Wireless-Data Rollouts Eyed As Standards Battles Fade

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The mobile-wireless-telecommunications sector has resolved
key issues that blocked effective deployment of high-speed-data services, ensuring that
long-expected rollouts will hit in the second half of 2000.

Many cellular and personal-communications-services
companies -- including some that recently launched 14.4-kilobit-per-second service --
intend to begin delivering data over mobile-wireless networks at speeds of up to 144 kbps
in that time frame.

And their technical foundation will allow them to jump to
three times that speed or better via software upgrades in the ensuing years.

In addition, technical gains on the mobile side are making
possible fixed-wireless voice and data options at even higher speeds, giving providers an
opportunity to compete against wireline service providers in the high-speed-data and voice
markets.

"We're on target to move to the higher data rates
by the last quarter of next year or early in 2001," said Michael Robinson, vice
president and general manager for network services at Sprint PCS. "The main gating
issue is standards."

Much remains to be accomplished in the interest of defining
a set of third-generation (3G) mobile-wireless standards that minimize the
incompatibilities among the leading air-interface standards in use worldwide.

Those include CDMAOne (code-division multiple access, also
known as IS-95), GSM (Global System for Mobile Communications) and IS-136 (the TDMA, or
time-division multiple-access, mode used by AT&T Corp.'s AT&T Wireless and
others).

The main impediment was eliminated earlier this year with
the settlement of intellectual-property issues between GSM backers -- which favored a
CDMA-based system known as "W-CDMA" for 3G capabilities -- and those like Sprint
PCS that backed a version (CDMA2000) compatible with their current CDMAOne platform.

Now, the ability of each side to tap into the technical
foundation of the other allows them to create a universal standard that is closer to full
interoperability than was possible before.

"The systems won't be completely converged in the
sense that they are exactly identical. But they'll be close enough to support
interoperability among various iterations of these systems with multimode phones,"
said Mark Whitton, director of CDMA-access-product management at Nortel Networks.

Moreover, he added, CDMA2000 specifications have
stabilized, so vendors can develop prototypes for demonstrations and market tests while
they wait for final specifications.

Such demonstrations -- including ones recently staged by
Nortel and three other vendors for Chinese government officials -- are generating orders
for CDMAOne systems at an accelerating pace worldwide. This signals a demand-driven cost
curve that should make it cheaper for U.S. companies to upgrade to state-of-the-art
products.

"We're starting to see a lot more capacity in the
orders for build-outs now," Whitton said. He noted that a nationwide Chinese PCS
network based on the CDMAOne-to-CDMA2000 evolutionary strategy was all but nailed down in
the wake of the industry's hard-fought success in gaining a Chinese entrée for
IS-95.

This PCS data-migration strategy -- refined rapidly over
the past year at the urging of Sprint PCS and other operators -- involves a two-step
implementation of CDMA2000 technology. The first step is a change in frequency
channelization from 1.25 megahertz per carrier to 5 MHz per carrier, along with the
increase in the voice-channel data-carrying capacity to 144 kbps.

Once the so-called 1xRTT (Radio Telecommunications
Technology) circuit cards are inserted in CDMA gear now being deployed, the hardware will
be in place to support a software-only upgrade to 3xRTT capacity, which will operate at as
high as 2 megabits per second over fixed links.

For wireless operators, this means current needs can be met
using state-of-the-art base stations that can be upgraded to the 3G hardware platform with
a change-out of circuit cards.

For example, Sprint PCS -- which is now in the third phase
of its nationwide build-out plan -- is pushing these new base stations into previously
uncovered rural areas and into market cores where the need to handle a higher volume of
traffic is the driving factor, Robinson said.

"In some cases, we're leaving the old base
stations in and just adding the new ones. But in other instances, we'll take them out
and use them somewhere else," he added.

Now that the key intellectual-property issues are resolved,
the industry has an opportunity to make significant headway toward the goal of harmonizing
the CDMA platforms comprising the two versions of 3G, noted Wendy Fulk, vice president of
marketing and communications for CDMA systems at Ericsson Inc.

"We're taking the approach of looking at both
W-CDMA and CDMA2000 and trying to avoid doing two separate product designs," she
said.

Over the past couple of months, this process has revealed
many common areas and led to a tightening of the development schedule for Ericsson's
3G products, she added. "When you look at the types of services people are talking
about introducing in Japan and Europe -- video e-mail, for example -- you realize
we're not overstating the case for 3G," she said.

A number of PCS and cellular operators are now offering
14.4-kbps service in the United States and abroad, including AT&T Wireless, Bell
Atlantic Corp., AirTouch Communications Inc. and Sprint PCS.

While this is not the business-class service long seen as
the primary goal of mobile data, it supports personalized data communications like e-mail,
messaging and customized Internet access that tap into consumer demand for screen phones
and other handheld devices, noted Phil Redman, an analyst for Boston-based The Yankee
Group.

"Our own survey of market demand for new features
shows that messaging is the No. 1 category in demand for data services," Redman said.
If so, it's just as well, because anything requiring much more than e-mail data rates
doesn't work very well at 9.6 kbps -- which, as Redman noted, is the typical actual
user data rate for 14.4-kbps systems.

But the 144-kbps tier seen for the 1xRTT phase of CDMA2000
is more than enough for what will make mobile data a hot item, Redman asserted, adding,
"50 kbps to 128 kbps is definitely a good target and one that a lot of companies will
be able to hit as soon as next year."

In fact, given industry progress toward compatibility at
the 3G level, several migratory paths to 3G have opened up for the various air-interface
platforms, making it fairly painless for carriers to jump to interim data levels in the
50- to 144-kbps range.

No matter which step wireless operators take over the next
few months, they can be pretty sure that the next one will lead them to much higher data
rates within the 3G-standards framework.

Wireless operators in Asia and Europe have been more
aggressive in bringing data services to market. Now, the market response is pushing them
to higher speeds.

GSM operators in Europe -- with new frequency to work with
in getting 3G-level services off the ground -- are gearing up for a jump to 384-kbps data
rates as soon as the standards-based gear can get to market.

Nortel sees late 2001 as a reasonable time frame to expect
the fully loaded standardized version of W-CDMA to enter the market, Whitton said, adding,
"3x is less certain."

But 1x appears far more certain than 3x, as Nortel and its
competitors race to get product to market as quickly as possible. Added Whitton, "1x
is so powerful that people may stay with it a while."

Along with raising data capacity to 144 kbps per voice
channel, the 1xRTT technology nearly doubles the number of voice channels that can be
carried over a given bandwidth.

These and other advances are making a high-speed-data-ready
platform cost-effective by addressing immediate needs, providing wireless operators with
the framework for moving to much higher data speeds in 2002 and beyond as 3G software
supporting 384-kbps mobile and 2-mbps fixed access rates comes on the market.

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