Andrew Baxter talks to Bjorn Krylander of UbiNetics
First, the good news: the head of one of the best-known producers of software and test equipment for Wireless - CDMA 3G networks and handsets says there is little or no risk of a fundamental flaw wreaking havoc with operators' plans. "Most of the tests have been done - it's going to happen," says Bjorn Krylander, chief executive of Cambridge-based UbiNetics.
Now the bad news, or at least a dose of reality from the sharp end of W-CDMA (or UMTS), which is the standard being adopted across Europe, and in many countries elsewhere in the world. There are still technical problems to resolve, says Mr Krylander - indeed the overall specification for the 3G system (known as 3GPP) has not yet been set in stone. "The technology is massively complex," he says.
He points out that 3G networks will have to operate under so many different local conditions and topographies - in Tokyo, for example, the extra steel in buildings, needed because of the earthquake risk, require different network planning to most other places. But he draws comfort from the fact that a multiplicity of issues, rather than a single big one, remain to be resolved.
Mr Krylander is in a good position to comment on the technical hurdles remaining for 3G. Steeped in the technology of mobile telephony, he joined fast-growing UbiNetics in January last year after 12 years at Ericsson, the Swedish telecoms equipment group. Equipment produced by UbiNetics tests what he calls "the boring stuff" - the basic software protocols that control the handset's relationship with the base station and the network infrastructure. The company also provides key elements of this software.
This autumn, he says, many network operators will be unveiling small networks based on 20, 40, or 50 base stations, to show that the technology works and to build confidence among investors. But they will struggle to get all the technical issues resolved until the second half of next year - the first point when Mr Krylander would consider buying a 3G phone himself.
One of the main problems, as he sees it, is "handover" as the subscriber moves from one cell to another. So-called "soft handover" - switching to the same frequency or network - has been achieved, but "hard handover," from one UMTS frequency to another, remains poorly tested, if at all, although UbiNetics will be unveiling a solution imminently.
Furthermore "hard handover" will be a prerequisite for switching from UMTS to GSM, which will be vital as a default because of 3G's patchy initial deployment.
This kind of handover will be even more difficult to achieve, and Mr Krylander does not foresee an automatic solution being tested and rolled out this year.
Even by later next year, he points out, 3G will have parallels with GPRS today - it will work only in a limited area - and that will not necessarily be where it is most needed. "When I am in the UK, in my office or in London, I will have alternative methods of logging on. When I'm in Bangalore (the Indian IT hub where UbiNetics has been expanding fast in the past year) I would not have access to 3G," he says.
By 2004, however, Mr Krylander says a second generation of 3G handsets will have been introduced, with all the software architecture and chipset design issues resolved, leading to improved performance and a nicer appearance. The handsets will still be bigger than current 2G handsets, he notes, but subscribers will not mind because they will see the value of the additional services they can access.
Also, coverage will improve and networks will get bigger, he says. As a result, Christmas 2004 could be a busy time for mobile phone operators and retailers, but sales could really take off by Christmas 2005, he believes.
The 360 employees at UbiNetics, founded in 1999 and majority-owned by PA Consulting Group, the UK-based management and technology consultancy, will be hoping Mr Krylander's predictions are fulfilled on time, because the company is virtually betting its future on 3G. The mainstay of its revenues has been its TM100 Test Mobile, a laboratory device that simulates the basics of a 3G telephone. In the third quarter of this year it hopes to release the TM 200, a portable device that will be used for field-testing real 3G networks and handsets.
Mr Krylander says each operator will need at least 50 of these units, which will cost about Pounds 20,000 apiece, and hopes to sell 4,000 in Europe alone over the next two years.
UbiNetics also has in the works a 3G module, essentially a package of hardware and software that can be dropped into handsets and terminals to provide all the basic functionality.
To fund continuing expansion, Mr Krylander's ambition is for UbiNetics to go public through an initial public offering next year, as he does not want to cede control to any of UbiNetics' powerful customers and create conflicts of interest.
Turning a profit this year for the first time, as Mr Krylander hopes, would help pave the way for an IPO, but sentiment towards 3G will be crucial to his plans. "If everyone hates 3G, it will be tough," he admits. "A more neutral attitude will help."
