Nokia faces massive cell phone recall

Nokia Corp. may have to recall millions of cell phones due to a software glitch that renders them inoperable with the third-generation (3G) networks that major U.S. carriers plan to start using this year.

Nokia maintains that it can resolve the problem with a software patch in the network infrastructure, which would avoid a recall. But major carriers and an industry working group want to carefully evaluate the fix to ensure that it doesn’t delay the network rollout or generate other compatibility problems.

Espoo, Finland-based Nokia said the problem, which it discovered last week, stems from the approach it took in developing its second-generation (2G) phones operating on the Code Division Multiple Access (CDMA) protocol. That approach makes them inoperable with the 3G networks, which carriers such as Sprint PCS Group in Kansas City, Mo., and Verizon Wireless Inc. plan to start deploying this year.

Ed Chao, senior manager in the wireless networks group at Murray Hill, N.J.-based Lucent Technologies Inc., said Nokia’s problem is the result of a “software shortcut” the company took with the 2G CDMA standard. According to Chao, if Nokia had followed the 2G CDMA specifications, the older phones should have been able to access the new 3G networks for voice calls and data transfer at lower speeds. As it is, Nokia’s older phones can’t access 3G networks at all.

Megan Matthews, a spokeswoman for Nokia, acknowledged that due to the company’s “interpretation” of the older 2G CDMA standard, its phones can’t tap into the synchronization channel of the 3G CDMA networks, making it impossible for them to grab a signal. “The phones keep spinning but just won’t register with the network,” she said.

Matthews said Nokia is working with wireless network systems manufacturers, including Lucent, to develop a software patch that can be loaded into base stations, allowing its older Model 2100, 5100 and 6100 phones to tap into the 3G networks. “We believe a software-based solution is best for the industry,” she said. “It would eliminate the recall of millions of phones.”

An official at one carrier, who declined to be identified, doesn’t accept Nokia’s argument, however.

“It’s their problem, and since we have a quarter-million of their phones in a warehouse, we think they should take them back and put in a new chip set. We don’t want to sell these phones to our customers,” the official said.

Andrea Linsky, a spokeswoman for Verizon Wireless in Bedminster, N.J., said her company “is working with Nokia to make sure customers’ handsets can evolve” to the new 3G standards. She declined to say whether Verizon would accept a software patch in lieu of a wholesale handset replacement.

Perry LaForge, executive director of the CDMA Development Group in Costa Mesa, Calif., said it will take the CDMA industry, including carriers, network systems providers and Nokia, at least 30 days to determine whether to resolve the issue with a handset replacement or a software fix to wireless base stations.

“[But] we don’t want any delay in the rollout of 3G,” LaForge said. “There is a tremendous amount of momentum to deploy this year, and we don’t want any delay.” He said a software patch “would benefit Nokia the most, but we have to be prudent and test the software [to ensure] there are no downstream ramifications.”

Chao said Lucent believes it has developed a software base-station patch for Nokia phones that stays within the CDMA standards, won’t cost carrier customers much and can be rolled out quickly. But Lucent still needs to conduct tests of its fix, he added.

Bob Egan, an analyst at Gartner Inc. in Stamford, Conn., said Nokia’s problems with CDMA aren’t new. “Nokia has no clue on how to build network equipment or handsets for CDMA,” he said. “They have failed miserably in the past, and this latest round is yet more evidence of their ineptness in realms beyond [Global System for Mobile Communications, the European standard].”