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Finland's mobile licensing to set trend in Europe
Tue Jun 14, 2005 3:40 PM BST


By Tarmo Virki and Lucas van Grinsven

http://today.reuters.co.uk/News/NewsArticle.aspx?type=internetNews&storyID=2005-06-14T144050Z_01....

HELSINKI (Reuters) - Finland will select a new wireless network technology from the United States next week in a move being watched by other European governments that are opening radio spectrum for mobile broadband Internet.

Finland was the place where the European-invented Global System for Mobile Communications (GSM) first went on the air in 1991, setting off a revolution in mobile communications. But this time around there is no European technology alternative.

Seven consortiums have put in bids for the 450 Megahertz (MHz) radio spectrum that was left unused after operator Sonera shut down an analogue mobile network in 2002, and all seven have proposed U.S.-made wireless network technology to cover even remote areas with fast Web access.

Two groups propose to use the CDMA technology that is already used for mobile phone networks in the Americas and parts of Asia, while five others have announced they would use the new and partly unproven Flash-OFDM technology from unlisted Flarion.

If Finland opts for CDMA, this would create a stronghold for the technology as neighbouring Sweden and Norway have in the past year issued 450 MHz licences to Nordisk Mobiltelefon which uses CDMA (code division multiple access).

"What goes on in the Nordics is watched around the world and what happens here has credibility far beyond the number of inhabitants," said David Poticny, head of European operations of Lucent Technologies, which makes CDMA equipment.

Austria, Ireland, Britain and France will also award 450 MHz licences in the near future. Germany has already awarded two licences, but has yet to decide on the technology it will use.

"CDMA is the dark horse in Europe," said Copenhagen-based mobile telecoms consultant John Strand.

"But there are two things that are very important for new mobile phone networks: interoperability and who has the cheapest handsets and the most choice, and CDMA will lose that battle against current 3G in Europe," Strand added.

In Brazil, CDMA has lost market share against GSM for the last three years, because customers can get cheaper handsets and have more choice with the latter technology, Strand said.

This is not a concern for Flash-OFDM, as it does not compete for mobile callers.

CDMA technology was invented by San Diego-based Qualcomm and the company delivers virtually all of the chips needed in CDMA networks and mobile phones used by some 500 million consumers. Flash-OFDM is used for fast Internet access on computers, and is only now getting out of the test phase.

AFTER FINLAND

A win in Finland could set Flarion UP for life. It is hoping that its rival's CDMA technology will lose out because it is not a dedicated wireless Internet technology.

"GSM was highly successful because it took a popular service, voice telephony, and made it mobile. Now, we're doing the same thing with broadband Internet," said Joe Barrett, marketing director for Europe at Flarion.

Politically, CDMA is at a disadvantage because it is a proprietary technology from a fierce competitor to the country's leading technology firm, Nokia.

Flarion has tried to pre-empt concerns about the proprietariness of its technology, saying it will enter Flash-OFDM into the standardisation process to allow everyone to license it at fair and reasonable terms.

Technologically, CDMA offers yet another mixed voice and data network rather than a radically new network optimised for fast mobile Internet.

"Offering voice services will not be forbidden, but the main issue here is fast data transfer," said Antti Kohtala, an official at the Finnish communications ministry.

CDMA claims download speeds that enable decent quality video, while Flash-OFDM should be about twice or three times as fast and even better performing near the edge of the radio cell.

Operators using CDMA see the cost of the network at some 60-100 million euros, while peers that have opted for Flash-OFDM expect investment to be roughly half of that due to less costly equipment and as they can use the existing Internet backbone.