The end result being that CDMA2000 operators would have a superior cost structure versus the competition and thus be more profitable and competitive. In fact, Slacker last winter argued that one of the largest CDMA-centric carriers in the U.S.--Sprint--would evince its superior cost structure this year by undercutting the competition in price, taking market share from rivals and maintaining or increasing its level of profitability.
I dont remember the particulars but it definitely sounds like something I would say.
I have listened to just about every wireless operators conference call for the most recent quarter....and one of the dominant trends for each of these operators, has been an absolute explosion in minutes of use per month. We are talking about staggering rates of growth across the board. I didnt take notes on all of the numbers but 10% sequential and 40% YoY growth in minutes of use per customer sound about right. When you add in the rates of growth in the total number of customers....these operators are using at least 50% more minutes on their network than they were using a year ago. Here are some of the numbers....
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According the article I just posted, however, it appears that the number of points-of-presence of base stations in the field is still crucial to the end user experience, notwithstanding how efficient CDMA2000 infrastructure may or may not be in real world conditions compared with WCDMA infrastructure.
You are absolutely right that the coverage for 1x is going to be a critical factor in it's success. PCS has announced that they are spending $800m for their 1x upgrade....which will be completed by mid-2002. I dont know if they are going to be upgrading every single channel of IS-95 that has been deployed or if they are going to be adding a single 1x channel on top of the existing spectrum allocation. Obviously, these decisions will be impact the user experience. However, in light of the trends in MOU's, I believe that it is clear which operators are going to have an advantage when it comes to 2.5G. Remember....PCS isnt going to be competing against W-CDMA for years to come, but rather GPRS. T/Cingular are going to be juggling spectrum over the next couple of years. If they devote to much spectrum to GSM/GPRS, they will alienate their old subs....too much to TDMA, and they will have a tough time rolling out data services to their new subs. I still believe that the capacity advantage that CDMA operators are going to see with 1x (upto 2 times) is going to impact results in the next 18 months or so. JMO....but T/Cingular better roll-out some compelling content/handsets to combat this trend. T is going to need i-mode to duplicate it's success in Japan.
FWIW...PCS absolutlely destroyed every operating metric by which you can measure an operator during the second quarter. Churn was down....ARPU, customer adds, and most important EBITDA were up.
Slacker |
