CDMA/GSM Battle Moves to US Soil
By: Tom Taulli & Dave Mock | December 04, 2000
If you took a poll today, probably very few Americans would say they hold fears of any significant battles taking place on US shores. In Europe, maybe. In Israel, definitely. But not in the isolated, peace-loving US. Hey, even with a Constitutional crisis with the election, there are no tanks in the streets.
But there is another form of battle on US shores. It's the wireless war; the ongoing struggle for technical dominance between CDMA and GSM just took a dramatic turn today.
AT&T solidified a significant partnership agreement with NTT's DoCoMo. This was nothing new and came as no big surprise to the industry. DoCoMo has been trolling for an ally on US soil for some time now in order to gain access to a lucrative wireless market for its cool technology (although some argue they are only after the teen and pre-teen market).
But what came right on the heels of that announcement was the proverbial "shot heard around the world".
AT&T Wireless struck a lethal blow to speculators who thought they may scrap their TDMA network for a CDMA based IS-95 structure (was that really ever a serious consideration?). A slew of announcements today confirmed that AT&T Wireless has signed several letters of intent to purchase significant volumes of infrastructure equipment to migrate their current network to -- you guessed it -- GSM.
The gear will be advanced base station and mobile equipment that includes GPRS functionality on a GSM platform, with the added sparkle of being UMTS capable in the future. While there are very few specifics at this time, there was no indication that this equipment would replace their current TDMA network. Rather, the new infrastructure would be built along side their current network, which makes more sense.
This also demonstrates the acknowledged significance of 2.5G. More analysts are now realizing that 2.5G is not just a short hop to 3G; it is a financial necessity and a necessary competitive asset. The image of US carriers forking out billions for non-standard, occupied spectrum to offer services that most Americans probably don't want and certainly can't afford shows haunting similarities to Iridium. AT&T Wireless has now wisely positioned themselves to incrementally offer more advanced wireless services, rather than taking a giant leap and unnecessary risk.
This series of announcements not only lobs a hand grenade into Sprint's offices, it sends a smart bomb right through the CDMA window at the CDG headquarters. Suddenly the rapid growth of CDMA in the United States has a much more committed and nimble foe with strong backing. Before today, the image was of AT&T slowly dying on the vine with no clear path to advanced wireless services. Now there's a large cash infusion and several equipment providers eager to serve both sides in building out new infrastructure. It's amazing what can change in a day.
In actuality, all this didn't happen overnight. AT&T Wireless has made it known for several quarters that they were pursuing EDGE as a path to 3G. It's just that no one believed them. Analysts became too focused on the fact that the migration from TDMA to EDGE was so fraught with problems that it wouldn't pan out and AT&T Wireless would be stuck. Why is it any surprise that a battle-hardened competitor like AT&T would come up with a viable alternative?
No matter what angle you take, this can't be good for cdmaOne. Just when they were catching up to the status quo through mergers, marketing agreements, and expanding subscriber bases, AT&T has opened the door to a whole new set of opportunities that are supported around the world. So you want to check out that new i-mode thing? Not on your CDMA phone. Want to travel the world with one phone? AT&T will make it cheaper and easier.
Until recently, GSM technology looked like the shunned orphan in the US wireless market. A few years ago, with subscriber numbers orders of magnitude below the rest, there did not seem to be any real future in the technology in the Americas. Then Nextel made a world phone that brought iDEN and GSM closer together. Then Voicestream started to consolidate carriers and demonstrate real strength. Then DT swooped down and dropped a price tag that pegged a high premium on Voicestream's business. Then Anatel changed the direction of the Brazilian wireless market in favor of GSM. And then…well, you get the picture.
What comes in the next year or two may show today to be only the tip of the iceberg. With one of the strongest, most homogeneous wireless networks in the US now committed to an upgrade to W-CDMA through GSM, any number of future possibilities now come into play. Would Voicestream and AT&T wireless combine assets, take interest in each other, or set up nationwide roaming agreements? Will this deal give Cingular the encouragement it needs to migrate its remaining TDMA networks to coincide with their GSM base and take a similar path to 3G? What about the rest of the Americas, where there is a strong TDMA base? They eventually need to migrate too.
So you can live in denial if you wish, but the CDMA/GSM standards battle has come to the US in full force. While most people saw the stunning growth in CDMA and figured the war was all but won, it is really only beginning. You can expect to see each side setting up strongholds and positioning forces in the coming years.
Fortunately though, in the long run this ongoing battle should only improve the wireless quality of life in the US. That is of course unless they send all of us old AMPS users into concentration camps where we can't get service.
unstrung.com |
