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The advantages of UMTS with respect to current cellular networks are: UMTS can be seen as the convergence technology of mobile, fixed and internet type of communications. During the last ten years GSM has made mobile communication accessible to almost anybody in Europe and elsewhere. The next step is to offer high speed access also to mobile (wireless) users, very much the same way as it starts to develop with terrestrial and multimedia satellite networks. An additional communication network is required to satisfy the needs of the future wireless multimedia customer. This new service, referred to as UMTS or IMT-2000, should be available on a global basis and should be based on a globally accepted standard. The major service objectives as set forth by ETSI are: integration of residential, office and cellular services into a single system based on one piece of user equipment; service capability up to multimedia; unique user number independent of network and service provider; capacity and capability to serve more than 50 percent of the population; radio bearer services up to 144 Kb/s and further to 2 Mb/s (indoor); creation of a direct satellite access. The satellite UMTS component will make the outdoor coverage globally seamless with minimum modifications in services and user terminals. The major objectives for the satellite UMTS component are: to provide access to the UMTS satellite services throughout the European region and to extend this facility to other regions of the world; to provide global roaming to UMTS users; to provide a quality of service commensurate with terrestrial at affordable cost; to provide rapid and cost effective deployment of UMTS services over large geographical regions and to augment the development of telecommunication services in developing countries. |
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It
has become obvious that UMTS has an enormous potential for the upcoming
mobile telecommunication systems. Code Division Multiple Access (CDMA)
plays an important role in these developments. Also it is acknowledged
that satellite communications business in relation to its integration in
UMTS will become very important too.
Mobile Communications has been one of the fastest growing segments of the telecommunications market over the last five years. This is evidenced by the spectacular growth in GSM subscribers and investment. Since its commercial launch in 1992, GSM, and its related technologies, DCS-1800 and PCS-1900, have emerged as a world standard for mobile communications with services provided through nearly 200 networks to more than 30 million users in over 100 countries. Asia is becoming one of the biggest customers for GSM systems whilst in the USA PCS-1900 is enjoying early success. GSM growth is mirrored by the continuing uptake of other mobile and wireless technologies in Europe and in other parts of the World. These systems include cordless telephony, wireless networks for phones and computers within buildings, paging and the use of wireless technologies to compete with the fixed public network in the local loop. Satellite-based personal communications systems will offer a further stimulus to the take up of mobile communications. Satellite systems allow for the delivery of advanced communications services, often requiring high capacity transmission, in parts of the World where terrestrial networks are underdeveloped. They may also offer cost effective coverage of more remote regions of Europe. Japan is preparing for a mass consumer market, a market where Japanese industry traditionally has strength, and industry momentum is building up. In the USA, new satellite based concepts are being developed (e.g. the CDMA based satellite constellations like Globalstar, ECCO, Ellipso,..) whilst CDMA is also heavily promoted by its industry as an alternative and competitive radio access technology for terrestrial mobile cellular communications. Satellite-based mobile systems offer the prospect of world-wide roaming and can complete the gaps in regions with less developed communications networks. The European market of the year 2005 is expected to represent over 100 Billion $ of annual revenues and some 200 million subscribers. The global market is anticipated to grow even faster, in particular in Asia. The world-wide
growth of mobile communications is shown in the table below. The North
American and European markets are expected to reach saturation first as
can be seen in the table. But even in 2015, markets in Asia, Africa and
South America are expected to be far from saturation, even without taking
population growth into account.
Mobile communications has become an essential tool for businesses of every size, but are also reaching an increasing number of homes and as such has now an important social economic function. In Scandinavia more than one in four people has a mobile phone, sometimes instead of having a fixed connection. Overall, the value of owning and using a mobile phone is set to increase. Mobile phone users soon will be able to obtain a single device comprising what would now be two or three different types of telephones (cellular, satellite and personal communication service) capable of switching automatically between systems and allowing a subscriber to be reached anywhere on earth at any time on a single number. The big question in the wireless world is which standard will be predominate the world to provide these services? As a manufacturer , one needs preparing for the next generation handsets markets. European cellular manufacturers are already well advanced in their plans to introduce a third-generation cellular system to take over from GSM over the next decade. Members of ETSI, have taken a vote on the new radio access technologies for the third generation (3G) phone, formally referred to as the Universal Mobile Telephone System (UMTS): The technology is based on Wideband CDMA radio access technology with certain features of TD/CDMA incorporated. (Find here a Summary of ETSI's IPR policy) UMTS is described as providing "personalised globally accessible high quality mobile communications services" meeting such objectives as integration of fixed and mobile services allowing use of a single terminal, multimedia capability, low cost, and high frequency spectrum efficiency. Since its commercial launch in 1992, GSM has emerged as a World standard for mobile communications. With the quasi-exception of Europe where GSM stands as the single digital system today, the situation in terms of cellular systems world-wide is characterised by a diversity of technologies, both analogue and digital, that compete for customers. As a result global roaming outside of the GSM system is practically impossible and sometimes difficult even at national level. A user, when traveling, is obliged to rent a suitable terminal at the destination, but he or she may find it difficult to remain in touch. Such competition between systems, has lead to present efforts in the areas of multi-mode and multi-band terminals, capable of "talking" the different regional "languages". The prospect of global mobility is now offered by Satellite-based Personal Communications Systems (S-PCS) which will is being launched over the next two years, in many cases using hybrid terminals, which support both the satellite service and terrestrial mobile services. These systems not only provide the possibility for users to remain in contact whilst traveling in parts of the World with relatively undeveloped telecommunications networks, but also offer users a potential means of accessing broadband capacity. The developments around the World in mobile and wireless communications and satellite-PCS do not stand by themselves but must be seen in a wider strategic context. Future Mobile solutions based on techniques like W-CDMA offer improved capacity and coverage through the use of multipath propagation in a manner that is more efficient than current narrowband systems, particularly in indoor environments. This technique would need to minimize fading problems often experienced on current systems. Capacity advantages should also accrue because of the capability for hand-offs between different radio frequencies. Of course ETSI requirements of 3G need to be respected: wireless data rates of 144 kbps at mobile speeds, 384 kbps at pedestrian speeds and 2Mbps in a stationary environment. List of UMTS Objectives
List of used abbreviations: When we were young Back in 1982, the European Conference of Posts and Telecommunications (CEPT) formed the Groupe Speciale Mobile (GSM) committee to develop a second-generation, digital, pan-European cellular system. The main reason for this move was that European countries were using a number of incompatible analogue cellular standards, so a single harmonised standard would create greater manufacturing economies of scale, as well as facilitating pan-European roaming. The operators from the CEPT countries signed a Memorandum of Understanding (MoU) in which they all agreed to deploy the new GSM standard at the same 900MHz frequency. In 1989, CEPT transferred the GSM committee to the European Telecommunications Standards Institute (ETSI), which completed the specifications of the system in the late 1980s and commercial service was introduced in 1992. The subsequent success of the GSM standard throughout the world has led some to suggest that ulterior motives were at play. At the recent US House of Representatives hearing on US and European trade relations, Kevin Kelly, Qualcomm's senior vice president of external affairs, gave his view of events. "Once Europe had its common cellular standard, the game changed from devising legitimate technical standards to creating an exclusionary industrial policy that would enable European manufacturers to market GSM around the world from their protected home market," said Kelly. "The nature of the GSM MoU was expanded to include all operators 'committed to building and implementing GSM-based systems and government regulators/administrations which issue commercial mobile telecommunications licenses.' The scope and objectives of the GSM MoU were also broadened to promote GSM as a standard around the world." Meanwhile, Qualcomm was busy commercialising a spread spectrum military radio technology called CDMA, adapting its operational bandwidth from 5MHz to 1.25MHz and filing numerous patents in the process. It wasn't until 1997 that, under the guidance of the CDMA Development Group (CDG), the IS-95 CDMA standard was branded as cdmaOne. Shape of things to come In 1985, the ITU began planning for the future of the wireless communications industry. Its initiative was originally known as the Future Public Land Mobile Telecommunications Systems (FPLMTS). The project was changed to International Mobile Telecommunications 2000 (IMT-2000) in 1996. IMT-2000 refers not only to the date, a new system for a new millenium, but also the frequency band allocated, 2GHz. Its aim is to ensure a feature-rich, broadband, interoperable global solution based on multiple technology alternatives. Operators around the world will be able to provide their customers with higher data rates and enhanced performance to support the emerging mobile multimedia environment. IMT-2000 work is being conducted by two ITU bureau working groups; ITU-R TG 8/1 and ITU-T SG 11/3. ITU-R is concerned with the development of the radio interface. The goal is for a single, harmonised air interface across all third generation network architectures. Whether this is actually feasible though is now in question. The deadline for the development and submission of candidate technologies was 30 June this year. In all, 15 different proposals were received and of these, ten were for terrestrial systems (see figure 1). The two principle proposals are UTRA (UMTS terrestrial radio access) and cdma2000 (an enhancement of the cdmaOne system). Universal mobile telecommunications system (UMTS) is the European system standard, based on wideband CDMA (W-CDMA). Overlapping this deadline was the evaluation period, with tests conducted by ITU-registered evaluation groups, which were completed on 30 September. Technical Group 8/1 is now engaged in the final evaluation and consensus process, which has to be completed by March 1999. The aim is then to develop the ITU's radio interface Recommendation, or recommendations, by the end of 1999. There are two separate discussion meetings in which to achieve consensus. These will be held in Jersey, UK, during 9 to 20 November, and then in Brazil during 1 to 12 March 1999. ITU-T is concerned with the terrestrial network architectures. It was ITU-T that proposed the 'family of systems' concept. The aim is to support subscriber roaming between different 'family members', e.g. one member might be a cdma2000-based operator, the other a UMTS operator. A consistent set of service offerings will be provided, based on IMT-2000 capability sets. Study Group 11/3 will produce recommendations for all signalling requirements. The European mobile industry united behind the ETSI banner to formulate its strategy. After all, it worked for GSM. It based its proposals on research work conducted by various European Commission (EC) funded projects, including the 1989 to 1992 RACE programme, and the subsequent CODIT and FRAMES projects. This is not to forget the work conducted in Japan by NTT DoCoMo in the mid-1990s. ETSI's members consist of manufacturers, operators and regulators based in Europe. Voting rights are weighted, according to the size (in terms of revenue) of the companies. In terms of UMTS standardisation, ETSI has two distinct groupings. The Special Mobile Group (SMG) holds regular meetings, and interested parties pay to send their representatives. The SMG Specialist Task Force is a permanent, financed body that provides back office support. This year, ETSI announced its UMTS globalisation initiative. It formed the UMTS Global Technical Specification Group, and the associated IPR Task Force. This will encourage input from other egional standards bodies, including ANSI T1P1 from the US and ARIB and TTC from Japan. "The aim is to produce specifications. These will then go back to the regions if they want to publish a standard. The whole European 3G proposal consists of the UTRA radio interface, which will operate in two modes (W-CDMA and TD-CDMA), and an evolution of the GSM MAP network. ETSI intends to have its UMTS Phase 1 specification ready at the end of 1999. Pre-operational trials are scheduled during 2001, with commercial operation of Phase 1 networks starting in 2002. Despite the apparent diversity of radio transmission proposals, the Europeans believe that these may be reduced to just two, creating a Mexican standoff between W-CDMA and cdma2000. "There is an opportunity to harmonise the five W-CDMA varients," said Jonas Sundborg, standardisation manager at Ericsson Radio Systems. "And the cdma2000 and Korean synchronised CDMA proposals could also be harmonised." Ericsson also believes that the Chinese proposal can operate with W-CDMA. The TD-SCDMA proposal is a pure low mobility/indoor solution, and as such may align with the TD-CDMA mode of the UTRA proposal. The UWC TDMA proposal has an EDGE-compatible access channel, up to 384kbit/s, and therefore will be compatible with enhanced GSM networks and W-CDMA. Qualcomm, on
the other hand, believes that all the proposals can be unified, with a
fair degree of give and take from both sides. "There are far more commonalities
than differences," said Molly Foerster, director of business development
at Qualcomm Europe, keen to stress the common ground between the proposals:
". We think the two CDMA standards [cdma2000 and W-CDMA] should be converged
to one." So why doesn't the rest of the industry, particulary the Europeans,
agree?
Clause 3.1: Standards shall be based on solutions which best meet the technical objectives of the European telecommunications sector, as defined by the General Assembly. In order to further this objective the ETSI IPR policy seeks to reduce the risk to ETSI, members, and others applying ETSI standards, that investment in the preparation, adoption and application of standards could be wasted as a result of an 'essential IPR' for a standard being unavailable. 'Essential' as applied to IPR means that it is not possible on technical (but not commercial) grounds, taking into account normal technical practice and the state of the art generally available at the time of standardization, to make, sell, lease, otherwise dispose of, repair, use or operate equipment or methods which comply with a standard without infringing that IPR. Clause 3.2: IPR holders whether members of ETSI and their affiliates or third parties, should be adequately and fairly rewarded for the use of their IPRs in the implementation of standards. Clause 6.1: When an essential IPR relating to a particular standard is brought to the attention of ETSI, the Director-General of ETSI shall immediately request the owner to give within three months an undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non-discriminatory terms and conditions under such IPR. [This] undertaking may be made subject to the condition that those who seek licences agree to reciprocate. Clause 8.2: Non-availability of licences from third parties: Where, in respect of a standard, ETSI becomes aware that licences are not available from a third party in accordance with Clause 6.1, that standard shall be referred to the Director-General of ETSI for further consideration in accordance with the following procedure: i) The Director-General shall request full supporting details from any member who has complained that licences are not available in accordance with Clause 6.1. ii) The Director-General shall write to the IPR owner concerned for an explanation and request that licences be granted according to Clause 6.1. iii) Where the IPR owner refuses the Director-General's request or does not answer the letter within three months, the Director-General shall inform the General Assembly. A vote shall be taken in the General Assembly on an individual weighted basis to immediately refer the standard to the relevant committee to modify it so that the IPR is no longer essential. NB: no decisions shall be taken by ETSI in relation to implementation of the policy unless supported by a 71% majority of the weighted individual votes cast by members. iv) Where the vote in the General Assembly does not succeed, then the General Assembly shall, where appropriate, consult the ETSI Counsellors with a view to finding a solution to the problem. In parallel, the General Assembly may request appropriate members to use their good offices to find a solution to the problem. v) Where (iv) does not lead to a solution, then the General Assembly shall request the European Commission to see what further action may be appropriate, including non-recognition of the standard in question.
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Over
the past years, GSMs popularity has been enhanced greatly by the liberalisation
of telecoms regimes and the injection of competition in the market. Typically
every country in Europe has now at least two competing GSM operators.
Ericsson and Qualcomm reach agreement (March 25, 1999) 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. The announcement clears the path for national regulators around the world to license radio spectrum for 3G services. 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 1999 and increase to 800 million units in 2003, when 3G systems begin to kick in.
The issues are somewhat complex and can be very misleading. Even George Gilder got caught by the 3G spin. In his Forbes/Gilder Technology Report, he enthusiastically shouts that: "the bottom line is that Qualcomm has won. For all its global dominace, GSM TDMA is becoming a legacy system." But before we all get too caught up in the transatlantic wrangles, it is worth stepping back and putting current developments into an historical perspective. Paradise lost At another hearing this year before the US House of Representatives, this time on technology standards, John Major, Qualcomm executive vice president, told the assembly that W-CDMA had been made intentionally incompatible with cdmaOne. "The W-CDMA standard offered by ETSI provides no technical advantages to cdma2000," said Major. "A small group of manufacturers and their partner governments whose actions are motivated by industrial policy rather than consumer choice appear to be operating in concert, outside of the ITU consensus-building process, to set preemptively a standard for third-generations service. This supposedly 'revolutionary' European approach effectively precludes more than half of the world from their revolution by not providing a migration path to the next generation." A Qualcomm press release went further, stating that: "ETSI and others are promoting a W-CDMA standard that does not meet with the basic principles espoused by Major. This variant of CDMA cannot deliver what it promises." But in Ericsson's view, harmonising with Qualcomm's proposal would require compromising the W-CDMA standard as the new single standard would have to interoperate with cdmaOne networks. "We don't want any backwards compatibility," said Ericsson's Sundborg. "IS-95 was optimised for speech. Why rely on this? We need to take advantage of the wideband component and optimise third generation networks for data." Mats Nilsson, director of technical strategies for future systems at Ericsson, added that: "In its early stages, 3G systems won't generate as much revenues as second generation ones, so 3G has to be built upon 2G systems." Qualcomm has stated that there are five key technical principles to be addressed:
"One of the last remaining differences between W-CDMA and cdma2000 is the chip rate," said LaForge. "We originally stated that the ETSI proposed chip rate of 4.096 mcps would not work when attempting to implement the system in a 5MHz block of spectrum. It is now recognised that, indeed, this is true. ARIB has studied the chip rate issue and has concluded that the choice of this parameter value has no bearing on overall performance. Agreeing on a common chip rate parameter does not reduce performance, but it does create economies of scale. Harmonizing chip rates sounds like an obvious solution, but if you want harmonization to fail for competitive reasons, you fight it. You attack it by incorrectly claiming that it would have a 'significant perfomance impact'. This is the situation that we have for 3G. There appears to be no technical rationale for not achieving consensus, unless it is in your interest to destabilise the harmonization efforts." A 'compromise' chip rate of 3.840 mcps has been proposed, to no great interest, and a possible dual chip rate option would unnecessarily complicate handset production - a conclusion that both sides must surely agree on. "It is important to make the chip rate as high as possible to give maximum capacity," Nilsson told CI, "but it must be below the allocated 5MHz: therefore 4.096 mcps. A lower value reduces capacity and a higher adds interference. Actually, if it was optimised for dual-mode GSM, then we would have set it at 4.330 mcps." Dr J T Bergqvist, senior vice president of radio access systems at Nokia Telecommunications, added that: "It was Japan that originally proposed the 4.096 chip rate, not Europe. But I would not like us to focus on the chip rate. It is just one of the parameters. It is not the most important thing" (see figure 2). Of the other differences, the issue of synchronised base stations looks like the most important stubbling block. "Europe didn't want to have synchronised base stations in the GSM specification, because of the reliance on the global positioning system (GPS)," said Ericsson's Sundborg. GPS is a military technology controlled by the US government, and there is always the risk that the GPS facility could be turned off, rendering mobile networks useless. Both cdmaOne and the proposed cdma2000 systems use synchronised base station, unlike GSM and the W-CDMA proposal. "With synchronised base stations you need to be able to see the GPS satellites, which makes siting them indoors very difficult," said Nilsson. On another point, he added that: "cdma2000 has no support for interfrequency handover, so it can't seemlessly handover to second generation cdmaOne." William Bold, vice president for government affairs at Qualcomm, told CI that: "We would be disappointed if any group went outside the ITU and its recommendations. It's not as if we haven't moved, we've moved a lot. And we're not insisting in our choice, we're saying let's have a technical test, a technical 'shoot out'." "If [the differences] don't provide a technical advantage, then what do they provide?" asked Foerster. "It's a business advantage ‹ for manufacturers, not operators." "Qualcomm has actively participated in the ETSI process, and while ETSI has had every opportunity to evaluate cdma2000, they have shown little interest in anything that differs from the single W-CDMA proposal," said Bold. "Serious talks are occurring around the world among standards bodies on the topic of converging cdma2000 and W-CDMA for 3G. We regret that to date, ETSI has chosen not to give serious attention to cdma2000 and to convergence of the two proposals in its discussions with these other regional standards bodies." In the meantime, Bold confirmed that Qualcomm would "continue the iteration process for our cdmaOne customers, regardless of W-CDMA". It also firmly believes that cdma2000 will work better for those operators who won't get the full new spectrum allocation. Fair play for all Moving on from the technical arguements, Qualcomm is seeking the support of the US government, citing possible infringements of trans Atlantic trade agreements. Although as Bill Bold told CI: "The US government doesn't need much prodding to focus on an issue of this scope, they are up to speed on this one." At the US House hearing on international standards in June, Congresswoman Morella made her views known in her opening statement. "I am convinced that as long as long as the international standard setting process is driven by the merits of individual technologies, and not protectionist policies, US manufacturers and service providers will fare extremely well," said Morella. "The key will be to ensure that the international standards setting process does not impede fair competition." This was followed by a second appearance by Qualcomm before the House, this time in front of the Ways and Means committee. "Europe's exclusionary industrial policy has created an impossible environment for developers of alternative wireless technologies wishing to compete in the European market," said Kevin Kelly, senior vice president for external affairs, Qualcomm. "Now the EU is on the verge of passing legislation that would perpetuate its exclusionary policy by barring competition from alternative US technologies for the next generation of wireless communications. "Even more troubling is the EU's active consideration of legislation to mandate the standard for the entire community, in contravention of its obligations under the Technical Barriers to Trade (TBT). The European Council of Ministers and the European Parliament are considering an EU-drafted Decision that would effectively convert the W-CDMA standard into a mandatory technical regulation. Wireless systems not in compliance with the standard would not be licensed. This would lock products based on US technology out of the market as a matter of EU law." In an open letter to chairman Philip Crane, following the US House Hearing on trade relations with Europe, ETSI director general Karl Heinz Rosenbrock stated that ETSI's working methods adhere to the Code of Good Practice established under the World Trade Organisation agreement on TBT (which even the WTO recognise as being somewhat ambiguous). Concerning the definition of the UTRA proposal, Rosenbrock maintains that: "all these decisions were supported by Qualcomm Europe, which is an ETSI member." He continues: "during the ETSI General Assembly held in March 1998, Qualcomm Inc applied to become an associate member. This new membership was accepted by ETSI but Qualcomm withdrew on April 15." LaForge expressed concern that: "the European market will remain closed, as was the case with the GSM second-generation standard, while other regions pursue a more open-market approach. We hope that the European and ITU processes are open and equitable and that all regional standards bodies will be willing to work toward a harmonized standard." "The question is, to what extent do US manufacturers have the right to compete on a fair and reasonable basis in the European market?", asks Bold, refering to pending legislation in Brussels which could mandate Member States to adopt to ETSI UMTS proposal. "One could conclude that this legislation could prove a barrier to trade." Know your rights So we've had technical compatibility issues, potential restrictive trade practices, and now comes the big one: intellectual property rights (IPRs). As with all technical development, new processes and innovations are created, and the developers' rights to these breakthroughs are protected under international patent law. IPR basically means a patented (or patent pending) idea. In order to use this IPR, a company must obtain a license from the originator and pay a mutually negotiated fee for its use. However, there are occasions when certain IPRs are not licensed and used only in a manufacturer's own product, in order to allow for differentiation from that of a competitor. The majority of manufacturers use patents as a defense vehicle to ensure a level playing field, especially true for IPRs incorporated into standards. The objective is to achieve cross license agreements between the vendors for either no fees or nominal ones. ETSI's IPR policy states that when an 'essential ' IPR (basically defined as a unique technical procedure) is brought to its attention, ETSI requests that its owner gives a written undertaking to grant 'irrevocable licences on fair, reasonable and non-discriminatory terms', and that this be made subject to fair reciprocation. ETSI has acknowledged that Qualcomm holds CDMA IPRs, and requested clarification from Qualcomm. On August 6, Qualcomm notified ETSI that it "is not prepared to grant licenses for the proposed W-CDMA standard in accordance with the terms of Clause 6.1 of the ETSI interim IPR policy". ETSI then stated that the development of the third generation standards within ETSI will thus progress according to this decision and its Rules of Procedure. In its reply, Qualcomm stated that it would license its CDMA IPRs on fair, reasonable and nondiscriminatory terms only for standards meeting a set of technical criteria based on three fairness principles, as follows:
In his US House hearing, Kelly revealled that: "Before any W-CDMA system can be manufactured and commercially deployed, Qualcomm must agree to license its IPRs." The three major areas in which Qualcomm holds IPRs are: closed loop power control, soft hand over, and the rake receiver (for interference reduction). "These aren't fringe areas," Bold told CI. "We believe you can't work around them." Not so, according to Nokia's Bergqvist. He cites the example of GSM, where there are still some unresolved patent issues, and, although there are numerous patents for IS-95, he maintains that "there are no granted patents in W-CDMA, or for that matter in any 3G system, not even any patents pending". "There will be a number of IPR claims from a number of sources," he added. "The international community will have to handle them. For us though, it's business as usual. No single company would have enough patents to hold the others hostage." "Qualcomm has spent hundreds of millions of dollars on R&D," said Foerster. "As a result, we have the lion's share of the patents. At what point do you infringe on an IPR? If you have any systems, either trial or operational, that's when." The US company has stated that it holds over 130 patents relating to CDMA, with some 400 patent applications pending around the world, and has licensed 55 companies to manufacture equipment. Qualcomm derives a significant amount of its CDMA revenues and market share from its IPRs - one of its three business units is devoted solely to licencing and royalties. Its IPRs are generally paid for by license fees connected to the value of the sale and the supply of chip sets. The license fees involved in IS-95 are generally believed to amount to several $10s per handset and a percentage of the infrastructure price. For GSM and TDMA IS-136, the level of royalties is believed to be far lower. However, Qualcomm has just stated that it "intends to review its royalty rates within the context of the market size that will be achieved by a single converged standard." Ericsson is still engaged in legal action with Qualcomm on the payment of IS-95 license fees, so its subborn intransigence on the 3G chip rate issue could be seen as an attempt to avoid dependence as much as possible on Qualcomm licenses. "We think the courts are a pretty poor place to determine standards," Bold told CI. "We haven't a list of grievances, we haven't gone to Geneva with a complaint. We are encouraging dialogue. Winding up in Geneva is in no-one's interest. However, failing an accommodation, then we will protect our rights." As an interesting aside, ETSI's Rosenbrock included the following passage in his letter to House committe chairman Crane, taken from a paper on 'Standards for personal communications in Europe and the US', by David Goodman, Harvard University, April 1998: "With respect to proprietary status, AMPS, NA-TDMA, GSM and IS-41 are essentially in the public domain. In the case of CDMA, Qualcomm holds strong intellectual property rights, which it asserts through licensing agreements with an array of equipment vendors. (The growing number of telecommunications standards) covered in part by IPRs has played a major role in the transformation of standards organizations from forums of experts seeking consensus on technical issues into battlegrounds for the assertion of competing commercial interests". Which way now? "This is really about competition in the US between different technologies," said Ericsson's Mats Nilsson. "It's Wall Street. It's money." Ericsson's president and CEO, Sven-Christer Nilsson, has stated publically that he hopes his company can reach an amicable solution for both the standards and the IPR issue. But would it pay well over $10 royalties for each handset sold, and an infrastructure royalty which could amount to between 5 and 10% of gross revenues? Do the maths. This amounts to a phenomenal amount of money. This followed an earlier message to New York analysts that: "competition should not be stopped by someone not willing to make patents available on fair and equal terms. We cannot accept unreasonable and unequal terms and we will fight them. They have no place in the new telecoms world." However, a recent Ericsson press release stated that: "despite thorough investigation, Ericsson has found no reason to believe that ETSI's present W-CDMA standard would infringe upon any valid IPR's (sic) claimed by Qualcomm." Of course, this could merely be a further act of politicking, or it could be an indication that Ericsson is prepared to ignore Qualcomm's assertions. By contrast, the rest of the mobile industry has been keeping remarkably quiet, but behind closed doors resentment is brewing. There is a feeling that this stalemate is harmful to the industry. The debate is holding up the progress of standards and may further extend costs into the CDMA industry. Their is an unspoken belief by the rest of the industry that no one company should be allowed the right to dictate the evolution of a global standard. Although they won't publically admit it, many in the US and non-US wireless industry would love to get out from under Qualcomm's IPRs, and they see 3G as a way of doing this. Qualcomm can see this, and is therefore doing everything it can to prevent this from occuring. "Combining 3G technologies is about limiting the capability of a new technology," said Gary Jones, chairman of the GSM North America's standards working group. "It is designed to protect the second generation IPRs of some manufacturers, and it's about choosing the interests of manufacturers over those of consumers. The difference in philosophy is whether to revolutionise wireless radio or preserve 2G artifacts." Qualcomm may well succeed in persuading the US government to fight its case, but will the European Community yield to Uncle Sam's huffing and puffing? Or will certain parties, as in the well-known fairy tale, come to a firey end? It seems that the only certainty is that this story will run and run. Expect more posturing and gesticulating before the year ends. |
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the higher data rate (max. 2Mbps indoor, 150
kbps for moving terminals), allowing xxmultimedia applications;
line of products.
