IDG News Service,
Buenos Aires Bureau
BUENOS AIRES –
To the
uninitiated it sounds like a meaningless puzzle; an even those in the know are having
a hard time making their choices. Latin America is now one of the global
battlefields for the dominance of one of two standards for second generation
mobile phones, leading to the much anticipated 3G (third generation). The
eVolution 2001 conference held here last week devoted two panels to discussing
the future of GSM (Global System for Mobile Communication, an European
standard) and CDMA (Code Division Multiple Access, the American standard) as
paths for the delivery of 3G services.
There are four
main cellular companies in Argentina: Personal (a subsidiary of Telecom SA),
Unifón (owned by Telefónica de Argentina SA), CTI Móvil and Movicom (Compañía
de Radicomunicaciones Móviles SA). Up to now CDMA has been implemented by
Movicom and CTI Móvil. Personal and Unifón use TDMA (Time Division Multiple
Access), a precursor to GSM. This year, Personal announced that it will migrate
to the GSM standard as a way to 3G. Previously, the whole Latin American market
had been stirred by Brazil's decision to put the GSM frequency bands (1,800M
Hz) up for auction, the panelists said.
In fact, both
technologies are represented in most countries of the Americas, including the
United States, where GSM has been deployed by American Personal Communications,
a subsidiary of Sprint. According to the GSM MoU Association GSM has over 120
million users worldwide and is available in 120 countries. The question is
which standard will prevail.
The sole full
defender of the American CDMA standard at the conference was Guillermo Fornaresio,
Qualcomm's Director of Business Development for Latin America. According to
Fornaresio, CDMA allows a much smoother passage to future 3G services and
protects the current investments both of the operators and the users. He
explained that in order to deploy 3G services from current 2G technologies, the
carriers will be forced to completely duplicate their networks, as the two
standards are incompatible; and the users will also be forced to replace their
cell phones or "terminals", in technical parlance.
For most of
the panel members, having to duplicate their networks is not such a deterrent,
because the modifications necessary to upgrade CDMA 2G networks to full 3G
operation (CDMA 2000) will also be costly. And the need for replacing the
terminals is not such an important consideration, as users usually exchange
their handsets every 18 or 24 months for a newer model.
Besides, GSM
has 70 percent of the 2G world market, including the very important European
and Asian markets, said Amílcar Maffeo, Computing and Communication Networks
Division Marketing Director for Siemens Argentina SA. This guarantees a level
of portability and roaming that CDMA cannot match. "If you want to have
just one cell phone number and just one handset and use it everywhere in the
world, then you must have GSM", he said.
For Carlos
Zárate, a Motorola executive director for the Southern Cone, it is important to
remember that 3G "is not a frequency band, nor a technology, nor a
standard". It is rather a public data transmission service, with no
defined standard per se. This means that the standards are still to be adopted,
at least in Latin America and other parts of the world. He remarked that haste
would be bad for this business, and reminded the audience of the European experience
where the mobile companies invested billions of euros in 3G frequency bands
licenses and that very expense has now stalled development, as the companies
are strapped for cash. He recommended caution, and "learning from the
international experience and the mistakes made in other countries."
Qualcomm's
Fornaresio explained at a later interview that his company supports both 3G
standards: the European WCDMA or the American CDMA 2000. Both technologies
allow data transmission speeds of up to 2M bps (bits per second) and they are
technically similar, although incompatible. Qualcomm, he said, produces chips
for them both. However, he expressed his company preference for 2G CDMA as a
path for 3G services not only because of the easier transition path, but also
because CDMA 2000 uses the frequency spectrum much more efficiently. "The
third generation CDMA 2000 standard uses one-fourth as much spectrum for
similar services as the European WCDMA version", he said.
There are many
wireless operators in Latin America
that are tossing the coin over this tough choice. It will take at least a year
more until the landscape clears, the panelists said.
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