Qualcomm to deploy cdma2000 service in Australia

Qualcomm announced today that it will provide commercial third-generation (3G) wireless service in Australia using cdma2000 1x/1xEV networks by the fourth quarter of next year through its subsidiary, which won 2x10 MHz licenses in Australia’s 3G wireless spectrum auctions.

Qualcomm’s 3G Investments (Australia) subsidiary paid A$159 million (U.S.$79 million) for licenses that give it 10MHz of paired spectrum in the eight major “Capital City” markets of Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin and Canberra.

The auction lasted 19 rounds and generated total revenue of A$1.168 billion. Successful bidders have until May 3 to pay for the licenses, which will take effect in October 2002. Other successful bidders were:

Telstra 3G Spectrum Holdings—A$302 million for 15 MHz of paired spectrum ands 10 MHz of unpaired spectrum in all capital cities, as well as 5 MHz paired in regional areas;

Vodaphone Pacific—A$253.6 million for 10 MHz of paired spectrum and 5 MHz of unpaired spectrum in all capital cities, plus 5 MHz in regional areas;

Optus Mobile—A$248.9 million for 10 MHz of paired spectrum in all capital cities, 5 MHz of unpaired spectrum in Sydney, Melbourne, Brisbane, Adelaide and Perth, and 5 MHz of paired spectrum in regional areas;

Hutchison Telecommunications Australia—A$196.1 million for 15 MHz of paired spectrum in Sydney and Melbourne, and 10 MHz of paired spectrum in Brisbane, Adelaide and Perth;

CKW Wireless—A$9.5 million for 5 MHz of unpaired spectrum in all capital cities.

The Australian Bureau of Statistics says 10 million of Australia’s 19 million residents are mobile phone subscribers and that 50% of the country’s households will be connected to the Internet by June 2001. Qualcomm believes strongly in the potential for 3G services down under, said Irwin Jacobs, the company’s chairman and CEO.

“With strong demand for mobile and Internet services, the Australian market presents a significant opportunity for early deployment of 3G high-speed wireless, always-on Internet services,” Jacobs said in a statement.

The company further predicts a rapid increase in average data volumes for mobile wireless users in Australia, with volumes exceeding 200 megabytes per user, per month by 2006.

According to Cliff Raskind, director, global wireless practice, wireless Internet applications for Strategy Analytics, today’s announcement wasn’t surprising, given that CDMA—and hence, Qualcomm—has “gained some traction” in Australia.

“CDMA scales particularly well in the unique Australian environment,” he explained, “both in terms of user capacity gains and the geographic coverage improvements expected utilizing Nortel's ‘boomer’ cell, which offers a range of 120-130 kilometers, or 10 times that of a conventional cell site.

“This announcement is not entirely surprising as, outside of Korea, Qualcomm has intonated that Australia would be the first country to commercially launch 1X sometime this year. Likewise, the 1X-EV path presents opportunities to gain first-mover advantages in penetrating the fixed/portable wireless Internet market sooner than competing alternatives.”

What was surprising to Raskind was that Qualcomm benefited from the fact the bidding in Australia's 3G-spectrum auction failed to rally as some had hoped.

“Qualcomm's acquisition of this spectrum at the minimum reserve price of U.S.$79 million represents a veritable bargain, enabling them to grab more than enough spectrum to develop and launch HDR-based services in major developed markets down under,” he said.

Raskind believes that the ability of HDR-based technologies such as 1XEV/DO to swap in and out voice cards as required “is an important attribute in a developing region where urban sprawl can encroach on remote areas quickly and flexibility is important.”

Finally, he added that the expected availability of “some 14 1X-enabled handsets this year, many of which are manufactured in the Asia/Pacific region and [developed] on a chassis with chip-level upgradability to 1X-EV does bode well for a CDMA migration path to true 3G in Australia.”