Wireless Watch On Being Gildered
The financial community was misled when a pundit forgot the difference between an air interface and a standard
By Grahame Lynch
New-technology seer George Gilder is known for his endorsements of companies he believes are disrupting the telecom market for the better. It?s not often that he devotes his prose to outright denigration. So Wall Street Journal readers were surprised on May 1 when they found
that a main article by Gilder and a co-author trashed AT&T Wireless? use of Time Division Multiple Access (TDMA) as its network platform.
Perhaps Gilder?s tendency to hyperbole means that when he releases the bile, it comes on really thick and heavy. He described AT&T Wireless as a "low-tech wasteland," adding
that TDMA was "essentially worthless." He added that TDMA?s evolutionary path to the 384 kbps EDGE standard was nothing more than a "bit of current vaporware" and that its data speed was "paltry" compared to the CDMA higher data rate standard which he claims can support speeds "six times as fast."
Gilder recommended that AT&T should trash its TDMA network in favor of CDMA and even inferred that failure to adopt his course of action could leave the entire US economy
behind the rest of the world. Whew!
Too Emotional Over CDMA
Gilder is not the first person to get emotional over CDMA or to infer that use of TDMA is tantamount to treason. But he needs to get his facts straight before taking on AT&T
Wireless.
Virtually all the promised data-centric abilities of cellular are, indeed, vaporware.
EDGE isn?t scheduled to be released until 2001; according to the CDMA Development Group, the CDMA 1X upgrade supporting speeds of 144 kbps (half that of EDGE) won?t be
out until the end of this year. The fastest CDMA speeds to date range up to 64 kbps, mainly in Japan. They have competition from first-generation PHS services which have been offering these sorts of speeds for two years now. The first W-CDMA platforms (an evolutionary path for TDMA and
GSM networks) may support speeds in excess of 384 kbps, but they won?t be available until next year at the earliest. Right now in Japan, the bulk of wireless Internet use, from a real market of over 5 million people, takes place on the PDC platform, which supports speeds of just 9.6 kbps. Speed, like size, isn?t everything.
Gilder?s contends that TDMA has a capacity disadvantage against CDMA. This is true if you take the air interface in isolation. But the sheer dominance of TDMA-interface operators across the world (GSM uses TDM access) is placing vendors under pressure to develop a range of optimization solutions, such as half-duplex algorithms, micro- and picocells, and frequency-reuse ratios that have trended down from seven cells to four.
Providing high data rates and considerably higher capacity on any standard requires more base stations. It is not a cheap or easy process. With TDMA-based operators globally accounting for over eight times the subscriber numbers of CDMA-based operators, there?s bound to
be successful technical and business models that provide cheaper alternatives to complete network trashing.
Gilder forgets that there is a big difference between an air interface and a standard. CDMA is a superior air interface to TDMA, but cdmaOne is not a superior standard to GSM. This is why the TDMA fraternity is frantically attempting to converge its back-end systems with GSM,
which has the lead when it comes to roaming tables and databases, messaging protocols, billing procedures and subscriber identity modules. These standards enable GSM operators to earn lots of margin-heavy extra cash.
It?s no coincidence that CDMA pitches itself as the discount service alternative to GSM in markets where the two co-exist. It?s also no coincidence that the cdmaOne alliance is working hard to develop interoperability with GSM standards, given that cdmaOne operators are largely denied access to the $12 billion international roaming market as a result of their original failure to create an effective numbering plan.
Day-Traders Were Ill-Informed
AT&T Wireless would be mad to trash its TDMA network. It increased revenues by 40% last year and is on track for another 30% this year. Most PCS competitors are still loss-makers.
A packet-based protocol, CDPD, exists for TDMA and can be implemented on-demand. There's no reason to regard further data upgrades such as EDGE as any more lacking in
credibility than other proposed 2.5G or 3G models. What's more, the successes of NTT iMode in Japan and
Wireless Application Protocol (WAP) in Europe show that ISDN or DSL-style data rates aren't a pre-condition for the future success of wireless Internet services.
Gilder's views wouldn?t matter so much if they were confined to his 20,000-subscriber newsletter. But he chose to air them on the leading page of the largest circulating
newspaper in the US. Internet message boards frequented by day-traders lit up within hours with passionate,
yet ill-informed, responses. The misinformation was blinding. Gilder should exercise his cursor ?
if you pardon the homonym ? in a more balanced way. |
