in October and in
Singapore in February. Tests in Thailand with a local telephone company
are slated for autumn.
"The agreement between Qualcomm and Ericsson has eliminated a major
hindrance" to 3G, said an official at Japan's Ministry of Posts and
Telecommunications. MPT intends to hammer out 3G technical standards
for Japan as soon as the ITU completes its 3G framework.
In Washington, government officials crafting the U.S. position in the 3G
negotiations also praised the Ericsson/Qualcomm deal, as did industry
groups representing manufacturers. Previously, tensions over the issue had
been raised to the level of a war of letters between European
Commissioners and the U.S. Secretary of State. This week, most pointed
to the resolution of the rivals' patent dispute as the clearing of a key hurdle
in completing a global wireless standard.
"We applaud the parties, and we look forward to the good work that all
parties have been doing in the ITU IMT-2000 process," said Vonya
McCann, U.S. coordinator and deputy assistant secretary of state for
international communications and information policy.
The Ericsson/Qualcomm deal "does give us a better path to complete this
international standard by October," said Henry Straube of the Federal
Communications Commission's International Bureau and U.S. chairman of
an ITU task group on 3G standards.
Patent litigation between Ericsson and Qualcomm had been scheduled to
go to trial on June 7 in Marshall, Texas, and had proceeded beyond the
pretrial phase. U.S. observers said the litigants were loath to endure a
lengthy and costly trial.
Nonetheless, the ITU and equipment makers around the world had put
pressure on both parties to settle their differences. The ITU had said that if
its Fortaleza meeting did not select key characteristics of the radio
interface, the detailed standardization timetable program would be
jeopardized.
Jeff Belk, Qualcomm's vice president of marketing, said after Thursday's
announcementthat the "breakthrough" in the patent dispute came late last
year, when wireless operators started talking about specific technologies
they hoped to see included in a global wireless standard.
Despite the progress on standards and intellectual property, analyst Zweig
said questions about the business case for moving to 3G remain.
"It's going to be very expensive," Zweig said." European operators have to
bid on spectrum, and all the 3G networks still have to be built. And the
services are going to be expensive.
"I don't know if people will pay for all these e-mail and e-commerce
services, especially since the wired side technology will always be far ahead
of wireless," she said. "How they will be billed for these services is another
question."
Zweig noted that the push to 3G comes at a time when there is still a need
to finish building out second-generation cellular systems, for which sizable
holes in coverage persist.
Analyst Rosenberg pointed out that there's always been a disconnection in
the telecommunications markets between Europe and North America. He
suggested that the 3G agreement may be the beginning of truly global
telecommunications markets and that the harmonization might one day
trickle down to wireline services.
Nord would spectrum be involved in any of the prototypes ti's talking about in the article ? thanks danny |
