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To: tero kuittinen who wrote (36)11/14/2000 3:13:25 PM
From: Valueman   of 8779
 
Come now Tero, surely you jest. Did you miss the part when SKT's head man says they are choosing W-CDMA because half their stock is owned by companies that would sell it if they chose otherwise? Extortion is a lethal weapon. I wouldn't put much stock in Korea's goings-on. They are all 1X, right now. They will appease the extortionists in other parts of the world with soothing W-CDMA tripe even if they have no plans for deploying it for 4 years.

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To: tero kuittinen who wrote (36)11/14/2000 3:24:47 PM
From: bananawind   of 8779
 
Hey Hey, Tero
Good to see you are still in nordic fantasy zone. Riddle us this. Worldwide cdma phone sales should total about $18 billion next year. If it could make a decent cdma phone NOK might be expected to get maybe $5 to $6 billion of this market. Why haven't they? Can the NOK board and shareholders be happy about this? With Sprint's recent adoption of Snaptrack technology to implement the government's 911 requirements, how is NOK ever going to sell a phone to Sprint?

PS. For Hockey-Puck, NOK IS TOAST!

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To: tero kuittinen who wrote (46)11/14/2000 3:37:18 PM
From: EJhonsa   of 8779
 
I don't think that you fully understood what I was trying to say. Over the past few months, on numerous occasions, I've stated that, considering how much work, time, and money has gone into it, and how far the industry leaders are into product development, a W-CDMA upgrade comes across as the best possible choice for current GSM operators. You should've seen how heated some of the arguments that I got into on this subject over at the Qualcomm boards were.

I'm just skeptical about whether it's the best choice for the South Koreans, who have billions invested in existing IS/95 infrastructure, and for American TDMA operators, considering their investments in ANSI-41 cores, their use of 2G and 3G spectrum bands that are different from those that the European and Asian GSM/W-CDMA operators are using, and the problems related with 700 Mhz. band auctions. Huge difference.

As far as 3x development goes, SK Telecom's gone on record stating that it won't be rolling out with W-CDMA until the 2nd half of 2003, so that local manufacturers can catch up. Considering that 3xMC (full-fledged cdma2000) specifications are expected to be completed around the middle of next year, chances are that cdma2000, using your definition, will be available by then. Likewise, with the FCC spectrum auctions already having been pushed back, and with all the negotiations that'll have to take place with TV broadcasters, cdma2000 3x should be available by the time the 700 Mhz. band's opened up. Unlike Europe and Asia, the issue of somewhat-delayed 3xMC standards development appears to be a moot point in these two cases.

Eric

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To: EJhonsa who wrote (49)11/14/2000 3:51:45 PM
From: tero kuittinen   of 8779
 
Those are good points, Eric - and I at least try to understand the network problems. But I get this sense that a lot of people aren't even attempting to understand the consumer product side of the equation. That's why so many people flat out refused to even consider the possibility of Korea adopting W-CDMA. They only looked at the network build-up costs and simply refused to contemplate roaming and handset availability. I'm talking about the consumer product issues, because that is something many people have resolved to ignore at all costs. That doesn't mean I don't accept the spectrum problems - I just don't rank it as the most important issue in the industry.

In addition to Korea, the "no way, no how" mentality was used to shut out any possibility that Brazil might want to migrate to W-CDMA. And now the indications that AT&T and Cingular are considering adopting GPRS is also facing the same incredulity and scorn.

It's clear by now that Korean operators do not want to end up with a 3G standard that would isolate the country from full-fledged Asian roaming. It is possible that cdma2000 can guarantee region-wide roaming - but it does not look likely.

You talk about cdma2000 being available by 2003. Fine; but this does not address the production volume problems. It does not remove the uncertainty about just how committed the handset vendors willl be. If Korean IT companies are now doing a sharp U-turn to realign themselves with the W-CDMA world - would they really cherish the chance of another U-turn in a couple of years?

Spectrum problems may be a really big issue - but apparently the "orphan standard" issue looms just as big. Ignoring the latter issue only makes the recent decisions made by various operators seem totally incomprehensible; which they are not. There aren't any easy options left for either Korea, Brazil or US TDMA operators. They just need to pick the smallest evil. Those decisions are not going to be a slam-dunk - which some expected them to be.

Tero

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To: EJhonsa who wrote (49)11/14/2000 3:57:09 PM
From: deeno   of 8779
 
As a non tech consumer, Why do I care about any of these standards. What is it that they offer thats going to make me throw out $200 phone or $400 palm in the trash and buy a new one or if I dont have one, why should I buy one of these? Now I know that this discussion of standards is vitally important to the various infrastructure companies and profitability is ultimatly important, but if these guys dont sell more equipment or services the industry will likely remain very quiet. It seems to me the company that brings these new fangled stuff FIRST and makes me throw away my old stuff is going to make money first. So CDMA2000, WCDMA, IS-95, bluetooth, 802.11, Who has something I can buy over the next 12months.

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To: tero kuittinen who wrote (34)11/14/2000 5:12:31 PM
From: Eric L   of 8779
 
Tero,

<< There have been two major surprises this year regarding 3G ... Brazilian decision to implement GSM-1800; The second was the decision of the Korean operators to implement W-CDMA >>

I'd like to comment on the Brazilian decision which as you know really surprised me, rather than the Korean operators decisions, which surprised me considerably less.

<< the main reason for this expensive roll-out was the wish to get into the GPRS and W-CDMA pathway >>

I'm not sure why anyone would want to get into the GPRS pathway unless they currently operate a GSM network.

The only advantage of that pathway to a carrier, that I can see, is the fact that it extends the life of an existing partially or fully depreciated, "unevolved" and technologically obsolete, GSM network. There is better, faster, more cost effective, available technology for achieving packet based higher data rates.

Here, however, we are talking greenfields for a GSM-1800 network buildout (but not a CDMA or TDMA network upgrade) and a GSM-1900 network could have been implemented, at approximately the same cost as a GSM-1800 network.

All this leads us to a more valid reason for 1800-MHz, the fact that this will, in fact, be an "expensive roll-out".

As for the W-CDMA pathway perhaps there is some validity. I can certainly see why Brazil might want to avoid the spectrum trap that the USA is in, and it gives them some greater flexibility for the future as a consequence.

You offer three additional explanations on behalf of Anatel (and the Koreans).

<< 1. Economies of scale for GPRS and W-CDMA handsets is going to swamp all competition ... the R&D expenses poured into GPRS and W-CDMA tower over anything being spent on rival technologies >>

I'm not so sure about economies of scale in handsets as it relates to Brazil. CDMA WAP handsets are plentiful, fully featured, and competitively priced, and available from the same manufacturers that may have to bail out European and Asian carriers implementing GPRS and WCDMA.

As for economies of scale, 3GPP WCDMA & OHG 3G3 initiatives will indeed produce economies of scale for all technologies, due to common componentry. I'm not sure there is a real benefit here for Brazil

R&D expenses will indeed pay off in the long haul, in terms of batteries, smart antenna, power amplifiers, chip technology, SDR, and all of the items that are propelled along by technology evolution.

<< 2. True, affordable global roaming can only be achieved through GPRS and/or W-CDMA >>

A very valid consideration and one that carriers are certainly buying off on. It appears Anatel bought this one, even though NA is the most frequent travel destination of Brazilians.

<< 3. cdma2000 may not live up to expectations. >>

Possible. Successful application of FUD?

I am going to suggest two more reasons.

A. ECONOMIC

The auction for nine licenses will attract some "Big Pocket" bidders that are familiar with the 1.8 GHz standard, like Vodafone, BT and Deutsche Telecom AG and incumbent TIM.

GSM specific investments by telecom manufacturers in manufacturing facilities. A nice shiny new Nokia plant, for instance.

Capital expenditures and jobs for network buildout for the aforementioned "expensive roll-out".

B. STRATEGIC SALESMANSHIP

Simply said, GSMA, UMTS Forum, the ITU, and Nokia simply "outsold" and outhustled CITEL, CDG, and Qualcomm. Perhaps they were better tuned to what would really satisfy Anatel.

Hats off!

Renato Guerrero the Director General of Anatel perhaps summed it up best when he was asked: "Who do you want to please more: the ITU, which is recommending 1.8 MHz or the Inter-American Telecommunication Commission (CITEL), which proposes 1.9 MHz?"

He responded:

"We are considering various aspects, the first one being our commitments to CITEL and ITU respectively. There are other considerations, which are by no means exhaustive: national industry capacity to manufacture terminals and equipment to one or the other specification; the issue of technical convergence: which one will create the strongest synergy between fixed and mobile; which of the two choices will make it easier for mobile consumers to switch between operators; price reductions and new features for consumers and finally, the question of the synergy with the rest of the Mercosur market, although there is the fact that Venezuela has adopted a different approach".

For a QCOM perma-bull like myself, Brazil was a lot harder to swallow than the Korean "Flip". QCOM gets paid on any flavor of CDMA. It gets nada out of GPRS.

In addition, there is a silver lining in the Korean decisions. Harmonization and interoperability of 1xWhatever & DS will accelerate

Stay tuned, however, there may be some CDMA-1800 surprises in store come auction time. <g>

- Eric -

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To: EJhonsa who wrote (49)11/14/2000 6:17:20 PM
From: Eric L   of 8779
 
Eric,

<< Considering that 3xMC (full-fledged cdma2000) specifications are expected to be completed around the middle of next year, chances are that cdma2000, using your definition, will be available by then >>

I could be entirely wrong (won't be the first time), but so far as I know 3xMC (what CDG calls cdma2000 Phase Two) specification development has not yet commenced, and has no established priority within 3GPP2.

3GPP2 correspondence I have reviewed is prioritizing 1xEV-DO (HDR) which is now in TIA standard, and plans to now attack 1xEV-DV and other elements of the redefined cdma2000 Phase One standard.

I believe that this is the reason DDI balked at cdma2000 in 2 GHz. What they thought was going to be available in lets say 2002, all of a sudden looked more like 2004 to 2005. Great cries of FUD echoed across the boards when the press reported all this. After all, us Qheads firmly believed 3xMC was right around the corner.

It would appear that DDI bought off on a 1x-Whatever solution. Good sell job and us Qheads breathed a sigh of relief.

I further believe that this is at least part of the reason that the 3 Korean carriers are adamantly holding their ground on their WCDMA decision for 2 GHz.

If you look at the network plans of SK Telecom and KTF that were posted on the CDG web site in April you will notice that they had different approaches to 3G3.

SK Telecoms plan was to evolve their existing network through each of the cdma2000 evolutionary steps for existing spectrum, and implement WCDMA with an evolved GSM/MAP network connected to the ANSI-41 network through a bridge with hooks and extensions for 2GHz. State of the art stuff right out of the IMT-2000 textbook.

By contrast KTF planned to evolve their existing network through each of the cdma2000 evolutionary steps for existing spectrum (including HDR phase one and HDR phase 2) and approach 2GHz with 3xMC on an evolved ANSI-41 core.

Whoops! No 3xMC. No 5 MHz carrier. Concept, as Tero would say.

As I say, I could be wrong about my suppositions and the status of 3xMC, but that is my take.

Remember that Korea proposed not one, but two, 2GHz CDMA proposals to ETSI and 3GIG. Both used 5 MHz carrier and both were asynchronous.

I don't have a clue as to whether synchronized 1.25 MHz carrier CDMA will outperform 5 MHz carrier unsynchronized CDMA.

I have listened, as best I am able, to proponents of both approaches.

It is my impression that the Korean carriers are strongly of the opinion that the best way to optimize the spectrum that has been set aside for them for high-speed multimedia services such as voice, Internet access and videoconferencing, is to use IMT DS.

It looks like we will not know the carriers final decisions and who gets the first 2 licenses till December, but right now it sure looks like the preference is IMT DS (WCDMA).

- Eric -

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To: tero kuittinen who wrote (50)11/15/2000 1:22:00 AM
From: EJhonsa   of 8779
 
In the case of South Korea, I think that standard, consumer-related issues had little or nothing to do with SK Telecom's decision to go for W-CDMA. The primary impetus seems to have revolved around the ability to attain far greater roaming revenues. My guess is that, had SK Telecom not opted for W-CDMA, neither LG Telecom or Freetel would've done so either; but since SK Telecom did act in the manner that it did, these two were put in a tough spot, one where the consumer-related issues came to the forefront, with the largest of these issues being, as you pointed out, that SK Telecom would most likely have a superior set of handset offerings should LG and Freetel opt for cdma2000, something that would be accentuated by a shift in handset development priorities on the part of Samsung. I'm sure that the fact that it'd be harder to convince an SK Telecom subscriber to change carriers should he have a W-CDMA handset without cdma2000 support also was factored in. However, the point is that, had SK Telecom not been enticed by the roaming revenue issue, and had opted to stick with cdma2000, chances are that the other two would've acted likewise, and the handset and roaming issues could be ignored the same way that they're "ignored" in South Korea today.

As for Nextel and the American TDMA operators, I'm not sure how the consumer appeal issue can favor a GSM-WCDMA upgrade path over an IS/95 upgrade. First, for voice pricing, not only would they not benefit from the capacity gains of a 1x rollout, they'd also end up indirectly passing down the costs of building out a GSM-MAP core to their subscribers. Second, considering that all of these carriers operate in the 800 Mhz. band, the handset issue probably wouldn't work to their favor. While CDMA 800-1900/AMPS tri-modes are currently plentiful thanks to Verizon and others, GSM 800-1900/AMPS tri-modes would have to be created for AWE and Cingular.

Lastly, the spectrum issue does matter a lot in terms of the services that are offered to consumers. It'd be a mistake to look at the slow consumer uptake for that sorry excuse for an interactive paging service known as WAP, and assume that future mobile data applications will be met with an equally lukewarm response. Provided that the cost isn't prohibitive, and privded that they're implemented properly, I think that streaming video and MP3 playback could especially see levels of demand that blow away all expectations. However, the problem is that if the 700 Mhz. band isn't cleared up three years from now, these carriers will have to depend on their existing spectrum for such broadband offerings. Assuming that they have enough existing spectrum, this probably won't be a problem for Sprint and Verizon, with their plans for 1x and, in Sprint's case, also HDR, but how will any carrier stuck with GPRS fare? I don't think that video clips come out too well via 30 kbps connections.

Or, suppose that, within three years, the TDMA carriers were able to clear out some of the spectrum that they won in the 700 Mhz. band, but not all of it. As I stated earlier, since W-CDMA requires the use of 5 Mhz. carriers, this could severely limit their flexibility here. This, in turn, would mean that these carriers could have less spectrum to work with when they roll out 3G offerings within these bands, and this would force them to increase their prices.

Once again, these are all consumer issues. The average person might not care about network air interfaces and FCC spectrum auctions, but he will care if one carrier charges twice as much as another for an equal amount of voice minutes, and if the cheaper carrier also offers a greater number of handsets to chose from, and allows him to watch highlights of a football game while he's at Disney World or Central Park.

Eric

PS - Eric L., I think you're right on this one. After doing a few quick searches, it now appears that I got the 3xMC standard confused with 1xEV-DV, the latter of which will have its specifications published by the middle of next year, and thus should be available by 2003. I couldn't find anything on 3xMC standardization. However, with that said, with 1xEV-DV set to offer significantly higher capacity levels when compared to 1xRTT, as well as maximum data rates of 3-5 mbps, I'm having trouble seeing how, assuming that the 2 mbps stationary/384 kbps mobile version of W-CDMA is the primary version that's utilized in 2003, the use of 1xEV-DV will put any carrier which choses to implement it at any sort of technological disadvantage when compared to rivals that happen to be using W-CDMA. The issue of the technology's name seems to be more of a semantical one.

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To: tero kuittinen who wrote (50)11/15/2000 4:30:40 AM
From: Labrador   of 8779
 
On a somewhat related matter, GPS is a topic that NOK must address -- any idea on its plans?

I did note your Nov. 3 article in The Street, where you recommended Cellpoint [CLPT]. Your comment is "It is one of the few carrion stocks of this year worth nibbling at." Do you really think that CLPT can compete in this competitive marketplace?

I do note since your recommendation of November 3 [less than 2 weeks ago], the stock has plummeted 33% from $15 down to a miserly $10. Will NOK do a big deal with them? What's your gut?

I think that Sprint's announcement vis-a-vis Snaptrack took the winds out of the sail of Cellpoint. The total market cap of Cellpoint is now $100 million -- NOK could take them out in a moment if their technology was capable.

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To: Labrador who wrote (55)11/15/2000 8:28:35 AM
From: Puck   of 8779
 
In fact, Nokia has taken initiative in positioning itself in the mobile positioning market, as you suggest would be prudent. Nokia, Ericsson, and Motorola recently formed the Location Interoperability Forum (LIF) to promote the "development of common interfaces" so that "differing applications will be compatible with all positioning and location systems." In fact, Nokia and Ericsson both invited to Cellpoint to join the forum in recognition of its leadership position in the mobile location industry, as Cellpoint's Corporate Update states:

LIF - LOCATION INTEROPERABILITY FORUM
CellPoint accepted an invitation to join LIF (http://www.locationforum.org/) at the Rome Mobile Location Services Conference. CellPoint welcomes the Location Interoperability Forum initiative and considers it very positive for an industry in which we are seen as leaders. The competence within CellPoint will make a positive contribution to the work that of LIF, in much the same way as our contributions to the WAP Forum, where we serve as Editor for parts of the location standards.

The creation of LIF and the commitment from the major GSM infrastructure suppliers (Ericsson, Nokia and Motorola) confirms that CellPoint is on the forefront of an emerging growth market and will be looked to for guidance on the future direction of location services. CellPoint's applications and our Mobile Location System are in line with, and will support, the LIF recommendations. LIF plans to have representation from network operators and equipment manufacturers, plus the service providers responsible for deploying equipment using location solutions. By encouraging the development of common interfaces, differing applications will be compatible with all positioning and location systems.


And in case you weren't aware, Nokia is currently providing phones to the Swedish operator TELE2 that allow for the provisioning of Cellpoint's services to TELE2's customers:

cellpt.com 

Sprint's choice to use Snaptrack's technology really has no practical bearing on Cellpoint because Cellpoint's solution is GSM/WCDMA based. Cellpoint has, however, won the only two contracts in which it competed head-to-head with Snaptrack and the other contending mobile location companies. Cellpoint won a mobile positioning services contract for fleet management from France Telecom last summer at a time when France Telecom was known to be testing Snaptrack's solution:

cellpt.com 

More recently, Cellpoint again beat Snaptrack for a contract with the Czech operator Eurotel for the same type of retail client services that Snaptrack will be providing Sprint:

cellpt.com 

The mobile positioning market is estimated to become quite large on a global scale and no one company will dominate it--there will be a number of players in their various niches. Cellpoint's solution has come distinct advantages. Because it is software based, no hardware need be installed in the network as network based solution require, just a simple software overlay. Cellpoint's solution works with any GSM phone without the need for any additional hardware, as Snaptrack's solution requires. Furthermore, its open standard software based solution provides the flexibility network operators desire allowing for easy upgrades and interoperability and integration with service solutions from other companies, most of which haven't been created yet. Cellpoint's Corporate Update states that this flexibility of their solution is what ultimately influenced Eurotel to award them the contract:

Eurotel stated that one of the reasons they chose CellPoint was our open interfaces that make it possible for us to work with other positioning technologies and integrate other applications into our platform - we are future-proof. It is also one of the reasons we completely support the Location Interoperability Forum (LIF) initiative launced two weeks ago by Nokia, Ericsson and Motorola. This is what the LIF initiative is all about, something that CellPoint has been working toward for a long time. The moment Nokia and Ericsson approached us about this, we decided to join and support LIF, gaining membership with Nokia as our sponsors. So while at the Rome conference, Ericsson and Nokia could inform delegates that CellPoint was also supporting LIF.

Even though Cellpoint's handset based solution relies upon base station data, it allows for integration with GPS, so that when the user moves out from an area of high base station density, such as an urban center, to one with low base station density, such as a more rural area, the positioning service won't end, it will just switch to GPS from Cellpoint's as necessary. Cellpoint's service also allows for roaming between GSM networks. Aside from the fact that Cellpoint's solution is GSM centric, there is no substantive difference between SnapTrack's solution and Cellpoint's for the end user. You might also find Cellpoint's telematics Unwire subsidiary to be of interest. In the last couple months, Unwire has landed $20 mil. of contracts for its terminals.

cellpt.com 
cellpt.com 
cellpt.com 

I think that in the coming years Unwire will become Cellpoint's most important revenue driver, and all of the contracts I mentioned demonstrate unequivocally that Cellpoint certainly can compete in this "competitive marketplace". Cellpoint's ability to hire two senior executives from the leading Swedish wireless operator Telia is a further endorsement of their leading position within this industry the high regard other companies within the industry hold them.

To address your final point, the Nov. 3 article in which Tero advocated Cellpoint was, as you point out, less than two weeks ago. You appear to have overlooked the fact that the time frame for the recommendations was six months. Do you really thinks it's realistic or useful to judge a stock recommendations based upon its performance during a two week period, especially one in which technology stocks, of which Cellpoint is one, have been crushed globally because of strange events in the U.S. presidential race and poor earnings from a couple of personal computer vendors. Check back in six months, and thanks for giving me the opportunity to discuss this interesting and upcoming company!

Good Luck--


P.S. I recommend you educate yourself about Cellpoint and the other players in this space. As good a place as any to begin is Cellpoint's Corporate Update: cellpt.com  Then I would suggest you peruse the website paying particular attention to their press releases during the last year to follow their progress.

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