Finland to select US wireless network

Finland will select a new wireless network technology from the US next week in a move being watched by other European governments that are opening radio spectrum for mobile broadband.

Finland was the place where the European-invented global system for mobile communications (GSM) first went on the air in 1991, setting off a revolution in mobile communications. But this time around there is no European technology alternative.

Seven consortiums have put in bids for the 450 megahertz (MHz) radio spectrum that was left unused after operator Sonera shut down an analogue mobile network in 2002, and all seven have proposed US wireless technology to cover even remote areas with fast web access.

Two groups propose to use the CDMA (code division multiple access) technology that is already used for mobile networks in the Americas and parts of Asia, while five others have announced they would use the new and partly unproven Flash-OFDM technology from unlisted Flarion.

If Finland opts for CDMA, this would create a stronghold for the technology as neighbouring Sweden and Norway have in the past year issued 450 MHz licences to Nordisk Mobiltelefon which uses CDMA.

Austria, Ireland, Britain and France will also award 450 MHz licences in the near future. Germany has already awarded two licences but has yet to decide on the technology it will use.

"CDMA is the dark horse in Europe," said Copenhagen-based consultant John Strand. "But there are two things that are very important for new mobile phone networks: interoperability and who has the cheapest handsets and the most choice, and CDMA will lose that battle against current 3G in Europe," Strand added.

In Brazil, CDMA has lost market share against GSM for the last three years because customers can get cheaper handsets and have more choice with the latter technology, Strand said.

This is not a concern for Flash-OFDM, as it does not compete for mobile callers. CDMA technology was invented by San Diego-based Qualcomm and the company delivers virtually all of the chips needed in CDMA networks and mobile phones used by some 500 million consumers.

Flash-OFDM is used for fast internet access on computers, and is only now getting out of the test phase. A win in Finland could set Flarion up for life. It is hoping that its rival's CDMA technology will lose out because it is not a dedicated wireless internet technology.