Can NextWave create economies of scale for TD-CDMA?



Can NextWave create economies of scale for TD-CDMA?
NextWave is certainly doing its best to make sure that TD-CDMA, also known as UMTS TDD, technology breaks into mainstream. The broadband wireless technology, which works as advertised, has long suffered from a lack of economies of scale. When NextWave bought the technology's maker, IPWireless, in April many questioned how NextWave could drum up support for the technology. It may have found the answer. Late last week, NextWave announced plans to purchase a 69.23 percent stake in Tokyo-based IPMobile from Mori Trust, which bought the stake in April, and to speed up the operator's deployment of TD-CDMA technology. (See our first story.)

IPMobile secured spectrum in the 2 GHz band for mobile services in November 2005 along with Softbank and Emobile. Both of those companies have launched service, but IPMobile has struggled to find financing to deploy a TD-CDMA network. According to Liz Kerton, executive director of the Global UMTS TDD Alliance, IPMobile is expected to cover Japan with up to 8,000 base stations. She believes such a commitment to TD-CDMA should "kick production into high gear and bring major vendors into the ecosystem."

TD-CDMA backers have certainly had their fair share of disappointments. Sprint Nextel's decision to deploy WiMAX over TD-CDMA dealt a heavy blow to IPWireless last summer. The technology has had a nice handful of wins in countries such as the Czech Republic, New Zealand, Germany, South Africa, Sweden and the U.K. But they haven't created the economies of scale the technology has desperately needed.

Of course, IPMobile's success in Japan isn't a shoe-in. It's launching into one of the most cut-throat mobile markets in the world. Even the world's biggest mobile operator, Vodafone, couldn't make it there. It sold to Softbank last year. (However, Softbank has turned the business around nicely.) Plus IPMobile has to get the network up and running by October or risk losing its license. If it pulls it all off, however, IPMobile could beat the rest of the Japanese mobile industry, including giant NTT DoCoMo, to the punch when it comes to so-called 4G. NextWave Chairman and CEO Allen Salmasi said the network should be able to provide speeds of up to 30 Mbps, supporting a wide variety of bandwidth-intensive applications.

Could we finally see TD-CDMA technology moved to the upper echelon of the industry? --Lynnette

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