Wideband CDMA and cdma2000 are not only migrating to the future, but also to the battleground.
Both technologies will hoist their banners as they deploy their strengths and shield their weaknesses, especially in the two main places where they hope to flex muscles for market share: The United States and Japan.
Beginning in the second half of the year, the technology war bugle is expected to sound and cdma2000 1x will slug it out with the first phase of W-CDMA-GSM/GPRS/EDGE in the United States and W-CDMA in Japan.
Cdma2000 technology will evolve from 1xRTT to 1xEV to 1xEV-DO-which is for data only-and eventually to 1xEV-DV, which supports data and voice. The next path is expected to be 3xRTT. Both technologies are scheduled to migrate to this path within the next three to six years.
That will herald the beginning of the end of all the tides of speculation, fear and optimism surrounding both technologies.
In Japan, it will be NTT DoCoMo, the W-CDMA champion, against KDDI, which will hold the fort for the opposing technology. The battle is unequal. NTT DoCoMo has 67 percent of the market share, compared with KDDI’s 17 percent.
But, according to Elizabeth Harr-Bricksin, senior analyst with the Strategis Group, KDDI has an opportunity to lift itself up from an underdog status. “KDDI has an opportunity to push itself with 1x 3G with its voice-capacity increase of 1.8 times which has been tested. The speed is about 144 Kbps,” she said.
But she cautions that it will be an uphill task because NTT, which operates a technology called PDC similar to GSM, already thinks it is ready for 3G and has the majority of the market in its hands.
Harr-Bricksin notes KDDI can cash in on the economics of migration because it will cost it 40 percent less to move to 1x than for NTT DoCoMo to move to W-CDMA.
She said both players have yet to resolve handset issues. Of the five manufacturers, only Matsushita and NEC seem to be ready with handsets, and some of the phones had to be recalled in January.
NTT DoCoMo also had spectrum problems, although that issue has quieted down.
NTT DoCoMo might benefit from global roaming and economies of scale because the W-CDMA protocol promises to be a more pervasive technology, covering Europe, Asia and a huge chunk of the Americas.
Roaming on cdma2000 networks may be more limited because it isn’t expected to be so widely deployed.
But Paul Jacobs, executive vice president of Qualcomm Inc., argues because of the efficiency and data capacity cdma2000 provides, quality may trump the market in KDDI’s favor, hinting any bumbling on the path to W-CDMA may trigger impatience among end users and create a momentum shift in the market.
Cdma2000 supporters insist their technology provides a greater data rate and smoother migration than their counterpart. Qualcomm also has emphasized that cdma2000 1x does not require the same huge expense and elaborate engineering effort to install as W-CDMA requires.
In the United States there are different concerns.
“Although the CDMA 1x technologies boast the best data rates plus the optimum uses of spectrum and network capacity, the economies of scale, first-to-market advantage of devices and global reach advantages of the GSM-to-W-CDMA approach has made it a compelling choice for several major U.S. operators,” noted Strategis Group senior analyst Adam Guy in a recent study previewing the U.S. market titled “Next Generation Services: Trends and Outlook.”
TDMA technology supporters, including Cingular and AT&T Wireless Services Inc., and Voice-Stream Wireless Corp. will brandish the W-CDMA battle flag. Verizon Wireless and Sprint PCS, at once technology cousins and rivals, Nextel Communications Inc. and Alltel Corp. will charge forth in the name of cdma2000.
Analyst Andrew Seybold thinks CDMA technology is more efficient.
“Three of the top five carriers in the U.S. are CDMA,” stressing that the future of W-CDMA is uncertain, an echo of some of the concerns of critics.
Guy stressed in his study the migration to 3G is not necessarily about network speed that powers data growth, but “nationwide ubiquitous availability as well as compelling applications that are priced competitively.”
However, Guy noted cdma2000 1x may outplay its GPRS counterpart in voice capacity and faster handset data speeds to the end user. It also is less riddled with handset problems such as those GPRS has, including shorter battery life and heating.
Seybold thinks that, with the early deployment of the cdma2000 technology, W-CDMA may lose market share before it gets its act together.
AT&T has dedicated itself to the W-CDMA path, and it announced its first step toward that with its intention to overlay its TDMA networks with GSM, which is the dominant technology in Europe. It also has pledged to gravitate to EDGE, which is a data-specific technology as the transition pedal to W-CDMA. The Strategis Group said AT&T Wireless’ deployment of the new technologies will depend on the FCC’s resolution of spectrum availability issues. U.S. operators are seeking more spectrum.
“In markets where it has an additional 10 megahertz of spectrum,” said the Strategis Group report, “AT&T will deploy W-CDMA. In other markets, AT&T may deploy EDGE,” which may not happen until between 2003-2004.
Cingular Wireless, resulting from the marriage between BellSouth Mobility and SBC Wireless, has both GSM and TDMA markets scattered across the United States. California, Nevada and the Carolinas house its GSM properties, where its expects to deploy its GPRS networks. Its TDMA strongholds are Dallas, Chicago and Boston, which the company intends to move up to EDGE.
GSM-based VoiceStream will move to GPRS and later to EDGE.
Sprint PCS says it will be ready for cdma2000 1x in the second half of this year and its speed will grow to 307 Kbps by the second half of 2002. It plans to deploy 1xEV with up to 2.4 Mbps by 2003. The company will spend between $700 million and $800 million for its next-generation deployments, according to the report.
Verizon Wireless, which announced a huge infrastructure deal with Lucent Technologies Inc. to the tune of $5 billion in March and also has spent $8.8 billion for additional PCS spectrum, will execute a migration schedule like its rival Sprint PCS.
Alltel has signed a cdma2000 1x contract with Motorola Inc. to install networks in Tampa, Cleveland, Phoenix, New Orleans, Baton Rouge and Charlotte in the second half of this year.
