MOSCOW-CDMA technology has been battling for a spot in Russia’s mobile market for two years, but it lost the war as Communications Minister Leonid Reiman, an opponent of the technology, retained his post in the new government formed after President Vladimir Putin took office in May.
“We shall not further develop that standard. CDMA development on the Russian territory is inappropriate, as it creates additional difficulties for the deployment of other communication systems,” Reiman said.
The minister insisted the conflict over CDMA was purely technical.
However, competitive issues could not be ignored, as CDMA carriers offered services at cheap fixed telephone prices, thus infuriating their mobile competitors.
The conflict began in May 1998, when Russian information security experts noted that CDMA IS-95 uses receivers from the U.S. government’s global positioning system satellite system. The Russian experts recommended to the Communications Ministry to do without the GPS receivers, which provide synchronization for mobile communications.
In June 1998, the Communications Ministry ruled it “appropriate to use the IS-95 standard in the 800 MHz band only for wireless access to local telephone stations.” CDMA technology was thus restricted to newly built residential areas, where fixed telephone capacities are usually limited in Russia.
CDMA carriers, however, easily bypassed restrictions. They offered limited mobility at fixed telephone prices. In reality, however, the portable phone was fully mobile as it operated in the entire service area, instead of a limited segment. The ministry had little recourse, as carriers were not directly violating Communications Ministry instructions, although subscribers were technically breaching mobility restrictions by using phones within the entire coverage area.
In April 1999, the Communications Ministry fired a new salvo and banned the import of CDMA phones. The CDMA Association, made up of Russian CDMA carriers, appealed to the anti-monopoly ministry for protection, saying the Communications Ministry was “forcing CDMA clients to remain in a fixed state in order to keep the balance on the domestic wireless market for the pleasure of already-operating carriers.”
In the meantime, CDMA carriers, such as SONET in Moscow, began using other companies to import, certify and sell phones to SONET. The only problem for subscribers was the absence of authorization to use the phone, which could trigger problems with police. However, that threat disappeared earlier this year, when the Russian government ruled that authorizations from the Communications Ministry to carry a mobile phone were no longer necessary.
Despite the restrictions, a second CDMA carrier appeared in St. Petersburg. Radiotelecommunications company (RTK) joined FORA Communications, which had been operating a CDMA network in the second-biggest Russian city since 1996. Infuriated Association-800, which unites GSM, D-AMPS and NMT carriers, called “to suspend CDMA licenses in Russia.”
Initially, the anti-monopoly ministry backed CDMA complaints. It ruled that the Communications Ministry restricted competition and urged the Communication Ministry to lift all limitations on CDMA systems. In November 1999, the Communications Ministry had to cancel its anti-CDMA order, causing protests from the NMT 450 Association, representing Russian NMT carriers, which said the decision “poses a real threat to the interests of NMT-450, as well as GSM and D-AMPS carriers.”
The Communications Ministry then appealed to an arbitration court. Minister Reiman said the CDMA conflict was a “technical, not anti-monopoly issue.” He added: “A wide CDMA development in Russia may inhibit the standards, which the national telecommunications industry is targeted at, and can also considerably restrict the development of cellular TV.”
After a series of negotiations, the anti-monopoly ministry changed its mind and Minister Ilya Yuzhanov said he “supported the technical policy of the Communications Ministry to restrict the activities of CDMA carriers on the wireless market.” Yuzhanov recalled that Russia belongs to the first European zone designated by the International Telecommunication Union “where the CDMA standard is not envisaged.”
As a result, the case was revoked from arbitration.
“To protect investment companies, which are already operating with that [CDMA] standard, it was decided that the already-licensed companies would continue to work, if they really work,” Reiman promised.
Wireless market experts predict that CDMA operations will finally end by 2010 in Russia, when the 800 MHz band is to be occupied by a television technology.
“We believe the issue of CDMA mobility has been finally closed,” said Anton Pogrebinsky from the J’son & Partners telecom consultancy office in Moscow.
The head of the Finnish Sonic Duo company, which in May received the status of the third GSM operator in Moscow, agreed that CDMA is doomed in Russia. “The future is with GSM. D-AMPS and NMT-450 carriers did the job of pioneers on the wireless market of the country. The U.S. CDMA standard will be gradually pushed out from the market,” Martti Hutonen, Sonic Duo director general, predicted.
There were 33,000 CDMA subscribers in Russia at the end of 1999. Carriers of other technologies began to radically decrease prices early this year and now boast close to 1 million subscribers in Moscow alone.
