Can Qualcomm make 3G work in Europe?

Or is that the wrong question?
Written by silicon.com staff, Contributor

Or is that the wrong question?

"There is so much doom and gloom around 3G today, especially in Europe, because there is not very much knowledge of what's happening with CDMA services elsewhere in the world." Who'd say such a thing? Doesn't sound like a European or even someone from a company that has done much business in Europe. In fact, the answer is Jeff Belk, senior VP Marketing at Qualcomm. Such a statement is hardly surprising. silicon.com is often among the first to look at how people approach common business and technology issues in the rest of the world, so when we see broadband usage surge in Korea or Taiwan, or the mobile internet take off in Japan or the US - yes, the US - we take note. And right now, Qualcomm is riding high. This isn't merely because, relative to huge infrastructure providers such as Ericsson, Lucent, Motorola or Nortel, it has been moving forward but more because its advanced mobile technology is being used around the world in all sorts of interesting ways. The company points to the success of 3G services or 'near-3G' services (some people out there are sticklers for definitions) in Korea, Japan and the US. All-you-can-eat data downloading, high-quality colour camera phones, mobile gaming and more are becoming commonplace in these markets. And Qualcomm will point to versions of its underlying CDMA technology. Is the grass really that green on the other side? Has Europe blown its lead in mobile? Yes and yes, probably. A letter in the Economist last week from UK E-minister Stephen Timms pointed out European operators never had to settle on the W-CDMA 3G standard, now blamed for so many problems from slow network roll outs to the probable cost of handsets. They could have gone with Qualcomm's offering, CDMA2000. Yet that, says Qualcomm CEO Irwin Jacobs, is "a little misleading". He paints a picture where once generic CDMA was decided on as the route to go - and it is widely accepted as the sensible technological choice - there were political decisions made to come up with a standard that would maintain European vendors' place at the top table of mobile equipment. Thus, W-CDMA was born. The UMTS Forum, largely made up of vendors and operators backing W-CDMA, will point out the vast majority of 3G networks will end up as W-CDMA, not CDMA2000, despite what the landscape looks like now. The question is, however, what damage could W-CDMA do European operators and so too their customers? The developing 'nightmare' scenario is that we are left waiting for services the Japanese, Koreans and Americans are right now getting used to, and when we do get them, they will be more expensive, certainly in terms of handsets (made by just a few major vendors) and also services (clawing back outlay on licences). This is against a backdrop where even if governments changed licensing conditions, it is economically too late for operators to switch standard. So why does Qualcomm care? Because of its CDMA patents heritage it will only start to rake in the royalties once Europe has W-CDMA next to GSM. It will likely take about 20 per cent of W-CDMA royalties as opposed to 80 per cent from its CDMA2000. What's more, it wants to sell multi-mode chipsets to handset companies - a near certainty, given 3G was supposed to be global, so a GSM - W-CDMA - CDMA2000 chip is on the cards - and make money from a software platform it has called BREW, for running games and so on - less certain, given established alternatives. It is good to see what Qualcomm has helped enable elsewhere in the world but depressing to think Europe may not match it, especially after the success of GSM and the presence of a heavyweight such as Nokia - tellingly just about the only major equipment vendor that won't work with Qualcomm. As for that opening question? No, Qualcomm cannot work 3G magic in Europe, certainly not single-handedly. There are too many interest groups, too many entrenched vendors and a number of recent blunders working as barriers. However, it can itself benefit when 3G takes off, and that, understandably, is its agenda.
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