3G mobile: W-CDMA will win, but not by that much
Catalyst: The GSM Association has predicted that more than 85% of 3G networks will be W-CDMA-based.
11/05/2001 17:07:00 (CommentWire) - Its predictions seem optimistic. GSM will continue to grow, but the rival 2G standard, CDMA, will become yet more popular in China. While GSM operators will use W-CDMA networks for 3G, firms that currently operate CDMA networks are much more likely to use another standard, CDMA2000.
The GSM Association, which represents network operators, manufacturers and suppliers who use the GSM standard, today announced that GSM devices account for over 70% of the world's digital mobile phones. The association expects this to rise as 3G networks come into operation, with more than 85% using its favored W-CDMA standard.
A GSM network can carry less data for a given amount of spectrum than a CDMA network, a standard patented by the equipment manufacturer, Qualcomm. Yet because of its widespread early adoption, GSM has a major advantage over rival standards: a wider range of handsets and near-universal international roaming.
GSM will grow in popularity. A third standard, TDMA, is similar to GSM but does not have the advantage of widespread adoption. As a result, a large proportion of TDMA operators will soon add GSM support to their networks. But the predictions still seem optimistic. In China, soon to be the world's largest mobile market, CDMA is becoming more popular. The second largest operator, China Unicom, yesterday announced it expects to add 40 million CDMA customers by 2005.
As far as 3G goes, nearly all GSM operators are likely to upgrade to W-CDMA. It is significantly cheaper to build a W-CDMA network on top of GSM. As a result, most new entrants in GSM markets will follow suit - even though the Korean government continues to insist that one of its 3G licenses is specifically for a CDMA2000 network. But the association's figures seem to rely on some firms that currently operate CDMA networks paying a premium to move to W-CDMA as well.
A key example is Verizon Wireless. Its 40% shareholder, Vodafone, is keen to move from CDMA to W-CDMA to be compatible with its international network. But Verizon Communications, which owns the other 60%, wants to take the cheaper route. A Vodafone victory would send a signal to other mobile operators that it is worth paying the extra for roaming capacity; if Verizon wins, the reverse will be true.
Since most observers in the industry expect Verizon to prevail, it's clear that CDMA2000 is a long way from dead.
Source: Datamonitor - 11/05/2001 17:07:00
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