Qualcomm Inc. has been looking for a European opening for its CDMA technology for some time. But so far, the technology has been effectively shut out in the region, other than a few CDMA fixed-wireless networks, mainly in Russia and other parts of Eastern Europe.
The delays and high costs associated with W-CDMA technology have given Qualcomm the potential opportunity it has been waiting for to try to break into the European market.
Qualcomm benefits no matter which 3G technology operators deploy. But the fact is the U.S.-based company has a lot more to gain through widespread adoption of cdma2000.
So it is pumping money-$200 million during three years-into a venture company called Inquam, which “was formed … with the primary intent of deploying CDMA-based technology.” And Inquam is focusing on Europe.
Inquam purchased the majority of the shares of Romanian operator Telemobil last year. The carrier plans to roll out a CDMA service at 450 MHz this year. If it succeeds, this will be the first mobile CDMA network in Europe. In addition, Inquam is reported to be in discussions with Dolphin Telecom about purchasing its U.K. 400 MHz spectrum. Dolphin, which is looking for a buyer, operates a TETRA network aimed at mainly business users.
So the Dolphin network could give Inquam cheap spectrum on which to roll out cdma2000 services. But what about the five U.K. operators that paid more than $32 billion total for their 3G spectrum? No doubt, lawsuits will be in the works before the ink is dry on any such Dolphin acquisition. Not to mention the regulatory and political issues that would ensue.
The U.K. Radiocommunications Agency is in the process of stopping any such deal in its tracks. But Qualcomm knows marketing. It has pretty much single-handedly pushed a virtually unknown, unused technology into the hands of numerous operators around the world. The number of CDMA subscribers worldwide (96 million) is certainly far less than the number of GSM users (590 million), but it is still a sizable chunk of the market.
At the least, Inquam could shake things up a bit among Europe’s tightly knit GSM community. One analyst said it might be just the “kick up the backside” European operators need to jump-start GPRS and 3G services.
It could make for a long, drawn out battle. But in the end, I do not see the U.K. government allowing 3G services on spectrum that was not part of its 3G auction. And once again, I see politics playing out in the industry rather than a focus on the consumer. And targeting consumer wants will make for 3G success in the end.
