Introduction

A Brief History of Wireless Telecommunications Standards

The pre-cellular era (1946 to 1968) experienced the first rapid growth which would be characteristic of the wireless market. In 1946, the first mobile communications service was deployed by AT&T in St. Louis. A single powerful transmitter radiated frequency modulated (FM) waves in a coverage area of up to 50 miles. In 1949, the FCC officially recognized mobile radio as a new class of service and as demand grew, it soon became evident that the handful of channels that the systems provided would not be enough. In 1950, the FCC split the 120kHz channel into two equal 60 kHz channels to double capacity. Initially FM receiver technology was unable to utilize this increased capacity, but by 1960 advances enabled the spectrum efficiency of these systems to increase four fold. The result was a growth from 86,000 users in 1948, to approximately 650,000 users by 1958, and 1.4 million users by 1962.

The cellular era took root with the fertilization of concepts that appeared in system proposals from Bell Labs. In these proposals the broadcast model, where one or a synchronized few high-powered transmitters cover the area of interest, was replaced by a distribute models, where the coverage area is partitioned into multiple cells each serviced by its own lower power transmitter. In 1971, Bell Labs submitted a proposal to the FCC for a new analog cellular FM telecommunications system. What evolved from this proposal was the Advanced Mobile Phone Service (AMPS) cellular standard.

First Generation

In conjunction to the development of AMPS, cellular radio systems were simultaneously being developed in Europe and Japan. These systems have since been identified as the first generation of wireless telecommunications. They used FM for speech and frequency division multiplexing (FDMA) as the access technique (each user used a fraction of the available frequency bandwidth to receive and transmit). All first generation systems had many common features in their technology standards, however each were incubated and developed as encouraged by the individual environmental and circumstantial elements of their home markets. Particularly, frequency band selections was uncoordinated and were independently chosen by spectrum availability in each country.

America

AMPS

In 1983, Ameritech deployed the first AMPS cellular telephone system in the United States. The development of the U.S. analog system was a revolutionary achievement in mobile communications (in the sense that no prior like systems existed) and was mandated by the FCC as the American standard. To control the emergence of monopolies, the FCC decreed that each municipal market have a minimum of two cellular service providers. This direct government interaction in deploying the AMPS standard created a nationwide compatible cellular network and established a fertile ground upon which the technology flourished. By establishing a government backed single standard, critical mass quickly formed and positive feedback fueled network growth. The success was significant and by 1993 more than half of the world's wireless cellular systems utilized this technology. Even at present, it remains the leader as ranked by total coverage area in the United States amidst superior second generation standards.

Europe

Nordic Mobile Telephone 450 (NMT-450)

Ericsson and Nokia developed the first wireless telecommunication standard in Europe known as Nordic Mobile Telephone 450 (NMT-450). The development of NMT-450 began in 1969 and was completed in 1978. The service standard was first implemented in Sweden in 1981, and was rolled out to the other Scandinavian countries by 1982. The NMT standard had open interfaces and included the idea of digital switching for radio phone services. NMT-450 introduced several concepts now found in almost all wireless communications including light weight portable phones and roaming. These features were so successful that NMT platforms were adopted in several other European countries, creating a continuing commercial demand for base stations and switching systems which Ericsson and Nokia capitalized upon.

TACS

TACS (Total Access Communication System) was a competing analog technology that was originally established in Italy and the United Kingdom. Today, companies such as Vodafone and Cellnet continue to provide TACS service on their traditional analog mobile phone systems. In fact, a great many mobile phones in the United Kingdom still operate on TACS, and many people prefer the clear, smooth sound of a TACS phone to the harsher sound of a digital phone.

Japan

NTT & NTT Hi-Cap

Mobile service in Japan began with the introduction of the NTT analog cellular system in Tokyo in 1979 by Nippon Telegraph & Telephone Public Corp. (NTT)[18]  Because NTT was owned by the Government of Japan, bureaucratic meddling and NTT’s monopoly powers made the NTT cellular system very costly[19], and thus it did not attract many customers. In December of 1988, the Ministry of Posts & Telecommunications (MPT) allowed rival carriers into the mobile phone market[19], which brought costs down and increased the growth in subscriptions. Also in this year, the NTT system capacity was quadrupled through channel spacing reduction[18]. Dual mode phones that could operate on either the high capacity or low capacity NTT systems reduced switching costs (all handsets were leased from NTT). Rival carrier IDO (owned by Toyota Motors) used the high capacity NTT system.

JTACS/NTACS

A second rival to NTT, DDI’s Cellular Group, introduced the JTACS/NTACS (Japanese Total Access Communication System/Narrowband Total Access Communication System) system, based on the European TACS system. IDO later followed with its own JTACS/NTACS system, and an alliance with DDI was formed to facilitate nationwide roaming. The first JTACS system was placed into commercial service in June 1991[20] with equipment from Motorola’s Cellular Infrastructure Group(CIG). Presumably, DDI and IDO utilized JTACS instead of NTT to distance themselves from the extra government regulation and bureaucracy that could be involved in following a standard set by a government-owned corporation. NTT itself spun off NTT Mobile Communications Network, Inc. (NTT DoCoMo) as a private company in 1992 to remove its cellular business from the excessive regulation of a government-owned company. Furthermore, since DDI and IDO competed directly with NTT in each market, having a different standard would provide an amount of lock-in.

Second Generation

America

The cellular concept promised virtually unlimited capacity through cell splitting and distributed networks but practical limitations established boundaries in application. It became increasingly difficult and expensive to establish real-estate arrangements that strategically placed base stations, as cells became progressively smaller. The subscriber capacity of the first generation technologies was heading towards saturation caused by growth fueled by both supply and demand economies of scale. Second generation systems offered better voice quality and more efficient spectrum utilization. This was the motivation behind the development of second generation systems. These new systems utilized TDMA (users utilize bandwidth by transmitting and received at particular timeslots) instead of FDMA, and digital modulation techniques, which made them incompatible with first generation systems. However, digital systems were designed to use the same frequency range and signaling as its analog predecessor, which meant that a dual-mode second generation system could be designed that was backward compatible. Second generation systems could utilize the first generation, as in receiving and placing calls, but first generations system could not place calls on the digital network. To ease the transition, second generation systems often allocated ten percent of its network to analog traffic.

Unlike analog radio, several second generation standards emerged to compete in the U.S market. The FCC welcomed this idea because it felt that the best way to foster competition and superior technology was to let the market decide who the dominant player would be. This was a reversal of its former stance with AMPS. The United States adopted the philosophy that a free market approach would extend the window of time in which a dominant standard would be identified, but that the innovative and competitive nature of the free market would ultimately encourage a more optimal outcome.

IS-54

Interim Standard-54 was developed late in 1991 and was designed to support large cities that had reached saturation within the analog system. One of the key motivations for the development of this standard was to make a smooth transition from analog to digital in the same radio band. IS-54 uses TDMA to increase capacity in the AMPS spectrum allocation. Due to of lock-in from switching costs, the change over rate was proportional to the subscriber equipment transition in the market.

IS-95

Interim Standard–95 (IS-95) was introduced in 1994 using a new access technique, Code Division Multiplexing Access (CDMA) pioneered by Qualcomm. IS-95 also presented itself as the next generation digital standard. It too, operates in a dual mode (CDMA/AMPS) in the same spectrum allocation as AMPS. IS-95 claims to be technically superior to its rivals, by offering greater noise immunity and channel capacity. It is also incompatible with TDMA based systems thus creating a distinct market rival in setting the dominant standard.

Europe

GSM

The Global System for Mobile Communication (GSM) is a pan-European, open digital standard accepted by the European Telecommunications Standards Institute (ETSI) in 1989. The development of GSM actually began in 1981 as an effort to solve segmentation problems of compatibility in Europe. GSM was developed as an open standard that would allow interoperability of mobile phones in all European countries. GSM is considered to be the digital equivalent to TACS. It uses digitally encoded signals, which are not prone to eavesdropping, as are traditional analog signals. The GSM standard has greater capacity/voice quality than the previous analog standard, and it is more economical to manufacture a digital phone than an analog phone. Because GSM is an open standard, manufacturers of GSM-compatible phones do not pay intellectual property license fees. As a result of the open nature of the standard and its concomitant wide spread adoption, companies such as Vodafone and Cellnet have heavily invested in GSM infrastructure that is now as well developed as the original analog networks.

Japan

PDC

In 1989 the MPT began a development study for a digital cellular system with a common air interface[18]. From this study, the Personal Digital Communications (PDC) system was established in 1991, using TDMA technology similar to IS-54 in both the 800 MHz and 1.5 GHz bands. Motorola’s CIG was again the first to deploy PDC equipment in 1994. Besides NTT DoCoMo, the PDC operators are IDO, Japan Telecom’s (JT) Digital Phone Group, and Nissan Motor’s Tu-Ka Group.

In April 1994 the MPT allowed consumers to buy their handsets rather than rent them from carriers[19], which substantially dropped costs to the consumer and caused cellular sales to skyrocket. Between 1994 and 1996, cellular subscriptions grew from 2.2 million to 15 million, and cellular costs dropped nearly to U.S. levels. According to Robert Orr, Jr., director of government relations at Nippon Motorola, "Deregulation of the Japanese cellular phone market since 1994 is what created the boom."[19] Furthermore, as the cell phone is a fashion item in Japan, the increased competition, including foreign manufacturers, and the subsequent versioning of phones, would have increased the appeal of the devices to more consumers. For the analog operators with multiple standards, private ownership of phones would have provided an extra degree of lock-in to a particular system, whereas leased phones provided no allegiance once the contract had ended. PDC itself gained popularity due to high quality, high security, a longer handset battery life, and the other benefits common to digital cellular systems; by 1996 67% of cellular phones were digital[19].

PHS

The MPT began a study for next generation portable telephone systems in Japan in January 1989. The objectives were to provide home and office use (cordless phone operation) in addition to public access capability (similar to cellular phones). The Research & Development Center for Radio Systems (RCR) determined the air interface protocol for the system, TDMA, while the network interface was determined by the Telecommunications Technical Committee (TTC)[18]. The result was the Personal Handyphone System (PHS, formerly PHP), that debuted in July 1995. PHS utilizes a dense network of antennas each with a range of 100-200m, which allows lower power, cheaper handsets to be used. Because of the small cell size, the user’s speed must be kept below 20-km/hr or handoffs will occur too frequently. The base stations are much cheaper than cellular base stations and the network is easier to construct, which allows reduced rates to be charged. Another advantage over cellular phones is that it allows 32-kbit/s digital data transmission (soon to be extended to 64-kbit/s). Such a system probably would not be successful in the U.S. because even our cities are spread out, resulting in a huge number of base stations, and we are more mobile, so the pedestrian speed limit would be prohibitive. However, in Japan PHS has been very popular; DDI received 120,000 inquires prior to the introduction of PHS, but was only able to sign up 53,000 of them due to the limited availability of handsets. There are currently three PHS carriers: NTT Personal Group, DDI Pocket Group, and Astel Group. PHS peaked at 7 million users in October, 1997[21], but subscriptions have since dropped due to the decreasing costs of full cellular service. PHS carriers are subsequently exploring new services to maintain the PHS network through evolutionary changes, including location service, which is accurate to within 100m due to the small cell size, and telemetering, which would include telling a vending machine company how much stock needs to be hauled up a building to refill a particular vending machine. DoCoMo envisions PHS as a low-cost communications terminal that could be attached to autos, bicycles, motorcycles, and even household pets. PHS would be used to provide circuit and packet switched Internet access for portable PCs and PDAs[22].

IS-95

Due to the popularity of mobile phones since deregulation in 1994, Japan is running out of room in the existing mobile phone spectrum. To alleviate this bandwidth shortage, the MPT endorsed a transition from PDC to narrowband CDMA (IS-95) in 1997[23]. DDI and IDO will provide IS-95 service, and have given Motorola a $3 billion contract for 1,500 CDMA base stations to upgrade existing analog base stations by 1999[24]. The new CDMA systems will provide service in the existing JTACS bands.

Other Asian Countries

Other Asian countries have been late adopting mobile telephony, but they are quickly catching up to the major markets: South Korea forecasts 7 million new subscribers in 1999, for a total of 20 million[25], and International Data Corp. (IDC) projects 10 million cellular phone users by 2006 in India[26]. Many developing countries do not have extensive wired telephony infrastructures, so mobile telephone networks provide a quick and relatively inexpensive way to set up a national telephone infrastructure. They realize that telecommunications capabilities have a direct effect on a nation’s economy, and nations with a higher number of telephone lines have a higher gross domestic market[27]. Because of their late entry into the market, these countries are able to jump right into second-generation systems.

Instead of embracing standards from the region’s market leader Japan, most Asian countries are using the European and American standards of GSM and CDMA. 60% of new mobile networks in Asia were GSM in 1997[28]. In South Korea, CDMA has been widely adopted since the Ministry of Communications accepted it as a standard in 1993[29], but GSM is also used[25]. In addition, South Korean cellular equipment firms are targeting CDMA equipment because of the European market dominance in GSM[30]. Despite the U.S. being the largest foreign investor and the largest trading partner with India, that country uses GSM[26]. Meanwhile, Motorola has CDMA contracts in Hong Kong, the Philippines, Thailand, and China. The only Japanese standard being used elsewhere in Asia is PHS: Hong Kong adopted it in 1994, NTT, Fujitsu, Dai Ni Den Den DDI, and NEC began tests in China in the spring of 1995[31], and the Telephone Organization of Thailand authorized Tai Telephone and Telecommunications (TT&T) and TelecomAsia to introduce PHS[32]. Possible factors affecting a country’s standards choice include: desiring political and economic separation from Japan; influence of foreign manufacturers such as Motorola, Qualcomm, Ericsson, and Nokia; post-colonial or post-World War II ties to Europeans empires or America; and potential market opportunities for producers in the European or American markets. However, Japan does want to expand its share of the growing Asian market, and China’s potential market is one of the driving factors in their third generation development[33].

Third Generation – The Next Global Standard

UMTS

In January 1998, ETSI submitted their 3G standard proposal to the ITU. ETSI endorsed a combined wide-band CDMA/time division CDMA (W-CDMA/TD-CDMA) standard. Their proposal is referred to as the Universal Mobile Telecommunication System (UMTS), and can be thought of as a "family of standards." In the paired two-way spectrum, W-CDMA would be used to provide wide area cellular coverage and high-mobility services. In the one-way unpaired spectrum, TD-CDMA would be used to provide low-mobility, local, and in-building types of service. Ericsson and Nokia developed the W-CDMA standard and are its main proponents, while Alcatel, Siemens, and Nortel are the main supporters of TD-CDMA. The two groups agreed that they would not be able to come to a consensus without compromise, and have formed an alliance proposing their joint recommendation via ETSI to the ITU. Although these five firms were the main proponents of the two different technologies, the consensus decision was based on a proposal submitted by a larger group of manufacturers including Bosch, Italtel, Motorola and Sony.

In addition to ETSI, other trade groups also support a W-CDMA standard including NTT DoCoMo, which controls over half of the Japanese wireless telecommunications market. The Association of Radio Industries and Businesses (ARIB) plans to submit a proposal on behalf of NTT DoCoMo, the Telecommunications Technology Association (TTA) of Korea, and the North American GSM Interest Group (GSM NAIG). The Japanese, Korean and American telecommunication equipment manufacturers who belong to these trade organizations want to compete in the global marketplace for the new 3^rd generation wireless devices without having to pay license fees to Qualcomm who has patents covering technology incorporated in the competing CDMA-2000 standard. UMTS handsets and the UMTS standard itself reportedly do not violate any of Qualcomm’s patents surrounding CDMA technology. This factor is crucial to ensure the wide spread adoption of UMTS as the third generation standard. If Qualcomm is able to control the production of handsets through prohibitive licensing of third party manufacturers, they could greatly retard the adoption of UMTS as the 3G standard.

CDMA-2000

Qualcomm leads the CDMA Development Group (CDG), which is composed of PrimeCo, Sprint PCS, and most other PCS providers. CDG has proposed that CDMA-2000 be the 3G standard. This technology is backward compatible with AMPS and CDMA networks. However, Qualcomm has stated that they believe it is essential that the chosen 3G technology be equally compatible with GSM networks as well. They would like to work with Ericsson and Nokia to integrate CDMA-2000 and W-CDMA into a single solution acceptable to all manufacturers and carriers. Towards this end, Qualcomm has proposed an enhanced "family of systems" to preserve the investments already made in existing wireless infrastructure, allowing all current operators to continue to use their core network technologies. Qualcomm believes that a common air interface will enable carriers to achieve 3G’s objectives.

While Qualcomm is the most outspoken proponent of CDMA-2000, manufacturers such as Motorola, Lucent, and Nortel have also invested a great deal in the development of CDMA-2000. However, in the end, these companies are willing to support any 3G standard, and do not want to take a strong public position that could jeopardize their existing and future business relationships in Europe and emerging markets. For instance, Motorola and Nortel openly support ETSI’s recommendation to the ITU to accept UMTS as the 3G standard.

Despite the FCC’s free market philosophy, the US government has become increasingly interested in the European standards setting process. Many officials in Washington are growing worried that American mobile phone technology will be locked out of the European Union in the next century.

Standards Setting Dynamics in a Free Market Context

The dynamics of standards listed above assume that the defined standard is open and not subject to proprietary control. European manufacturers assert that one reason for GSM's phenomenal success is that licensing fees have never been charged. In other words, it is a truly open standard. This has allowed multiple manufacturers to enter the market (Nortel, Motorola, Nokia, Ericsson, and Siemens) creating intense competition and driving equipment prices down. In contrast, Qualcomm receives license fees on each CDMA handset and base station that is sold. They effectively control the market for CDMA technology through their licensing arrangements with partners.

The European experience with GSM and the experience of the US with AMPS support the premise that a single, open standard creates a larger market due to the increased value that consumers receive. In fact, the consumer adoption rate of a new technology is a function of their (1) switching costs, (2) fear of stranding, and (3) network externalities. First, open standards serve to increase the value a consumer receives by eliminating the possibility of becoming stranded with obsolete technology and no migration path. Second, open standards reduce the threat of lock in because there will be multiple suppliers in the market facilitating a consumer’s transition from one provider to another. Finally, consumers benefit from the increased positive network externalities associated with larger markets. These factors, in addition to an increase in price-oriented competition among suppliers already mentioned, greatly increase the value a consumer derives from a new technology and hence the rate of consumer adoption.

For empirical data supporting these claims, we can look at the markets that adopted the open GSM standard. For example, in the Nordic countries ten cellular subscribers were being added for every fixed line installation in 1997, while in Japan, the share of the population with a mobile phone doubled from 11.5% to 23% in 1996 alone. In January of this year 1 in 4 British citizens owned a cellular phone. The latest surge in European sales was attributed to supermarket selling of "pre-payment" phones for less than $112 each. These phones are designed to appeal to those who are unsure if they really need a mobile phone. There is no contract and no line-rental fee. The user simply buys call vouchers from convenience stores and gas stations. Marketing efforts such as this to capture the marginal customers are signals that a technology is entering a mature state.

Overcoming an Established Standard

The EC mandated that European wireless carriers implement GSM as the second generation standard. This, in turn, encouraged Asian manufacturers and service providers to select GSM, which quickly created an enormous pool of GSM subscribers in over 70 countries worldwide. As a result, GSM is in effect a de facto global standard today. How then can Qualcomm hope to overcome this tremendous disadvantage in market share with CDMA-2000, unless it is backward compatible with GSM? The short answer is that they cannot. A more detailed answer explores the forces at play in overcoming established standards.

Once a company has established a standard with significant market share, they employ tactics that effectively lock their customers into their technology and its subsequent generations. Lock in effects primarily related to switching costs can affect both customers and their suppliers in the digital cellular market.
 

Carriers face high switching costs	Must replace capital equipment (e.g. base stations and MSCs). Need to re-train their employees. Must transfer existing information to the new system. Might need to break the existing contractual commitments.
Customers face switching costs	May have to replace the cellular telephone. Will forfeit their loyalty programs with the existing standard. Might have to break existing contractual commitments.  Incur a cost due to the "uncertainty" of using a different standard.

 

An example of the difficulty of overcoming the switching costs associated with an established technology can be seen in the early stages of the British market for GSM cellular service. In 1993 and 1994, two recently launched digital phone services had great difficulty overcoming consumer switching costs. Since the two digital networks in Britain, Mercury One2One and Hutchinson Telecom’s Orange, were established the two incumbent analog services of Cellnet and Vodafone were adding subscribers three times as fast as the new digital service providers, and the price of analog service was falling no faster than it had prior to the digital networks coming online in 1993.

The poor market penetration of the digital networks was attributed to their limited coverage. At that time digital networks only provided service in London and a few other large cities, while other analog networks covered 100% of the English population. In addition, the voice quality of analog was perceived as better because digital subscribers would often be cutoff if their signal weakened, while analog subscribers could carry on their conversations over a little static. Furthermore, analog service providers were selling their handsets for as little as $32 while digital handsets were selling for $160-$320 each.

Suppliers’ switching costs associated with transitioning from an existing technology to the next generation, inherently favor an evolution of standards with backward compatibility rather than a revolution. As a result, Qualcomm has adopted a controlled migration strategy which employs a controlled standard with backward compatibility, while ETSI and the ITU favor an open migration strategy which employs an open standard and with backward compatibility. On the other hand, Japan is so anxious to implement the 3G technologies that they are willing to make a revolutionary transition that does not provide backwards compatibility with their existing standards[34]. These switching costs provide some insight into the obstacles facing the CDMA-2000 proposal for 3G. Although UMTS is backward compatible with existing CDMA networks, Qualcomm claims that the UMTS proposal infringes on their intellectual property rights, and have taken preliminary steps to uphold their IP in court. If Qualcomm is successful in defending their intellectual property, they may find themselves in a sticky situation. If the UMTS proposal is found to infringe on Qualcomm’s IP, ETSI may very well decide to scrap plans to have a 3G technology that is backward compatible with CDMA, and instead only offer a migration path for GSM networks. After all, GSM enjoys a much greater global installed base than does CDMA. Then, if the 3G standard is not backward compatible with CDMA there will be enormous upgrade costs for current CDMA networks in the United States. In this case, Qualcomm would be frozen out of the global wireless telecomm market, and would have to aggressively defend its domestic market share from the new GSM-compatible 3G standard.

Tactics in a Standards War

Both OEMs and carriers employ tactics such as penetration pricing, preemption, and expectations management to manage and sustain lock-in to win a standards war.
 

Reduce switching costs	Offer substantial discounts to compensate for switching to a new technology. Develop training programs to facilitate the transition. For example, Qualcomm offers a series of customized courses and programs to help them to learn about CDMA products and technology.
Preemption	Form alliances with service providers form to support their technologies
Expectation management	Make technology claims to proactively manage the perception of the technology in the market Make market claims to proactively manage the perception in the market. For example, during the establishment of IS-95 in 2G, Qualcomm announced that over 55% of 34 million cellular users in the U.S. had committed to CDMA. Use advertising to manage market perception of the technology. For example, Qualcomm purchased the 20-year naming rights to San Diego's only professional sports stadium in an effort to develop a well-known brand identity.

 

Conclusion

Given the dominant global installed base of GSM subscribers, it is certain that the ITU will adopt at least a modified version of the UMTS proposal, which may, in the final analysis, be backward compatible with GSM rather than CDMA. As we have seen, this would have a severely negative impact on CDMA adoption by carriers around the world. Qualcomm is pursuing its endorsement for 3G through heavy lobbying efforts, legal action to uphold its intellectual property rights, and other tactics to manage the perceptions of the public and private markets in the favor of CDMA-2000. It seems that Qualcomm is fighting an uphill battle against an entrenched GSM standard and the accompanying open migration approach of UMTS. This situation was predetermined during the second generation of cellular technology by the FCC’s use of free market forces to select the most efficient cellular standard.

Modern economic theory postulates that in a perfectly competitive market, firms will produce the combination of goods and services most desired by consumers in the most efficient manner, and will offer these goods and services at competitive prices. Market efficiency is achieved through the natural self-interests of its participants. Profit-seeking companies produce goods and services at a level that optimizes their profits, and consumers purchase these goods and services to maximize their own utility. However, this argument does not consider the countering effects of switching costs and positive network externalities associated with established standards that limit the ability of the free market to select an optimal, technical standard. The downside to free market competition is that it takes a long time and a great deal of economic resources to identify a winning standard. And even then, it may not truly be the "best" standard.

Currently, there is no clear winner for a unified global market. CDMA-2000 and UMTS can coexist in separate markets (e.g. the United States and the rest of the world) for two reasons: first, investment in existing infrastructure has created sufficiently high switching costs; and second, each of these markets is large enough to support a separate standard individually. These separate systems can interconnect through the Public Telephone Network, so end users will really not care if there is more than one standard. Besides, multiple standards benefit suppliers because they do not have to enter price-oriented competition. Therefore, convergence to a single global standard is not an economic necessity.

Interestingly, just before this report was posted it was learned that Ericsson and Qualcomm had announced on March 25, 1999 that they have entered into a series of definitive agreements that resolve all disputes globally between the companies relating to the 3G CDMA standards. Under the agreements, Ericsson and Qualcomm agree to jointly support a single global CDMA family standard with three option modes of operation: 1) direct sequence FDD, 2) multi-carrier FDD, and 3) TDD. Each mode will support both GSM MAP and ANSI-41 networks. The agreement also provides for cross licensing of intellectual property rights for all CDMA technologies, including cdmaOneä , WCDMA, and cdma2000ä . Ericsson and Qualcomm are thus forming an alliance that will bring cdma2000 into the UMTS fold, similar to the allied standards already in UMTS. Under this standard, cellular operators will be able to choose which mode of operation to deploy based on marketplace needs such as backwards compatibility or product differentiation needs. Ericsson and Qualcomm are still in the expectations management stage, so it is yet to be seen if their 3G agreement becomes accepted by ITU, TIA, ETSI, and the other major players in the industry.
 

Glossary

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