WW-123 -- Does EV-DO REALLY have scalability problems?

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J@pan Inc presents the Wireless Watch Newsletter:

W I R E L E S S W A T C H

Commentary on Japan's Wireless World
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Wireless Watch Newsletter
Issue No. 123
Wednesday, March 17, 2004
TOKYO

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CONTENTS

@@ Viewpoint: Does EV-DO REALLY have scalability problems?

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@@ Viewpoint: Does EV-DO REALLY have scalability problems?

The 3GSM Congress in Cannes gave us an excellent opportunity to talk to
industry insiders and hear the latest stories and rumors in the mobile
biz. While the rollout of the 3G W-CDMA networks in Europe was one
of this year's hot topics, not much was said about the success of cdma
in Asia and the Americas. Among the rumors we heard were: cdma's EV-DO
experiences scalability problems, and Korean carriers are introducing
trouble-proof W-CDMA networks -- in the future.

Did we miss something?

Despite the large number of EV-DO subscribers, Korean carriers SK
Telecom and KT Freetel are now testing the W-CDMA service on a limited
scale with 30,000 subscribers. According to Qualcomm's Korea President
S.W. Kim, this test-bed is the result of Korea's industrial policy to
stimulate Korean handset manufacturers to develop and test their
3G devices for export, and has nothing to do with technology problems.

Video telephony is declared to be a killer-service for 3G. DoCoMo is
providing video telephony as one of its FOMA services, using a circuit-
switched 64 kbps network. To establish and maintain a real-time video
connection between peers, EV-DO technology was enhanced to support
QoS (Quality-of-Service).

"The QoS feature improves the user's experience by enabling the network
to manage capacity at base station level and prioritizing traffic to
users that require higher speeds," says Sanjeev Verma, co-founder and
vice president of marketing at Airvana, a company providing EV-DO
technology. The service will soon be available in Korea.

"We trialed video telephony with the QoS enhancement with SK Telecom
and it worked well. There were no scalabilty problems at all,"
adds Qualcomm's Kim.

But is video really the killer-application for 3G? A recent survey of
300 Japanese by marketing agency and Internet research company
iBridge showed that 60 percent of users with a video-enabled phone
almost never use video applications such as downloading, streaming,
video- mail or video-calls. Poor image quality, high traffic
fees, a limited number of friends to talk to and short duration of
videos were given as main reasons for not using video. This trend
was confirmed by Kim, who told us that music downloads in Korea
are the most popular service now.

For the time being, Japanese 3G users don't experience any scalability
problems with KDDI痴 network, though the company will not disclose the
numbers for its EV-DO WIN-service. KDDI outnumbered DoCoMo in February
for the fourth month in a row by adding more net subscribers. Even
the introduction of the new 900i FOMA phones from Fujitsu and NEC
cannot stop KDDI -- at least for now.

The rumors we heard in Cannes appear to be an attempt to downplay
EV-DO's striking successes in the Far East.

-- Arjen van Blokland

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STAFF
Written by Arjen van Blokland; Edited by Roland Kelts
(editors@japaninc.com)

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