Dr. Martin Cooper: ArrayComm Chairman, CEO, and Co-Founder During 29 years with Motorola, Cooper built and managed both its paging and cellular businesses and served as Corporate Director of Research and Development. Under Cooper's leadership since its founding in 1992, ArrayComm, Inc. has grown from a seed-funded startup in San Jose, Calif., into the world leader in smart antenna technology.

I had occasion, on my first visit [to China], to speak to a high-level government official who asked me "What is 3G?" I started to explain the nature of wide band CDMA and the importance of packet switching for data transmission. He smiled at me politely and asked again, "Mr. Cooper, what is 3G?" I was about to launch into a description of the value of combining both voice and data in a single wireless network when I finally realized that the official was asking me a very different question. He was asking the only important question. He really wanted to know what new benefits to people could 3G deliver that previous system could not deliver.

And that is the theme of my remarks today. I want to presume to discuss how China can continue to manage its wireless affairs in ways that avoid the mistakes, the excesses, and the misdirection that has plunged the telecommunications industry of the west into the deepest depression it ever experienced.

We're all anxiously awaiting the "recovery" from this depression. I suggest there will not, over the long term, be a recovery for most of the industry. Rather, there will be rebirth, a new industry rising above the residue of the meltdown because the telecommunications industry is finally, after 120 years, started to grow up, it is starting to escape from the burden of its monopoly heritage. And it is during this disruptive rebirth, which will take ten years or longer, that Chinese industry has an opportunity to leapfrog the western world in wireless communications.

In the short term, we will appear to recover from this depression, but that will only be an illusion of recovery. The real recovery, the rebirth, will be fundamental changes in our industry. Our industry will change because it has to change. China has already started that change.

Did you know that China, today, has widespread deployment of the most advanced wireless data system in the world? Further, China has greater deployment of the most advanced adaptive array processing technology than any country in the world. I'm referring, in both cases to the widespread deployment of PHS in China. Despite its low profile, PHS is serving many millions of Chinese with high quality voice and 64 kbps data rates at very low cost with a wide number of data applications including cameras, PDA's, modems and other useful tools. And over 65,000 PHS base stations equipped with adaptive array processing that allows each station to serve over 100 subscribers at low cost over wider areas than possible without this technology. While the hype of 3G goes on, Chinese industry quietly does more with PHS than others are doing with 3G.

3G is the culmination of an era of hype that started with the interface wars of the 1990's. You remember the endless, and pointless, arguments about CDM versus TDMA; about GSM versus narrowband CDMA. The result of all that is coexisting standards that each serves its subscribers reasonably well, with little discernable difference in performance. But the primary application of these systems is voice, and we know that data is bound to be a valuable tool of the future.

But data to do what? Let us examine the 3G hype, which many believed until recently, and some still do despite the fact that the engineering and economic facts have been evident for years:

The hype was a huge increase in capacity and data speed of 2 Mbps.

The reality: A slight increase in capacity (since we have already extracted most of the capacity capability out of air-interface technology) and 64 kbps practical data speed.

The hype was wireless delivery of multimedia.

The reality: We're still trying to figure out practical applications for 3G, but multimedia, as we presently understand it, is not economic or technically viable.

The hype was delivery of the Internet on the move to everybody.

The reality: The Internet has the potential to make practical a host of new applications that improve productivity, convenience, safety, entertain and educate -- but do you really believe this can happen through a 4 centimeter window at 64 kbps on a device designed for voice over a system that was also designed for voice? Not a chance.

3G will happen! But it will serve those specific markets and applications that are affordable and practical with 3G. Voice will continue to be major factor. But there will be a new class of systems that are optimized for Internet delivery unburdened by the need for "universality" that can add so much complexity and cost to 3G. 3G will happen when the focus returns to the customer, where it is in every other industry, not burdened by the monopoly heritage of telecommunications industry. 3G will happen when 3G equipment embraces new technology that drives capacity and performance to much higher levels than 2G or 2.5G -- technology that exists today, as exemplified by the PHS deployment in China, but hasn't yet become a part of the 3G story.

Should China adopt 3G? The answer is "of course!" But it has to be a 3G that brings value to the consumer, not just another "technology for the sake of technology." The 3G that succeeds will be one that delivers voice and data more effectively, by a wide margin, than today's systems. The successful 3G will come packaged with applications that do useful things for people and that people can afford. The successful 3G will use advanced technology like adaptive array processing and superconducting filters and ultra linear amplifiers so that its inherent cost is lower than today's systems, because it will serve more subscribers with fewer base stations and fewer sites and less backhaul.

What are the applications for the other systems I've spoken of? The next killer application is not an application at all. It is the Internet. China Internet Network Information Center (CNNIC) reports that, at the end of last year, there were 33.7 million Internet users in China, up 49.8 percent over the year before. China has 12.54 million computers linked to the Internet, an increase of 40.6 percent over the same period in 2000 and there are already 277,100 worldwide web sites here. Chinese Web surfers spend 8.3 hours on the Internet every week on average, not unlike surfers in the rest of the world. At these growth rates, the Internet will soon be an important influence on the Chinese people.

But the Internet of the future will grow to be much more than that. The Internet of the future is a host of applications that are delivered to people at prices they can afford. The Internet is thirsty young minds flipping through web pages as fast as they can absorb while sitting on the porch with the family or in the park or waiting in the interminable lines that plague us lately. The Internet is an elderly person, or a heart patient, or maybe just anyone, conducting a visit to the doctor electronically, not when they can get an appointment but when they're sick, facilitated by already existing devices that read all a person's vital signs and deliver them to the doctor instantly and allow her, or him, to prescribe to a patient that can see the doctor's face as he or she prescribes.

The Internet is music delivery (forget about CD's) and picture taking (forget about film or digital computers) and game playing and shopping and a hundred other applications all done with whatever speed is needed and with the freedom -- freedom -- to move. And an Internet that can adapt to such a wide variety of applications can, with the flip of a software switch, be dedicated to emergency services in the event of a catastrophe.

This vision of a mobile world can't be achieved using technology that's now deployed. Existing systems are very effective at delivering voice and low rate data. They are suitable for high mobility -- driving in cars at 65 mph, for example. But they just cost too much to compete with cable and DSL. And yet wireless systems and technology that have the capability to deliver very low cost high-speed data exist today and they will be deployed if spectrum can be made available for them.

There's the catch! If there's freedom to move, the Internet of the future must be wireless and if it's wireless it needs spectrum and that is why new technology and new systems are so important to this future. So here is my impertinent advice to those who influence the future of wireless in China: