Subject: [NEXTEL-1] At Last, 3G Rollouts Show More Boom Than Bust

From: Marcelrf <[email-masked]>
Date: Wed, 18 Feb 2004 13:22:29 -0500

December 29, 2003
Wireless Data Market Snapshot Archive

At Last, 3G Rollouts Show More Boom Than Bust

If you believed all the hype, 3G should have taken hold years ago, when
licenses first were auctioned, but money and equipment availability have
gotten in the way along with a sprinkling of standards wrangling.
Products and services are rolling out slowly in most parts of the
wireless world, but next year promises a boom of sorts in regions that
have been lagging behind.
3G technology finally is alive and growing in North and South America,
according to figures released at the CDMA Americas Congress in Miami
last week. The CDMA Development Group (CDG), which hosted the
conference, said CDMA2000 now is present in 45 commercial networks on
this side of the world, serving more than 29 million subscribers.

CDMA is the dominant wireless data platform in South America and in the
Caribbean, with such carriers as Chile's Movilnet and Vesper in Brazil
using it for wireless broadband Internet access. Here in the States,
Sprint PCS [NYSE: PCS] is using CDMA2000 to offer its PCS Vision service
that included Picture Mail, games, ringtones, screen savers and Web
access. Verizon Wireless [NYSE: VZ] is using CDMA2000 for similar
offerings along with its BroadbandAccess option, a high-speed data
service based on CDMA2000 1x EV-DO.

According to the CDG, there are 72 CDMA2000 1X and 10 1xEV-DO commercial
networks across Asia, the Americas and Europe; 12 1X and 3 1xEV-DO
networks are scheduled to be deployed in 2004. More than 445 devices are
available on the market with color displays, cameras and GPS
capabilities.

"The next generation of CDMA architecture will be driven by
person-to-person communications," said Adam Gould, CTO of CDMA for Nokia
[NYSE: NOK] Mobile Phones. "We'll see an evolution of voice services
first, then higher-quality packet switching and then music. Data will go
from downloads to more person-to-person without a fixed, PC-like IP
address." He also believes 3G voice quality will improve to the point
where it will be indistinguishable from wireline service, and the
specter of easy wireless video isn't that far away.

Despite all the talk about improved data transmission over CDMA 3G
networks, there continues to be a concern as to whether antennas,
networks and protocol stacks will be ready to perform. A move to
CDMA2000 1xEV-DV could alleviate many of these concerns. By definition,
CDMA2000 1xEV-DV offers peak data rates of between 3 Mbps and 5 Mbps
along with a typical throughput rate of 1 Mbps in a 1.25 MHz frequency
channel, providing carriers the flexibility to balance voice and data
traffic by allocating bandwidth on demand dynamically. CDMA2000 1xEV-DV
also enables such services as streaming video by providing a real-time
packet data connection; it also provides full legacy support for
existing IS- 95 and CDMA2000 1x devices.

Gould says the success of 3G's future in North and South America depends
on how much of an investment a particular carrier wants to make. "If you
invest [in 1x or DO] today, you'll be ahead, but you'll have to invest
in DV later on," he says.
Verizon Wireless has chosen to deploy 1xEV-DO in Washington, D.C., and
in San Diego for what Bill Stone, the carrier's executive director of
technical development, calls the &wuot;lowest cash expense per sub --
$30." Right now, Verizon Wireless is concentrating on the enterprise
customer, but there are plans to add a consumer focus. Stone admits that
selling the enterprise takes longer "because their requirements are
non-standard and there is an extra degree of customization."
Because this 3G service is so new (launched Oct. 1), Stone could not
divulge the number of takers or any revenues. "We are tracking above
plan for both of these, and the trend is positive," he said. What
happens in its first two 1xEV-DO venues will determine where Verizon
Wireless takes the technology in 2004.

Even though this conference concentrated on the proliferation of 3G CDMA
services in North and South America and the Caribbean, others were
invited to tell their success stories. As always, frontrunner Japan had
representation, this time from Dr. Hideo Okinaka, vice president/general
manager of KDDI's strategic "au" business-development division. au runs
off a 1xEV-DO platform, and it offers such options as packet
communications service, high-speed data transmission (maximum 144 Kbps),
full-time connection for "always on line" subscriber convenience, and it
even is featuring a mobile wireless LAN. Dr. Okinaka attributes 21
percent of KDDI's wireless revenues to data.

And service can be cheap. Japanese au subscribers pay anywhere between
$3 per month and $450 per month (for Super Pack fixed data service). The
PacketOne Middle Pack service perhaps is the most attractive option,
costing about $24 per month. Dr. Okinaka says au also offers camera
phones, peer-to-peer movie communications and a flourishing GPS offering
that has garnered nearly 7 million users. To accommodate even more
advanced services, the au network is in the process of a three-year
changeover from Java to Qualcomm's [NasdaqNM: QCOM] BREW.

>> Adam Gould, [email-masked]; Bill Stone,
[email-masked];
Hideo Okinaka, 011 81 33347 5711<<

www.telecomweb.com

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