Negroponte slams overspending on 3G


26 Sep 2003

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MIT chairman Nicholas Negroponte claimed yesterday that Europe had squandered its initial leadership in the wireless world through the success of GSM technology by over-investing in the move towards 3G.

Negroponte is chairman of the Massachusetts Institute of Technology (MIT), parent of Media Lab Europe in Dublin. The author of Being Digital, which has been translated into 40 languages, and a columnist with Wired magazine, Negroponte has invested in more than 50 young technology companies throughout the world and is highly regarded in the IT sector.

With two homes in Europe, Negroponte is a regular visitor to these shores. Describing the global telecommunications market as being on the “cusp of change”, Negroponte said that media analysis of the industry has been too focused on the ups and downs of the sector and less on the innovation being achieved. For this, he said, the industry, particuarly in Europe, has itself to blame.

“We are on the cusp of a much more fundamental and intellectual change in the telecommunications world. Technology is maturing and wireless communications is spreading fast. However, the European telecommunications industry faces a major dilemma.

“The industry has been consumed by deregulation and the high cost of telecommunications, while at the same time wireless was emerging as a viable technology. The European telecom industry’s initial success saw it rally wholeheartedly behind GSM (global system for mobile communications) and made it a world-beating technology. This saw the rise of a pan-European voice-based society and then a data-based society with the rise of GSM.

“However, in America, which has been criticised for having too many disparate networks and standards, there was chaos. However, out of that chaos came CDMA (code division multiple access) technology and that will be the basis for all future systems throughout the world. In the US we are thankful for that chaos.”

CDMA is less costly to implement, he argued, as it requires fewer cell sites than the GSM and TDMA (time division multiple access) digital cellphone systems and providing three to five times the calling capacity. It provides more than 10 times the capacity of the analogue cellular phone system (AMPS). CDMA has become widely used in North America and Asia and is also expected to become the third-generation (3G) technology for GSM.

“The tragedy for Europe is that after the initial success of GSM, the networks and the manufacturers decided let’s have that party all over again and push for 3G. The result was that it was too little too soon,” Negroponte said. For the European telecom firms and manufacturers it was up to €180bn worth of over investment in 3G licences, resulting in encouraging the downward spiral of the telecoms industry in Europe.

In an interview with siliconrepublic.com, Negroponte said that the problem is “fixable by moving beyond 3G as fast as possible”.

By John Kennedy