The CDMA industry recently chose to standardize Qualcomm Inc.’s High Data Rate technology, but industry analysts wonder when carriers will see a big enough business case to deploy the data-only megabit-speed technology and what type of applications are in store for it in the United States.
U.S. Code Division Multiple Access carriers will deploy 1XRTT technology, a 3G standard that doubles voice capacity and adds packet data speeds of up to 144 kilobits per second, starting in mid-2001. Shortly after, they can choose to dedicate a 1.25-megahertz channel to data and bank on demand for the high-speed multimedia market.
The CDMA Development Group in recent weeks announced support for HDR technology, renaming it 1X EV (Evolution), and making some technical changes to it, including hand-off capability to 1X technology. The CDG has submitted the proposal to the Third Generation Partnership Project 2, a standards body established by the Telecommunications Industry Association to work on 3G technology. The CDMA community hopes to have the standard written and published by October.
“We’re spending a lot of time and energy on 1X, and we really want the next high-speed technology to build on what we’ve done on 1X,” said Oliver Valente, Sprint PCS vice president of technology and advanced systems. “We’ve ended up with the 1X EV standard, modifying HDR as its base.”
Although the specification isn’t finished, Sprint PCS will be testing 1X EV technology with select customers next year on Lucent Technologies Inc.’s Flexent network platform. KT Freetel late last year announced tests of the technology with Qualcomm. Verizon Wireless plans to test the service sometime in late 2001 or early 2002.
Deploying 1X technology is a logical choice for all CDMA operators, say analysts. It increases capacity and battery life without requiring carriers to make a big investment in the success of a data market that today in North America is in its infancy.
“People are looking forward to this because of improved data rates and traffic capacity,” said Jim Papadopoulos, vice president of new technology with Audiovox Communications Corp. “We are targeting to have handsets probably toward the third quarter of 2001 with some test versions available in the second quarter.”
Carriers in Asia experiencing saturation in the voice market are likely to deploy the technology much earlier to capture more revenues and users in the data world. SK Telecom, South Korea’s largest operator, and KT Freetel plan to launch 1X technology by the end of this year, even though commercial equipment isn’t available. But even a fast mover like SK Telecom won’t make any investment decisions on 1X EV until 2001 so it can understand how the market responds to high-speed services.
CDMA carriers today are attempting to whet the consumer’s appetite for data services through slower speed circuit-switched data offerings that provide text-based versions of the Internet. 1X technology should make that experience more robust.
“When you’re downloading heavy text information, certainly 1XRTT will make that faster for you,” said Andrea Linsky, spokeswoman for Verizon Wireless Inc. “For graphics or multimedia, no. That’s not what it’s going to deliver.”
Operators won’t offer many consumers the peak data rates of 144 kbps, they’ll likely load customers on the network, seeing an average of between 28.8 and 56 kbps. Premium customers may get and pay more for higher data speeds. The big change, however, will be customers’ ability to be continually connected to the Internet.
“Today, time sensitivity is more important than throughput,” said Phil Redman, senior analyst with Gartner Group, a firm that makes wireless purchase recommendations for large corporations. “High wireless speed will change the way people think about wireless data.”
In comes 1X EV, designed to offer full multimedia capabilities with peak data rates of 2.4 Megabits per second. Qualcomm Chairman and Chief Executive Officer Dr. Irwin Jacobs envisions customers carrying around handsets with a dumb screen that downloads graphics and other applications like music from the Internet.
“We’re now looking to a new generation and additionally look to the evolution of phones,” Jacobs said at the recent CDMA World Congress in Hong Kong. “We’ll see multimode, multiband, multinetwork phones.”
“Today we have text-based wireless Web, and in the future we’ll have color graphics on the phone, and not necessarily on the phone, but a palmtop device. It will be where we’re seeing the realization of PDAs,” said Valente.
Many analysts see 1X EV as providing more niche services, such as high-speed Internet access to homes, allowing CDMA operators to compete with cable modem and digital subscriber line providers. Qualcomm has touted the technology as a way to solve the digital divide in rural areas. Some likely initial applications for 1X EV will be PCMCIA cards that will allow travelers to go online wirelessly via their laptop computers. Consumers won’t be able to access real-time applications since voice and data are on separate channels. The system hands off to the 1X network when customers want to interrupt their data sessions and make a voice call.
“A data-only strategy is too costly because carriers are giving up voice capacity. Given the unproven demand for wireless multimedia services, I can see markets in emerging areas where HDR makes sense,” said David Kerr, director of wireless programs with Strategy Analytics. “Fundamentally, it will come down to very selective deployments in areas where carriers can use their network assets more efficiently to afford to roll out high-speed data.”
Dedicating a 1.25 megahertz channel solely to data services is unnerving to many industry experts since the demand for multimedia applications is unproven. Many carriers have been concerned about the same issue, which prompted Motorola Inc. and Nokia to propose a competing technology called 1extreme, a megabit data service that runs on an integrated voice and data channel. Consideration of the technology, however, has been put on hold as carriers opted for HDR in the first phase of the 1X EV standard since it was much further ahead in the development cycle. 1extreme had never been tested in a lab.
Verizon’s Linsky said a data-only strategy is no disadvantage.
“To get the most out of either technology you have to optimize 1X for peak performance on voice and optimize 1X EV for peak performance on data,” she said.
“In the first phase, we won’t see a major impact,” said Valente. “It’s an easier deployment since we don’t have to worry about mixing data with voice traffic.”
As the multimedia market becomes more mature, carriers are calling for a second phase of 1X EV, which will require realtime applications and support of simultaneous voice and data services, said Valente. The technology choice for this is unknown. Qualcomm and others could improve HDR technology, carriers could opt for the 1extreme solution, which promises speeds around 5 megabits, or other solutions that have been presented like LAS-CDMA technology.
Motorola and Nokia are pushing for demonstrations of 1extreme technology by December.
“When I talk to customers, they like it,” said Neil Campbell, director of CDMA product operations for Motorola’s Network Solutions Sector. “We really believe in the integrated services vision. The need for a real-time services offering is not far off into the future … If you think about bandwidth, people never have enough, and they don’t care if its wired or unwired.”
“A dedicated data channel is not what carriers want,” said Matt Hoffman, analyst with SoundView Financial Group in Stamford, Conn. “If Motorola can prove it works, we think it’s likely to gain customers in a timely fashion.”
At any rate, it’s unlikely many carriers will move to wideband CDMA systems, known as 3X cdma2000 technology. Many analysts call the prospect a pipe dream, since most existing CDMA carriers don’t have enoug
h spectrum to migrate that direction. Most vendors aren’t working on the technology, though Verizon President and CEO Dennis Strigl recently told a Donaldson, Lufkin and Jenrette Securities Corp. conference that his company plans to upgrade its network to 3X technology from 1X EV between 2003 and 2005.
Upcoming spectrum auctions may change the philosophy of many carriers as well, since many of the 1X EV principles could be applied to 3X systems, providing even higher data speeds and a fourth-generation scenario.
“We don’t really see a need if you can get the same kind of performance in the same spectrum,” Valente said of 3X technology. “We’ll be able to do what W-CDMA needs in 10 megahertz.”
