Another interesting question concerned the 450 MHz band and its future use. The old analog NMT network was still flourishing on this band in Sweden, used mainly in the sparsely populated areas in the north out of reach for GSM or 3G signals.

But what would become of it in the long run? The 450 MHz band was well suited to mobile networks. For instance, the low frequency meant that only 350 base stations were needed to cover more or less the whole of Sweden, compared with the 7,500 base stations that operator 3 needed to offer 50 percent coverage with its 3G network in the 2 GHz band.

A power play emerged. The GSM world had never evolved its technology for 450 MHz, which gave Qualcomm the chance to snap up the frequency bands with an adaptation of its CDMA2000 technology. In 2003, several such 450 MHz networks were in commercial operation around the world, although not with mobiles that could switch between CDMA and GSM.

Bo Magnusson, former head of marketing for Telia Radio, describes how he was contacted in 2002 by an entrepreneur who wanted to set up a new Nordic operator for a digital 450 MHz network. After making his own calculations, Magnusson declined to participate.

Phasing out the old NMT network started in Sweden when the telecom authority, the PTS, decided in early 2004 that TeliaSonera’s license for traffic in the 450 MHz range would expire at the end of 2007. Shortly afterwards the frequency range available for NMT was restricted, and in February 2005 the freed-up frequencies were auctioned off.

Bids were made by five companies and the winner was the Swedish-Norwegian company Nordisk Mobiltelefon AS with a bid of SEK 86 million. One of the conditions laid down in the permit was that by July 1, 2007, its network had to cover 80 percent of the area within each county in Sweden.

“DROPPED LIKE A BOMB”

The news about Nordisk Mobiltelefon’s license “dropped like a bomb”; media reports said the “3G operators were loud in their complaints about this new competition”. The operators were of course not at all keen on a competing “rural 3G” network with a low-tariff profile based on a more advantageous frequency band than the one they had.

One of the stakeholders in Nordisk Mobiltelefon was Jan Freese, a former director-general of the Swedish PTS. In the media he stated that the founder and CEO of the company was Arnfinn Röste, in the 1980s a successful salesman for ERA in Southeast Asia. Freese said the owners were “a good team, and most people in the company had a background in Ericsson”.

The idea now, just as in the infancy of NMT, was to operate on a Nordic basis. Nordisk Mobiltelefon had already got hold of the digital 450 MHz license in Norway and signed an agreement with a company owned by Telenor on cooperation on masts. In Sweden it intended to use Teracom’s masts. Now it was waiting for Finland’s decision on the corresponding license. And Freese had hopes for Denmark and Iceland as well: “They have large fishing fleets so this should interest them too.”

There were CDMA 450 MHz networks in just over 20 countries in early 2005, among them China, Russia and Brazil, but there were no dual-mode telephones that worked in both CDMA and GSM networks. Freese said: “The chips are available. One possibility is to have two phones with the same number, a CDMA 450 and a GSM or 3G phone.

In Finland, the digital 450 MHz band was allocated on the basis of a “beauty contest” in April 2005. The winner was a Franco-British company called Digita that presented a plan for a network based on Flash OFDM. Nordisk Mobiltelefon appealed against the decision without success and was forced to give up its plan for a pan-Nordic network. Digita’s Finnish 450 MHz network was launched in April 2007.

Ericsson joined the CDMA 450 battle at the start of 2004. When Nordisk Mobiltelefon trialed different vendors’ equipment at the end of the year, Ericsson described its CDMA version as a “real 3G platform”, and the media found that speeds in the CDMA 450 networks were better than in the existing 3G networks in town.

Author: Svenolof Karlsson & Anders Lugn

© Telefonaktiebolaget LM Ericsson and Centre for Business History

Contact info/About the site