Buy cellular phone wholesale

"Shoot the engineers and go to market," declared Robert Maher, former chairman of the Cellular Telecommunications Industry Association, when he publicly voiced the association's support of time division multiple access (TDMA) for digital cellular last January.

The limitations of technology, however, have forced a stay of execution.

Just a few months ago, it seemed like the U.S. cellular industry was headed full tilt into its digital transition. Los Angeles Cellular Telephone Co. signed a contract with Ericsson to upgrade its system to TDMA. Operators predicted that L.A. Cellular would be the first of many systems to go digital next year.

But enthusiasm for digital may have gotten ahead of the technology itself. Although TDMA infrastructure technology is, for all intents and purposes, ready to go, mobile and portable telephones that would work with both TDMA systems and today's analog cellular radio are still too heavy and expensive to be marketable. In other words, TDMA may be ready for the dance, but its date is still upstairs getting dressed.

To further complicate matters, any delay in TDMA system deployment is an advantage for a second digital format, code division multiple access (CDMA), which was at the point of being dismissed as an also-ran last January.

Nonetheless, Qualcomm Inc., CDMA's primary champion, maintained development at a feverish pace and over the course of the year, has enticed a number of cellular carriers into seriously testing the format. The industry now faces what it hoped to avoid earlier this year when it attempted to strong-arm CDMA out of the digital picture-a costly, drawn-out battle over a future standard.

The Digital in Digital Cellular

Digital cellular refers to the radio transmission between individual mobile or portable telephones. Almost all cellular switches or mobile telephone switching offices (MTSOS) being used today are digital.

The radio portion of the connection, however, is still analog FM, which allows only one conversation per radio channel. While analog technology serves most markets well, carriers say that in cities with higher-than-average cellular use-Los Angeles, New York, Chicago and Dallas to name a few-usage has grown to the point where even the multiple radio channels in each cell cannot accommodate demand.

Digital cellular radio permits carriers to place more conversations on each channel, thereby boosting system capacity. Upgrades primarily involve software changes at the MTSO and cell sites, and there is little equipment that is actually changed out.

TDMA, pioneered by Sweden's LM Ericsson, creates separate time slots within the channel to handle different conversations, much like time division multiplexers interleave different bit streams. It is generally agreed that TDMA can offer a 3-to-1 capacity boost and, as the technology improves, perhaps even more.

Further, TDMA systems have completed much of the mandated "lockdown" tests by the CTIA. A number of telephone vendors now are working with systems manufacturers and carriers to make sure their phone equipment is compatible with TDMA.

Another point in its favor is that TDMA also is the format of choice for global systems for mobile communications (GSM), the Pan-European cellular system just now getting off the ground.

CDMA, developed by Qualcomm, San Diego, uses a different kind of digital encoding format that the company claims can boost capacity 10 to 20 times. Cellular operators initially greeted this claim with skepticism, although in the past three months, U S West's NewVector Group and PacTel Cellular have announced that they will conduct CDMA trials. Nynex and Ameritech reportedly also are looking at the technology.

CDMA uses spread-spectrum technology, an exotic engineering technique that scatters the transmission over a range of frequencies rather than directing it down a single channel like conventional radio. CDMA was about a year behind TDMA in January, according to Craig Farrill, vice president of planning and development at PacTel Cellular. He now estimates that it is only six months behind.

In what may be a major breakthrough for CDMA, Qualcomm announced the availability of the application specific integrated circuit (ASIC) chip set last week at Telecom 91.

"Back in January, the big question was whether they could get ASICs built and make them work by the end of 1991," Farrill says. "Well, we've been able to see the chips, and now we're going to see if the product works."

PacTel will do its CDMA trial in San Diego using Eve cells. One advantage CDMA offers, Farrill says, is its wideband characteristics. These characteristics make it better suited than TDMA, a narrowband technology, for high-speed data transmission, including graphics and imaging. Nonetheless, PacTel is nowhere near committing to CDMA at this point. "Everyone's watching San Diego," he says, "but it is too early to tell."

Meanwhile, Motorola has offered an easy way for carriers to wait things out while engineers clash over the relative merits of TDMA and CDMA. Narrowband AMPS, an enhancement of the current analog advanced mobile phone system format used in the United States, although not a digital format, uses digital encoding techniques to boost system capacity about 3-to-1.

Centel Cellular in Las Vegas became the first commercial user of the technology last month (Telephony, Sept. 30, page 9).

NAMPS will be positioned as a "bridge" to whatever digital system is chosen, says Bernard Smedley, senior vice president and general manager of Motorola's Radio Telephone Systems Group. Motorola, like other system vendors, is capable of offering TDMA or CDMA cellular systems. It is just a matter of who gets the royalty check. If the TDMA-CDMA fight begins to drag out, however, some of those royalty checks may end up flowing Motorola's way.

"NAMPS might steal the show," observes cellular analyst Herschel Shosteck. Where Are the Phones? It is critical to remember that CTIA endorsed TDMA back in January because it was ready to go. The issue of which technology was better took a back seat to the carriers' desperation over capacity problems.

CTIA's push for TDMA may be for naught, though, if the phones do not materialize in time.

The industry has specified that all TDMA phones sold in the U.S. also be compatible with AMPS. These dual-mode phones will require chips that can process 45 million instructions per second (MIPS), according to PacTel's Farrill, as compared to 0.4 MIPS for current AMPS phones.

"It has to get bigger and heavier," he says.

By how much, though? It depends on whom you ask. Farrill estimates the first digital portable prototypes will be close in size and weight of Motorola's first DynaTAC cellular portables-about 28 oz.

Brad Bloomer, regional marketing manager for Centel, says he has seen some digital phone prototypes that weighed 11 lbs.

Shosteek, when asked if he had seen a dual-mode digital portable, laughed heartily.

The popularity of portables-more than any other factor-is the driving demand for cellular and the demand for more capacity. Right now, between 50% and 60% of the new market is for portable phones. Manufacturers have been trying to outdo each other to come up with the world's smallest phone since the introduction of cellular. At this point, no one is keen to reverse the trend, especially now that Motorola's MicroTAC Lite, the current lightweight title holder, can handle both AMPS and NAMPS.

John Stupka, president of Southwestern Bell Mobile Systems and chairman of CTIA's Technology Committee, is trying to give phone suppliers a shove.

The company, which operates systems in major population centers such as Chicago, Dallas and Washington, issued a request for proposal (RFP) to eight cellular phone manufacturers (Telephony, Sept. 9, page 3). The RFP covered prototypes through production models and called for marketable products by spring, when Stupka anticipates that some of Southwestern

Bell's TDMA systems will be in place. "If I can't have them by April, I don't want them," Stupka says.

But he may not have much choice. Shosteck believes few companies will be able to deliver by June. Even then, wholesale prices, which for AMPS phones today hover around $200, are likely to be $600 to $800 for digital.

Farrill figures digital phones will not be marketable until they are close to the same size as current models. "The days of the 17-oz. portable are over," he says.

First generation digital cellular phones probably will not be available until the fourth quarter, Shosteck says, and even then they are likely to be heavier and costlier than current phones.