[no subject]

From: Newtons at Fruitlands <>
Date: Thu, 26 Nov 1998 19:47:51 -0500
Some interesting news stories on wireless issues.  Especially check out
Malaysia's strategy to combat the inefficiencies of redundant wireless
systems from multiple carriers.
                                Dale Newton
                     Malaysian operators share infrastructure

                     By Tammy Tan

                     SINGAPORE?Malaysia has launched a common antenna system
                     in its newly opened Kuala Lumpur International Airport
                     (KLIA), paving the way for future cooperation among
                     cellular operators in projects around the country.

                     The project, which started earlier this year, is the
                     first development in the new regulatory framework
                     formed by Malaysia?s Telecommunications Department, or
                     Jabatan Telekomunikasi Malaysia (JTM), on sharing
                     radiocommunications infrastructure.

                     That new policy directive, announced 1 August, was
                     taken to boost Malaysia?s telecommunications sector by
                     preventing the duplication of resources and reducing
                     investment costs, resulting ultimately in lower
                     subscriber charges.

                     JTM Director-General Datuk Hod Parman said the move
                     would result in not only wider coverage, but also fewer

                     ??This sharing of infrastructure is a symbolic venture
                     into new frontiers of development, an excellent
                     headstart toward facing the dynamic progress of the
                     telecommunications industry,?? he said.

                     Under the old framework, the nation?s six cellular
                     operators?Binariang, Celcom, Mobikom, Mutiara, Telekom
                     Cellular and Times Wireless?pursued individual
                     interests and business advantages, resulting in
                     non-optimal usage of network resources as well as a
                     lack of proper planning and coordination of nationwide
                     infrastructure, he said.

                     This is all set to change with the new guidelines.

                     Now the operators will be made to ??supply
                     telecommunications services to the customers in an
                     effective and efficient manner, thereby enhancing the
                     telecommunications industry?s ability to experience
                     higher growth stimulated by a competitive

                     According to Datuk Parman, the end result will be a
                     ??better and more efficient telecommunication network
                     and services to the customer, and a market that is
                     stimulated by a healthy and fair pricing.??

                     He said the government recognized efficiently and
                     effectively providing telecommunications network and
                     services were essential prerequisites for the continued
                     growth of the Malaysian economy.

                     ??Telecommunications is an important utility for the
                     public. In encouraging the network operators to enter
                     into agreements amongst themselves to share the
                     radiocommunications infrastructure, the government
                     would have met its objectives of minimizing wastage in
                     duplication of radiocommunications infrastructure,?? he

                     The first product of this new directive, the KLIA
                     project, brings together all six cellular operators in
                     the country at a cost of M$5 million (US$1.3 million).
                     In all, some 15 kilometers of coaxial cables will be
                     laid, with more than 600 antennas installed under the

                     Analysts say the decision to make such an investment
                     during an economic downturn shows the foresight of the
                     country?s telecommunications players.

                     Indeed, the benefits look set to be reaped almost right
                     from the word go.

                     Haji Pamlan Othman, general manager of Time Wireless
                     network engineering department, said the new system
                     would not only result in cost savings, but also boost
                     customer service. ??If we went in alone, it would cost
                     us three to four times more,?? he said.

                     Binariang?s director, YM Dato Seri Tunku Mahmud Tunku
                     Besar Burhanuddin, said, ??With this technology, we are
                     able to extend Maxis Mobile coverage to KLIA, which is
                     in line with our objective to cover all ports of
                     arrival and departure to the country. Furthermore,
                     Maxis Mobile has continuous coverage on the expressway
                     to KLIA to ensure our customers always stay in touch
                     while traveling.??

                     Besides the main KLIA terminal building, other areas
                     covered under the common indoor system are the Contact
                     Pier, Satellite A building, Malaysia Airports Bhd
                     Administration building, Pan Pacific KLIA hotel and
                     Bunga Raya building for VIPs.

                     According to Mutiara chief executive officer, Richard
                     Shearer, the launch was geared to open the way for
                     future cooperation among the cellular operators in
                     projects involving major buildings in Malaysia and
                     around the world.

                     It is understood that with the launch of the KLIA
                     system, Malaysian operators soon will start on shared
                     indoor coverage systems in all new buildings.

                     The supplier of the Malaysian shared infrastructure
                     system, L.M. Ericsson, said more of such facilities are
                     expected to be installed both in Malaysia and around
                     the region.

                     Already, its system has been installed in more than 300
                     indoor sites around the world, including Australia,
                     Ireland, Portugal, Spain and Switzerland. In the
                     Asia-Pacific region, Ericsson has implemented a similar
                     cellular indoor solution for Singapore?s Changi
                     International Airport.

                     Commenting on the difference between the Malaysian
                     project and other installations thus far, Ericsson
                     spokesman Dominic Tan said the ??main difference with
                     this project is that, never before [have] so many
                     operators and mobile standards come together to share a
                     common interface.??

                     Wireless savior required:

                     Apply within

                     By Stuart Sharrock, European Correspondent

                     OXFORD, United Kingdom?Romances don?t always last
                     forever. Mostly they decay gracefully at the close of a
                     seemingly predetermined life cycle. Sometimes they
                     blossom into universally admired permanent
                     relationships. Other times they collapse suddenly and
                     acrimoniously, leaving bitterness and recriminations.

                     The telecommunications and financial industries have
                     been enjoying a period of romantic involvement. The
                     telecommunications sector managed to retain its glamour
                     while other industries lost their emotional appeal to
                     investors. The fixed network sector is still a relative
                     favorite, wooing the financial markets with a series of
                     mega deals that owe little to trading performance but a
                     lot to maximizing asset value. Just the sort of
                     scenario the financial markets like.

                     The wireless sector has been less fortunate. The
                     wireless sector seems to have been suddenly jilted in
                     some quarters. Wireless operators no longer find
                     funding easy to come by; the presence of established
                     competition and the burden of outrageous license fees
                     has destroyed the appeal of their business case.
                     Wireless operators are increasingly being funded by
                     infrastructure manufacturers, reducing the vendors?
                     margins and in turn destroying their appeal to the
                     financial community.

                     The financial community can relate to the fundamental
                     changes affecting the fixed network world. It?s a world
                     that has been turned upside down by the Internet, and
                     the Internet is still sexy and full of promise. Massive
                     opportunities in the fixed world arise from the
                     combination of globalization, massive demand and the
                     need for new technologies.

                     The wireless world is also about globalization, massive
                     demand and the need for new technologies. But that
                     message has somehow not goten across. The wireless
                     vision is nowhere to be seen.

                     Manufacturers are suffering. Alcatel has seen its share
                     price plummet by almost a factor of two. L.M. Ericsson
                     is implementing yet another massive reorganization
                     plan. Nortel also has reorganized, dropping out of the
                     wireless terminal market and pulling away from the
                     radio access business following the Ionica debacle in
                     the United Kingdom.

                     Lucent Technologies Inc. and Philips Electronics N.V.
                     abandoned their wireless handset joint venture.
                     Motorola Inc. is struggling, suffering badly from the
                     glut in semiconductor manufacturing.

                     The list goes on.

                     The root causes are complex. Repositioning for the
                     shift from a voice-centric to a data-centric world,
                     from a circuit-switched to a packet-switched
                     environment, is not an easy task for traditional
                     telecommunications vendors. Changing the culture of the
                     slow-moving, standards-dominated telecommunications
                     community to encompass the rapidly changing, anarchic
                     environment of the IT and computer worlds is even more

                     But the biggest challenge is to convince the financial
                     and investment communities that wireless is still an
                     area of unfulfilled promise. The wireless vision needs
                     to be promoted if the romance is to come back into the

                     Promoting visions requires visionaries. Where are they?
                     Where are the Bill Gates and the Rupert Murdochs of
                     telecommunications? You may not like these gentlemen or
                     even admire what they do, but you cannot deny their
                     effectiveness in promoting the computing and
                     broadcasting worlds. Such people are needed.
                     Effectiveness matters; effectiveness gets things done.

                     Outstanding candidates for telecommunications
                     visionaries within the industry are hard to find. I can
                     think of a few possibilities from the fixed network
                     sector. I have more difficulty with wireless. Who is
                     there within our industry who could really drive it
                     forward, who could communicate the vision to the
                     outside world, who could provide a focal point for the
                     industry?s ambitions?

                     It?s a serious question. Answers on a postcard please.
                     Better still, send me an e-mail.

                     By Sara Frewen, African Correspondent

                     JOHANNESBURG, South Africa--Iridium, the first GMPCS
                     (Global Mobile Personal Communications by Satellite)
                     system is set to become commercial worldwide on 23
                     September, but will not have a signal over South

                     ''If we do not receive a license to operate ground
                     facilities and services by September this year, users
                     (in South Africa) will have to wait until June 1999 for
                     the Iridium service to become operational,'' said James
                     Rege, regional director for Iridium L.L.C.

                     A draft policy document on licensing conditions for
                     satellite telephony has been issued by the South
                     African Department of Posts, Telecommunications and
                     Broadcasting, with a formal policy to be issued after
                     interested parties have had an opportunity to comment.
                     This then will be handed over to the South African
                     Regulatory Authority (Satra) for discussion and debate.
                     The process is not likely to be completed before April

                     ''We are moving into the rest of Africa,'' said John
                     Richardson, Iridium's chief executive officer for
                     Africa. Tanzania already is ready to receive the
                     Iridium signal, and more than sixteen other African
                     countries have followed suit.

                     In the next few weeks, most countries contiguous to
                     South Africa will be licensed. Those that do not have a
                     licensing policy in place have permitted Iridium Africa
                     Corp. (IAC) to operate through letters of
                     authentication to use the frequencies--subject
                     ultimately to GMPCS legislation being introduced at a
                     later date.

                     GSMPC operators have been complaining for more than a
                     year that the licensing process in South Africa has
                     been too slow.

                     Says Richardson: ''We have been holding discussions
                     with (the) government since 1997 and submitted our
                     formal application in February 1997. We have complied
                     with all the requirements laid down by Satra to become
                     eligible for the license. We are negotiating with black
                     empowerment groups to form strategic alliances. We have
                     employed well over 50 local people, have sent most of
                     them for intensive training in Dubai and Washington,
                     D.C., before returning to IAC's offices in Cape Town
                     and Johannesburg.

                     ''We should not be considered as a threat by existing
                     operators such as Telkom (S.A.), but rather as a useful
                     incremental service with formidable benefits especially
                     for rural areas. It will be a great loss for South
                     Africa's future economic development and technology
                     deployment if satellite technology was 'left out in the

                     If delayed in South Africa until 1999, Iridium will
                     lose its competitive edge locally, as it will begin
                     service almost simultaneously with other GMPCS
                     entrants. These include Globalstar L.P. and ICO Global
                     Communications, which plan to begin services in 1999.

                     Airships over Japan may become base stations for mobile

                     By Yaeko Mitsumori

                     TOKYO--The Japanese government is funding research for
                     a 1 trillion yen (US$6.85 billion) Skynet project,
                     scheduled to be ready for commercial launch in 2002,
                     that would use up to 200 airships floating in the
                     stratosphere as base stations for cellular networks.

                     While the Iridium mobile satellite system (MSS) project
                     is about to be launched and other MSS systems are
                     scheduled to begin services in 1999, the retro airship
                     technology may provide a challenge to advanced
                     satellite systems in the next century.

                     The system of airships, which would be launched to an
                     altitude of 20 kilometers above the Japanese islands,
                     is being planned to relieve cellular base-station
                     congestion in metropolitan areas of Japan. The
                     government says the airships also could be used as base
                     stations for next-generation multimedia communications,
                     as well as to monitor the global environment.

                     Proponents say airships are more beneficial than
                     satellites because they are cheaper and can transmit a
                     much larger amount of data, including motion pictures.
                     In addition, according to project planners, cellular
                     phone users using Skynet would be able to communicate
                     with a smaller terminal than an MSS terminal--possibly
                     as small as a wristwatch. Each airship would be
                     designed to serve 20,000 channels.

                     The Japanese Ministry of Posts and Telecommunications
                     (MPT) and the Science and Technology Agency (STA) are
                     promoting this project and jointly have allocated 900
                     million yen (US$6.17 million) for 1998 to promote the
                     project's first-phase studies.

                     Japan hopes a company or companies will launch
                     commercial service based on technology developed by the
                     government research.

                     The project will comprise three phases:

                     The first phase, scheduled to be completed by mid-1999,
                     will involve launching a small, 30-meter airship to an
                     altitude of 300 meters. Using the experimental airship,
                     scientists will study airship design, technology for
                     using millimeter wave band and sensors.

                     In the second phase, scheduled to be completed by
                     mid-2001, a 100-meter airship will be launched to an
                     altitude of 17 kilometers.

                     In the third phase, to be completed by mid-2002, a
                     prototype 200- to 300-meter airship will be launched to
                     an altitude of 20 kilometers.

                     The stratosphere, especially at the altitude of 20
                     kilometers, was chosen because conditions there are
                     stable all through the year. The average wind velocity
                     at that altitude is 20 meters per second--though it
                     changes depending on the season and on the location.

                     The airship for commercial launch is scheduled to be
                     270 meters long and equipped with a one-ton
                     communication mission. Using a global positioning
                     system, the airship will maintain the same position
                     over the Japanese islands. When it is blown off
                     position by wind, it will recover the original position
                     by spinning a propeller, using energy generated by
                     solar panels. The airships would be brought down every
                     couple of years for maintenance by releasing air from
                     the ship.

                     Takao Arai, deputy director of MPT's Satellite Mobile
                     Communications Division, admitted it is quite difficult
                     to develop the technology necessary for this project.
                     ''This is a completely new concept of airship,'' he
                     said. For example, conventional airships use fossil
                     energy, such as oil or coal, and float at 200 meters in
                     height--compared with using solar energy for an airship
                     all the way up at 20 kilometers.

                     When the system is completed, Arai said, it will
                     provide great advantages to both users and operators of
                     cellular. For example, since it uses an extremely high
                     frequency (EHF) or millimeter wave band, it enables
                     data to be sent at up to 25 Megabits per second.

                     Another advantage compared with satellites is that
                     construction and maintenance costs would be much lower.
                     The construction cost per airship is 4-5 billion yen
                     (US$27.4 million - US$34.3 million), about one-fourth
                     to one-tenth the cost of a geostationary satellite,
                     according to the MPT.

                     If 200 airships are launched, the total cost would be 1
                     trillion yen (US$6.85 billion). The government says
                     projected revenue for a company launching commercial
                     service would be 3 trillion yen (US$20.56 billion).

                     Russian crisis may slow VimpelCom's buildout

                     By Antony Bruno

                     If all goes as planned, Iridium L.L.C.'s vision of a
                     global wireless phone network--based on a constellation
                     of 66 low-earth-orbit satellites interconnected to
                     several terrestrial-based networks--will begin
                     commercial service on 23 September.

                     While the company continues to put the finishing
                     touches on the satellite network, which has experienced
                     a few failed satellites that are being replaced, the
                     primary effort now is to secure distribution and
                     roaming agreements with service providers in every
                     country possible, and to market the service to
                     potential customers.

                     According to Craig Bond, Iridium vice president of
                     market development, Iridium went about this by dividing
                     the world into 15 regions, each overseen by a franchise
                     partner that owns or shares one of the 12 Iridium
                     earth-station gateways, which connect the satellite
                     constellation to terrestrial-based networks. Some
                     regions are small enough that they can share a gateway.
                     All are investors in Iridium with the right to
                     distribute the Iridium phones and service by recruiting
                     local service providers and others.

                     There are two types of agreements--distribution and
                     roaming. Distribution partners agree to market
                     Iridium's portfolio of products and services. These
                     partners don't have to be service providers. For
                     instance, some distribution partners sell various types
                     of equipment and supplies to the mining, natural gas,
                     oil and shipping industries, of which the Iridium
                     communications program would be one.

                     Roaming partners are service providers that allow
                     Iridium customers access to their network and in
                     return, their customers can roam on any other Iridium
                     roaming partner's network in the world. Some roaming
                     partners also are distribution partners.

                     At press time, Bond said the company had secured 250
                     contracts in 113 countries for both roaming and
                     distribution. It is signing five to six new contracts a
                     week and adding one or two new countries in the fold.
                     Most countries have contracts with several providers.
                     For instance, Iridium signed 23 such contracts in
                     Russia alone.

                     Sufficient agreements have been reached to cover North
                     America, South America, Europe and Eastern Europe and
                     parts of Southeast Asia, Bond said. However the company
                     is still working on extending partnerships in Africa,
                     the Middle East and other areas of Asia.

                     ''The reason we have some delays, or have taken longer
                     in some areas, is because the global mobile satellite
                     service we're offering is the first of its kind out
                     there,'' Bond said, and not everyone understands what
                     exactly the company is offering.

                     Iridium will offer two kinds of service: satellite or
                     cellular. Planned satellite users will be people who
                     expect to be outside of any type of cellular coverage
                     for an extended time, such as remote mining operations,
                     and they would use a satellite-only phone.

                     The cellular service will be for global business
                     travelers, using a phone with a slot for cartridges
                     that will allow it to roam on any cellular network with
                     which it has agreements. The phone also defaults to
                     satellite mode if no such network is available.

                     Iridium places a universal translator throughout its
                     roaming networks. This allows an Iridium subscriber
                     with a CDMA (Code Division Multiple Access) home
                     network roaming on a GSM (Global System for Mobile
                     communications) network to be verified with Iridium's
                     aid. The GSM network sends a query to the roamer's home
                     network to verify the customer's right to roam there.
                     Usually, this query is not understood by the CDMA
                     network because it is in GSM language. Iridium takes
                     that query from the GSM network and translates it for
                     the CDMA network, then translates the CDMA network
                     reply into language the GSM network can understand.

                     This rather confusing system gave some potential
                     partners the wrong idea.

                     ''Some cellular operators in other countries viewed us
                     at first as a competitive threat,'' Bond said. ''It
                     took time to explain who we are and what we are.''
                     These operators had to be shown ''that through one
                     contract agreement, Iridium will provide for inbound
                     roaming onto their network from anywhere in the world
                     and outbound an unlimited extension to the rest of the
                     world ... They instantly have coverage everywhere and
                     instantly become a global competitor in one contract.''

                     The hurdles didn't end there.

                     ''Not only did we have the technical challenges of
                     building the infrastructure and marketing challenge of
                     getting distributors signed up, but we also had
                     educational challenges with governments. That's where
                     we've had some of our biggest complexities.''

                     Many were confused about how to tax and monitor a
                     service that has no physical presence within their
                     borders, essentially using a switching center in space.
                     ''We provide complete coverage in a country without any
                     infrastructure there,'' Bond said. ''They had to figure
                     out how to regulate us.''

                     Iridium also had to contend with disinformation from
                     other sources.

                     ''Let's just say it's in some companies' interest for
                     us not to be understood,'' Bond said.

                     One area of particular concern was China. For a time,
                     Iridium thought it might be prohibited from operating
                     in the world's largest wireless market. Bond said the
                     biggest challenge in China was that a competitor,
                     Globalstar L.P., had strong Chinese partners that were
                     well-connected to the Chinese government, which had
                     considered only allowing one satellite provider access
                     in the country. Iridium had to convince the government
                     otherwise, then faced a long regulatory process.

                     He said the experience in China is indicative of what
                     the company faced in each region.

                     ''As soon as we've gotten the chance to talk and get
                     through to them, we've had almost complete success,''
                     he said.

                     Finding the right marketing partners is crucial. Even
                     Iridium's most ardent supporters say the company must
                     generate a substantial number of paying subscribers
                     quickly in order to pay off the US$3.4 billion start-up
                     price tag, as well as to prepare for the network
                     upgrades expected in the next five to seven years.

                     ''They really need to get a large audience and get a
                     lot of money,'' commented Larry Swasey, analyst at
                     U.S.-based Allied Business Intelligence Inc.

                     And while Iridium has a strong global brand and
                     marketing presence in Motorola Inc., the consortium
                     leader, and recently kicked off a US$140 million
                     advertising campaign, it will rely heavily on the
                     efforts of its local service provider distribution
                     partners to acquire customers.

                     ''Anytime you do a global marketing campaign, you have
                     a very hard road ahead of you,'' Swasey said. ''It all
                     depends on your local marketers getting it to people
                     they know.''

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                     November 18, 1998
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