So why would both Brazil and Korea make this highly counterintuitive decision to go after W-CDMA - even though they both had a "natural", low-cost alternative in 1x? Why are two of the Top Ten markets in the world abruptly veering towards W-CDMA - even though they know about the initial sticker schock?
As I'm sure you know, capitalism definitely isn't perfect. In the case of South Korea, the fact that SK Telecom's been talking with both DoCoMo and Nokia for a long time can't be ignored. Considering that, when compared with its competitors, SK Telecom will inevitably get the most lucrative roaming deals once they roll out with W-CDMA, it seems that LG Telecom and Freetel only went along for the ride due to the fact that they didn't want to push a standard that wasn't compatible with the one pushed by the proverbial 800 lb. gorilla in their market, and having to fight the battle with Samsung, the leader in the South Korean handset market, having to consider a shift in handset design priorities considering that it's lost its largest handset customer. Keeping in mind that the nation's government doesn't seem to be too happy with the decisions, it seems that it was SK Telecom that single-handedly sent South Korea to the W-CDMA camp, with SK Telecom itself wooed by DoCoMo and Nokia.
It should also be noted that while the South Koreans shifted gears, DDI, which had a far greater impetus to opt for W-CDMA, decided not to switch. I'm sure that, more than anything else, cost was the primary motivator.
Granted, I'll admit that I wouldn't be surprised if AWE opted for a GSM/W-CDMA upgrade due to bureaucratic/marketing reasons, especially considering how the company would lose face after the scathing (not to mention amusing) response sent by its CTO regarding the Gilder/Vigilante piece. But as for the reasons you give...
1. Economies of scale for GPRS and W-CDMA handsets is going to swamp all competition. Not only are these handsets going to be affordable and shipping in tens of millions of units relatively rapidly - but there is going to be superior variety and choice derived from more than a dozen brands offering competing models. The R&D expenses poured into GPRS and W-CDMA tower over anything being spent on rival technologies.
The economies of scale argument may have some merit, but on the handset side, IS/95 phones aren't ridiculously priced either. The difference seems to be narrowing as of late, and will most likely narrow even further as a larger % of the components that go into a phone don't relate to the technology it utilizes (i.e. flash memory, larger displays, secondary processing chipsets, etc.).
Meanwhile, I'm sure that, for Brazil and South Korea, the breadth and quality of W-CDMA handset offerings will most likely be superior to that of cdma2000 offerings...but I wasn't talking about Brazil and South Korea, neither of which have spectrum allocation setups borne from hell. It's kind of hard to argue that Voicestream, with its GSM-1900 network, benefits a lot from all those great GSM 900-1800 phones sold in Europe and Asia. As of right now, IMO, Voicestream has a weaker handset lineup than either Sprint or Verizon. In the case of an AWE switch to GSM, this situation would get even more difficult, as either GSM 800-1900/AMPS tri-modes would have to be created, or, in the case that GSM's only rolled out in 1900 Mhz. spectrum, GSM-1900/TDMA-800/AMPS tri-modes would be needed...and that's assuming CDPD can be completely replaced with GPRS. I doubt that the handset selection for these GSM phones will rival what you might find in London or Shanghai.
2. True, affordable global roaming can only be achieved through GPRS and/or W-CDMA.
I agree, and this, I'm sure, was SK Telecom's primary motivation for switching (I still don't think it justifies the costs...); but once again, the American market's a different story. First, in terms of GSM and W-CDMA, Brazil and SK Telecom are starting from scratch. In the U.S., there already exists a nationwide GSM carrier with numerous roaming deals with foreign operators, and which doesn't have to support a spectrum-hogging analog base. There's also Nextel, with its strong business market inroads and its GSM/iDen dual-modes. Thus, if AWE or Cingular go on the GSM upgrade path, it's unlikely that they'll sign up anywhere close to all existing subscribers for whom a phone with roaming support is a must, nor will they get all the revenues generated by forein visitors.
Also, the fact that GSM and W-CDMA rollouts in the U.S. will take place in bands that aren't used in Europe and Asia will make sure that, unlike those who go to South Korea or Brazil, even after factoring in the availability of tri-modes/quad-modes/whatever, a large percentage of foreign GSM users won't have phones that work when they come to the U.S. As I said earlier, capitalism isn't perfect, and consumers don't always make the right choices.
3. cdma2000 may not live up to expectations.
Could you elaborate a little here? Both sides are definitely guilty of some excessive hype. However, if there's a wireless technology that, this year, has proven to be a disappointment in terms of living up to the claims it generated, it's GPRS.
Lastly, I think that you shouldn't underestimate the difficulties that could be faced with regards to opening up the 700 Mhz band. For a lot of the regional TV broadcasters, digital conversions will be quite expensive, and with a large number of analog TV users out there, their livelihoods depend on analog transmissions. Many of them are already making it evident that they won't vacate without a fight, a huge payoff, or both. Take a look at these articles to see what I mean:
thestandard.com
srd.yahoo.com*http://www.wirelessweek.com/news/july00/eig731.htm
With 700 Mhz. availability up in the air until 2006 (perhaps later thatn even that), and with the potential demand that could be generated for multimedia apps such as streaming video, MP3 playback, etc., it'll help if carriers have the ability to deploym something resembling a broadband technology in existing spectrum, and be able to have a great deal of flexibility in their 700 MHz. rollouts, the benefits of TDMA upgrades to 1x extend far beyond cost-related issues.
Eric |
