New Technologies Spur War Over Mobile Phone Format

TDMA or CDMA? These may be technological jargons of the telecommunications industry, but these are also weapons of rival companies fighting hard to dominate the multibillion dollar world communications market that the next millennium is supposed to throw up.

CDMA stands for code division multiple access while TDMA means time division multiple access. Essentially, the two are technology formats that enable a mobile phone to communicate with its base station a sort of operating system. All components of the system revolve around these protocols. A CDMA system is different from TDMA and herein lies the fight.

The TDMA group came together in the Malaysian capital Kuala Lumpur last month to announce a new standard, IS-136 for digital wireless communication. This group calls itself Universal Wireless Communication (UWC) and includes AT&T, Ericsson, Nokia, Bellsouth and Hughes. The new TDMA standard makes it easy to convert earlier analogue systems into digital and to serve as multimedia platform in the years to come.

 

The CDMA community, which includes Motorola, NEC, Hughes and Lucent Technologies, has formed a CDMA Development Group (CDG) which met in Singapore last week and announced a new standard, IS-95, for all its member manufacturers and operators. The standard covers, voice quality, capacity and coverage.

The CDC is hawking its superior communications quality while the UWC speaks about one handset to cover cellular, basic and Internet services.

Interestingly, some companies have latched on to both bandwagons. Hughes, Nortel and NEC are working on both TDMA and CDMA based systems.

A senior executive of Nortel said it is not known which technology will go where. The good thing to do is to be prepared for both systems. You do not know which customer will be in what segment. Some countries will permit both systems while others would want a uniform standard.

Craig Farrill, president of CDG, claims that CDMA-based systems are around 50 per cent cheaper than comparable (read TDMA) personal communication systems. However, Leo Nikkari, executive director of UWC, says the TDMA systems score over others (read CDMA) in terms of expandability, conversion of older analogue systems into digital and a future all-in-one platform combining voice data and Internet. Nikkari says the TDMA-based cellular systems have over 6 million subscriber in 37 countries. The CDG says its CDMA companies have 2.5 million subscribers now and hopes to double its subscriber base by mid-1998, a faster growth rate than that of TDMA systems.

Firms working with both systems have already poured millions of dollars in research on improving quality and introducing flexibility.