Cellular deal lifts Telecom

By Richard Braddell

WELLINGTON - A global agreement between Ericsson and Qualcomm that would sort out the future of the next generation of cellular standards should prove beneficial to Ericsson's long-term relationship with Telecom in New Zealand.

Ericsson's ongoing position as provider of Telecom's cellular infrastructure had looked less than assured after Telecom had embarked on a review of its cellular network.

This review involved Telecom considering the adopting of a second generation cellular technology not presently supplied by Ericsson.

However, the deal struck yesterday in which Ericsson will buy Qualcomm's terrestrial CDMA wireless business, and in which the two agreed to license patents and intellectual property rights to each other, will round out Ericsson's technology offering, filling crucial gaps. The importance of CDMA lies in its widespread acceptance as the dominant technology for third generation cellular.

But Ericsson, Qualcomm and their respective camp followers have been locked in dispute over whose version of CDMA should prevail in mobile's third generation while Ericsson has stood out among major vendors in not offering cdmaOne, the second generation technology under consideration by Telecom.

Qualcomm was one of the early developers of CDMA. It holds a number of patents and champions cdmaOne and its upgrade path to CDMA 2000, the main rival to Ericsson's W-CDMA third generation technology which is set to be adopted in Europe.

Telecom recently sought to quell speculation at a third generation conference in Sydney that it would soon decide on going for second generation CDMA, a move that would leave Ericsson in the cold.

Yesterday's deal changes the landscape completely. In addition to agreeing to cross-license each other's CDMA intellectual property, Ericsson and Qualcomm have agreed to promote development of a unified global standard for CDMA under the aegis of the International Telecommunications Union and other standards setting bodies.

In what looks a coup for Ericsson, Qualcomm has also agreed to sell its Californian headquartered terrestrial CDMA infrastructure business, including its research and development resources.

"Ericsson, through its agreement with Qualcomm - a pioneer in developing CDMA technologies - now has complete third generation competence," Ericsson's chief executive officer, Sven-Christer Nilsson, said.