San Diego Firm Breaks In With a Mobile Phone Technology : Communications: Qualcomm says its Code Division Multiple Access, now being tested, promises to allow many more cellular users.

SAN DIEGO —  Major players in the cellular telephone industry agree that unless second-generation technology is quickly introduced, cellular phone systems in the nation’s largest metropolitan areas soon will be overwhelmed by callers who insist on traveling with mobile telephones.

Four years ago, when the cellular industry began searching for a digital technology that would replace aging analog cellular systems, most companies were inclined to support a new technology called TDMA--Time Division Multiple Access--that had been under study for several years. Initial studies suggested that there were few other technologies that would help the industry squeeze more calls into the finite number of radio frequencies.

But that unexpectedly changed about two years afterward, when San Diego-based Qualcomm surprised the industry with a competing digital technology called CDMA--Code Division Multiple Access--that had some industry heavyweights impressed. Qualcomm’s unexpected appearance sent cellular manufacturers and cellular system operators scrambling to learn about the new competitor.

The cellular industry, which is enjoying dramatic growth, does not want to pick “a technology that becomes antiquated in a few years,” said Scott Hoganson, vice president of PacTel Cellular operations in San Diego and Imperial counties. “We see this (technology) as a step into the 21st Century, as opposed to a technology that will serve just the decade of the 1990s.”

The need to increase capacity is evident in Southern California, New York City and other large metropolitan areas where existing analog-based cellular systems soon will be overwhelmed as cellular phones become more popular. Cellular systems nationwide now have 4.3 million subscribers, and an estimated 140,000 new customers sign up each month.

Consequently, cellular system operators “want the capacity issue resolved very quickly,” said Mario Salvadori, a spokesman for Motorola Inc., a leading designer and manufacturer of cellular switching systems and cellular phones. “The obvious solution” to the capacity crunch, Salvadori said, is to go digital, “but there are at this time different alternatives.” While the industry is still debating technological merits of the competing systems, Qualcomm co-founder and President Irwin Jacobs has no doubts that his company’s CDMA technology will prevail over TDMA.

TDMA, a digital technology that allows cellular systems to send tiny bits of voice data over a single channel, could accommodate at least three times the number of users as existing analog systems. With improvements, TDMA could handle about 15 times the subscribers existing analog systems handle.

CDMA, which turns digitized voices into encoded messages, has the immediate potential to handle between 10 and 20 times the number of callers as existing analog systems. With modifications, Jacobs said, CDMA could overshadow any of the increases TDMA promises down the line.

CDMA also will bring improved sound quality. Further, because the CDMA system encodes the signals before transmitting them, cellular customers would enjoy a degree of privacy unavailable through TDMA, Jacobs said. Some customers have complained that their conversations can be overheard by strangers with audio scanners that can pick up cellular signals.

Jacobs expects CDMA to gain wider exposure later this year when Qualcomm and PacTel Cellular conduct a large-scale test of the technology in San Diego County.

When the industry began its search for a successor technology four years ago, CDMA was not an option, said Norman Black, a spokesman for the Cellular Telecommunications Industry Assn., a Washington-based trade organization.

“CDMA was something faintly out there on the horizon,” Black said. “It didn’t get a great deal of scrutiny at that time because there wasn’t much to scrutinize.”

But CDMA, which has been used for decades in relatively expensive military uses, quickly became an alternative when Qualcomm made “important advances” in integrated circuit technology, Jacobs said. Consequently, although CDMA was introduced relatively late in the cellular phone game, technological advances and a small-scale test completed in 1990 have brought it up to speed with TDMA, Jacobs said.

Industry observers agree that only one of the two competing technologies is likely to survive when major cellular telephone companies begin placing orders for the technology in cellular switching stations and the phones consumers use.

“There’s ultimately going to be some kind of horse race or a selection process as the orders are placed,” Black said. There is probably not enough of a market to support two competing technologies, he said.