Qualcomm Responds to ETSI on Third Generation Technology Issues

SAN DIEGO – August 06, 1998 – Qualcomm Incorporated (NASDAQ: QCOM) today announced it has submitted a letter to the European Telecommunications Standards Institute (ETSI) in response to ETSI's request for clarification of Qualcomm's licensing position with respect to Qualcomm's essential Intellectual Property Rights (IPR) for one of the proposals for Third Generation (3G) digital wireless technology, Wideband CDMA (W-CDMA).

In its response dated August 5, Qualcomm stated that it is "not prepared to grant irrevocable licenses under IPRs on terms and conditions in accordance with Clause 6.1 of the ETSI Interim IPR Policy." However, Qualcomm says it continues to work with ETSI and its members as well as other bodies worldwide on convergence of cdma2000, proposed by Qualcomm and other members of the CDMA Development Group, and W-CDMA.

In response to ETSI's demand that Qualcomm state unconditionally whether or not it is willing to grant licenses for the current form of the W-CDMA proposal, Qualcomm replied that it would not agree to license its IPR for the W-CDMA standard. Qualcomm has stated that it would license its CDMA IPR on fair, reasonable and nondiscriminatory terms only for standards meeting a set of technical criteria based on three fairness principles. These principles support convergence of proposed 3G CDMA technologies that have been recently submitted to the ITU for consideration as candidates for IMT-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 dominant network standards in use today (IS-41 and GSM-MAP); and
  3. Disputes on specific technological points should be resolved by selecting the proposal that either is demonstrably superior in terms of performance, features, or cost, or, in the case of alternatives with no demonstrable material difference, the choice that is most compatible with existing technology.
An overview of the technical criteria for the three fairness principles follows.

1. Converged 3G CDMA Standard

A single, converged worldwide standard is the optimal solution for the success of wireless communications services and products for tomorrow's consumer market. cdma2000 and W-CDMA both utilize a CDMA wireless air interface. A converged standard will help ensure a fair, competitive environment for operators, manufacturers and consumers in all regions. To date, no CDMA standard has been allowed for mobile service in Europe, and multiple new CDMA standards, if licensed, might be used to discriminate against some manufacturers and operators by the calculated adoption of one de facto standard to the exclusion of other nominal standards.

2. Accommodation of the Dominant Network Standards

According to Dataquest, by the end of 1998, more than 100 million subscribers worldwide will be served on IS-41-based networks as well as more than 100 million subscribers on GSM-MAP networks. The converged 3G standard should accommodate both networks equally, there by leveraging existing investments in wireless systems around the world.

3. Selection of Superior CDMA 3G Technology

Qualcomm supports a converged standard that achieves demonstrable performance, cost and feature improvements. Where uncertainties exist as to material improvements, Qualcomm advocates open and thorough testing, including capacity and quality testing. Qualcomm sees no reason to support any standards proposal that denies operators who recognized the superiority of the CDMA wireless air interface earlier than others a simple evolutionary path to a powerful CDMA-based 3G solution unless the non-evolutionary specifications of such a standard offer demonstrable material improvements in performance.

"Qualcomm remains committed to a vision of wireless telecommunications for the next century that will fulfill the dream of high-quality global personal communications for citizens of all regions," said Dr. Irwin M. Jacobs, chairman and chief executive officer of Qualcomm. "The selection of a CDMA wireless air interface as the basis for new standards is a clear validation of our original vision. Now our chief concern is ensuring continued high-quality implementation of this technology for consumers, manufacturers, service providers and governments alike. The three fairness principles provide the road map to the fair and efficient implementation of the IMT-2000 process."

Qualcomm expressed disappointment in the process by which ETSI selected its single 3G standard.

"To date, Qualcomm has actively participated in the ETSI process, and while ETSI has had every opportunity to evaluate cdma2000, they have shown little interest in anything that differs from the single W-CDMA proposal," said William Bold, vice president of government affairs for Qualcomm. "Serious talks are occurring around the world among standards bodies on the topic of converging cdma2000 and W-CDMA for 3G. We regret that to date, ETSI has chosen not to give serious attention tocdma2000 and to convergence of the two proposals in its discussions with these other regional standards bodies."

Headquartered in San Diego, Qualcomm develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACS® system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, in conjunction with others, the development of the Globalstar™ low-earth-orbit (LEO) satellite communications system. Other Company products include the Eudora Pro® electronic mail software, ASIC products, and communications equipment and systems for government and commercial customers worldwide.

For more information on Qualcomm products and technologies, please visit the Company's web site at http://www.qualcomm.com.

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis and those related to performance guarantees, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 28, 1997 and most recent Form 10-Q.# # #Qualcomm, OmniTRACS, Eudora and Eudora Pro are registered trademarks of Qualcomm Incorporated. Globalstar is a trademark of Loral Qualcomm Satellite Services, Incorporated.