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Qualcomm Responds to ETSI on Third Generation Technology Issues

– August 06, 1998 – Qualcomm Incorporated (NASDAQ: QCOM) todayannounced it has submitted a letter to the European TelecommunicationsStandards Institute (ETSI) in response to ETSI's request for clarificationof Qualcomm's licensing position with respect to Qualcomm's essentialIntellectual Property Rights (IPR) for one of the proposals for ThirdGeneration (3G) digital wireless technology, Wideband CDMA (W-CDMA). Inits response dated August 5, Qualcomm stated that it is "not prepared togrant irrevocable licenses under IPRs on terms and conditions in accordancewith Clause 6.1 of the ETSI Interim IPR Policy." However, Qualcomm says itcontinues to work with ETSI and its members as well as other bodiesworldwide on convergence of cdma2000ä, proposed by Qualcomm and othermembers of the CDMA Development Group, and W-CDMA.In response to ETSI's demand that Qualcomm state unconditionally whether ornot it is willing to grant licenses for the current form of the W-CDMAproposal, Qualcomm replied that it would not agree to license its IPR forthe W-CDMA standard. Qualcomm has stated that it would license its CDMAIPR on fair, reasonable and nondiscriminatory terms only for standardsmeeting a set of technical criteria based on three fairness principles.These principles support convergence of proposed 3G CDMA technologies thathave been recently submitted to the ITU for consideration as candidates forIMT-2000. The fairness principles are:


  1. A single, converged worldwide CDMA standard should be selected for 3G;

  2. The converged CDMA standard must accommodate equally the two dominantnetwork standards in use today (IS-41 and GSM-MAP); and

  3. Disputes on specific technological points should be resolved byselecting the proposal that either is demonstrably superior in terms ofperformance, features, or cost, or, in the case of alternatives with nodemonstrable material difference, the choice that is most compatible withexisting technology.


An overview of the technical criteria for the three fairness principlesfollows.1. Converged 3G CDMA StandardA single, converged worldwide standard is the optimal solution for thesuccess of wireless communications services and products for tomorrow'sconsumer market. cdma2000 and W-CDMA both utilize a CDMA wireless airinterface. A converged standard will help ensure a fair, competitiveenvironment for operators, manufacturers and consumers in all regions. Todate, no CDMA standard has been allowed for mobile service in Europe, andmultiple new CDMA standards, if licensed, might be used to discriminateagainst some manufacturers and operators by the calculated adoption of onede facto standard to the exclusion of other nominal standards.2. Accommodation of the Dominant Network StandardsAccording to Dataquest, by the end of 1998, more than 100 millionsubscribers worldwide will be served on IS-41-based networks as well asmore than 100 million subscribers on GSM-MAP networks. The converged 3Gstandard should accommodate both networks equally, thereby leveragingexisting investments in wireless systems around the world.3. Selection of Superior CDMA 3G TechnologyQualcomm supports a converged standard that achieves demonstrableperformance, cost and feature improvements. Where uncertainties exist asto material improvements, Qualcomm advocates open and thorough testing,including capacity and quality testing. Qualcomm sees no reason to supportany standards proposal that denies operators who recognized the superiorityof the CDMA wireless air interface earlier than others a simpleevolutionary path to a powerful CDMA-based 3G solution unless thenon-evolutionary specifications of such a standard offer demonstrablematerial improvements in performance."Qualcomm remains committed to a vision of wireless telecommunications forthe next century that will fulfill the dream of high-quality globalpersonal communications for citizens of all regions," said Dr. Irwin M.Jacobs, chairman and chief executive officer of Qualcomm. "The selectionof a CDMA wireless air interface as the basis for new standards is a clearvalidation of our original vision. Now our chief concern is ensuringcontinued high-quality implementation of this technology for consumers,manufacturers, service providers and governments alike. The three fairnessprinciples provide the road map to the fair and efficient implementation ofthe IMT-2000 process."Qualcomm expressed disappointment in the process by which ETSI selected itssingle 3G standard. "To date, Qualcomm has actively participated in theETSI process, and while ETSI has had every opportunity to evaluatecdma2000, they have shown little interest in anything that differs from thesingle W-CDMA proposal," said William Bold, vice president of governmentaffairs for Qualcomm. "Serious talks are occurring around the world amongstandards bodies on the topic of converging cdma2000 and W-CDMA for 3G. Weregret that to date, ETSI has chosen not to give serious attention tocdma2000 and to convergence of the two proposals in its discussions withthese other regional standards bodies."Headquartered in San Diego, Qualcomm develops, manufactures, markets,licenses and operates advanced communications systems and products based onits proprietary digital wireless technologies. The Company's primaryproduct areas are the OmniTRACS® system (a geostationary satellite-based,mobile communications system providing two-way data and position reportingservices), CDMA wireless communications systems and products and, inconjunction with others, the development of the Globalstar™ low-earth-orbit(LEO) satellite communications system. Other Company products include theEudora Pro® electronic mail software, ASIC products, and communicationsequipment and systems for government and commercial customers worldwide.For more information on Qualcomm products and technologies, please visitthe Company's web site at http://www.qualcomm.com.Except for the historical information contained herein, this news releasecontains forward-looking statements that are subject to risks anduncertainties, including timely product development, the Company's abilityto successfully manufacture significant quantities of CDMA or otherequipment on a timely and profitable basis and those related to performanceguarantees, change in economic conditions of the various markets theCompany serves, as well as the other risks detailed from time to time inthe Company's SEC reports, including the report on Form 10-K for the yearended September 28, 1997 and most recent Form 10-Q.# # #Qualcomm, OmniTRACS, Eudora and Eudora Pro are registered trademarks ofQualcomm Incorporated. Globalstar is a trademark of Loral QualcommSatellite Services, Incorporated.