Newsflash—third-generation networks are not dead and they are not obsolete. Just because Sprint Nextel Corp. is building a WiMAX network doesn’t mean 3G network investment will dwindle immediately.
The feeling among the GSM family of network technologies is that HSDPA can handle the demands of voice, data and multimedia just fine, thanks. And when it comes to investing in network infrastructure, Chris Pearson, president of 3G Americas, insisted that carriers crave technology that comes with a clear evolution path and an established vendor ecosystem.
“Carriers tend to choose technology that they think provides them with the best opportunity to compete,” said Pearson. “They want a future-proof migration strategy for their investment.”
Pearson also pointed out that other than Sprint Nextel, carriers don’t want to build something and hope that users will come.
“If you look at mobile WiMAX, it’s not clear whether it’s needed or not—it’s a big question mark. We risk fragmenting the marketplace.”
GSM operators increasingly are looking to HSDPA to supply their subscribers with multimedia content and data. Ovum predicts that HSDPA connections will increase substantially in 2008, reaching 16.5 million users in Western Europe after growing from a small base of 500,000 subscribers at the end 2006, as UMTS operators throughout the region start migrating to higher-speed technology.
“2008 will be the year when the HSDPA market truly takes off,” says Julien Grivolas, wireless technology analyst with Ovum. “This is when HSDPA mobile-phone handsets become widely available to the public, more affordable, and therefore reach the mass market.
“Until that point, HSDPA will remain a data card market for enterprises. In the initial stages, operators will focus their launches on business use through laptops via data cards.”
By the end of this year, the firm estimates that Western Europe will see 635,000 HSDPA connections, and by the end of the decade, the number will climb to 50 million.
Ovum attributes the fast development of HSDPA to its low cost and relative ease of implementation.
“Rolling out HSDPA only requires a software upgrade of the existing UMTS radio network infrastructure and re-uses UMTS spectrum,” noted Grivolas. “It allows mobile operators to leverage their UMTS investments used for 3G, a strong plus point. By 2008, it’s very likely that most UMTS operators throughout the world will have deployed it.”
What’s more, Ovum believes that since HSDPA delivers the benefits of 3G, its fast development will impact the success of alternative broadband wireless technologies such as mobile WiMAX.
“In areas where HSDPA becomes widely available, like Western Europe, and where well-suited spectrum for (802.16e) is rare, the window of opportunity for mobile WiMAX will be quite limited.”
In the United States, HSDPA is being deployed mostly in 3G markets where there is intense competition with rival technology CDMA2000 1x EV-DO. But Ovum said the technology is also gaining attention from operators in less-developed countries, such as South Africa, due to the technology’s small incremental cost of deployment.
Pearson commented that in emerging markets operator’s choices come down to big-bang for little-bucks.
“Sure, carriers in emerging markets want the best technology they can get at extremely low price points, but they are also interested in economies of scale. They look closely at technical merits as well as economic merits.”
