Wireless Watch On Being Gildered
telecominvestormag.com
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. |
