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Friday, August 12, 2005 8:23:47 AM
http://www.pmn.co.uk/20050812flarion.shtml
12 August 2005 -- PMN -- With 3G only just starting to tip the balance of mass adoption in developed markets, talk of the next generation of mobile networks - inevitably referred to as 4G - may seem a little premature. However, major adoption cycles like the introduction of a new network technology have traditionally required several years of R&D, followed by an often slow and painful period for commercialisation. The industry has been toying with the concept of 4G for some years now without much sign of progress, but Qualcomm today took a major step towards declaring its intentions with a USD 600m acquisition of Flarion.
The deal gives Qualcomm access to Flarion's Flash-Orthagonal Frequency Division Multiplexing (Flash-OFDM) technology, an IP-based air interface which delivers wireless LAN-style data performance in a cellular environment. Crucially, Flarion's technology has much lower latency rates than 3G, making it ideal for multimedia delivery and services such as video calling, where even a few milliseconds of delay can have a considerable impact on the user experience.
Flarion is not the only company developing next generation network technology based on OFDM principles. Many mainstream '4G' options rely on OFDM in one form or another. However, Flarion has taken considerable strides towards commercialisation, including real customer trials with Nextel subscribers in the US, T-Mobile in Europe, SK Telecom in South Korea and Vodafone in Japan.
Most of these trials have been conducted using laptop computers with PC card modems, but Flarion has also been working extensively with chipset providers to optimise its technology for inclusion in mobile handsets. Impact on battery life, the size and cost of chips are all major challenges which Qualcomm will no doubt help Flarion to overcome.
In its commercial trial with Nextel, Flarion's network technology provides data transfer rates of up to 3 Mbs, with a typical downlink of 1.5 Mbs and uplink rated at 375 Kbs. Nextel charges from USD 35 to USD 80 for unlimited access to the service. The modem equipment costs about USD 100.
These data transfer rates may not seem materially different from those offered by CDMA2000 EV-DO or HSDPA, but there are some key differences which impact the user experience with Flarion's system. Firstly, the low latency times (around 30 milliseconds compared to 300 milliseconds with W-CDMA) deliver greater immediacy. Also, the system can support a larger number of users per cell without a significant degredation in performance.
Most importantly, however, Flarion claims deployment of its technology can be made at one tenth the cost of a comparable W-CDMA network. This means operators can rollout nationwide coverage more quickly and offer genuinely unlimited, 'broadband-style' data tariffs to mobile consumers without the typical, restrictive per megabyte pricing.
There may have been several factors which prompted Qualcomm's purchase of Flarion. South Korean operators have been exploring the technology in a range of trials, demonstrating a clear interest in Flash-OFDM in one of Qualcomm's key markets. Nextel, the only US operator to take Flarion to a full commercial trial, has recently merged with Sprint - a key Qualcomm customer - and both operators are commited to a CDMA2000 evolution upgrade path. Flash-OFDM could be a logical next generation choice for the combined Sprint/Nextel.
It also provides Qualcomm with an extensive OFDM IP portfolio. Qualcomm has built its business on the strength of its CDMA patents, generating most of its revenue from royalties. Flarion gives Qualcomm a similar position in OFDM and buys a powerful bargaining seat in any debate over future 4G standardisation.
PMN has previously published a wide range of analysis articles on Flarion and its competitors as part of the premium Mobile Industry Intelligence subscription service. You can subscribe to access these archives at http://www.pmn.co.uk/membership.shtml.
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