re: Verizon Migration Path
<< In re Nexwave, that is still in bankruptcy court, correct? An answer will probably come about in the next 10 years after the appeals process. >>
Well, it sure has dragged on and tied up some valuable spectrum for 5 years. Decision due shortly but who knows if it is the last.
<< I assume that VOD wants "seemless roaming" across NA and Europe. >>
Verizon Leans Toward Vodafone's W-CDMA Choice
>> Finding Global Peace
Peggy Albright
June 11, 2001
Wireless Week
Verizon Wireless last week finally confirmed what many insiders suspected: The U.S. wireless giant is likely to deploy wideband-CDMA, the rival technology to its core CDMA network.
The carrier, a joint venture between Verizon Communications and the United Kingdom-based global powerhouse Vodafone plc, has found itself caught in the middle of a third-generation technology war in recent months. Verizon has a CDMA migration path mapped out with CDMA2000, but Vodafone uses GSM.
Naturally, Vodafone's advanced technology of choice is W-CDMA, the European-backed technology that would facilitate global roaming and provide economies of scale.
Vodafone, which owns 45 percent of Verizon, has lobbied the U.S. operator to switch to W-CDMA for the long term. In fact, Vodafone CEO Chris Gent delivered that message at an investor meeting in New York last week. Now, it seems Verizon may be listening.
Verizon plans to launch the next-generation CDMA upgrade, CDMA2000 1X, by the end of this year, and follow that with a 1x-EV deployment. These two technologies should meet Verizon's needs and keep customers happy until 2002 or 2003, the company says.
After that, however, Verizon likely will install W-CDMA. The reasons are obvious. A W-CDMA deployment would facilitate seamless roaming with transparent services for customers using the two systems. That, in turn, would make it easier to sell services to global corporations. A common platform between Verizon and Vodafone also would create added economies of scale for W-CDMA equipment purchases, which in theory will help drive costs down for customers.
But there's another, possibly more important issue of interest to Vodafone, and that involves keeping roaming revenue in-house. In a research report issued last week, Credit Suisse First Boston analysts said they believe a Verizon W-CDMA move would help Vodafone avoid paying roaming fees to its competitor VoiceStream/Deutsche Telekom. Vodafone's European customers traveling to the United States would roam on Verizon's network instead.
A Verizon representative confirms that theory. 'We certainly have every intention to take every advantage of our international footprint with our parent company. And that likely means W-CDMA,' says spokeswoman Andrea Linskey.
Underlying the whole issue is whether Verizon's decision represents capitulation to its European parent or, simply, good old-fashioned strategic thinking. 'I've believed for quite a while that [W-CDMA] was why Verizon was interested in the spectrum auction,' says Ira Brodsky, president of Datacomm Research Co. 'I think their strategy for some time has been to implement both [technologies].'
That strategy could give Verizon the opportunity to become the only carrier in the world to offer both CDMA2000 and W-CDMA, while also protecting the operator from isolating itself in the still-nebulous world of W-CDMA. 'I see the whole W-CDMA effort at great risk right now,' Brodsky says, referring to an issue that has recurred in the various W-CDMA commercialization delays: problems managing hand-offs between base stations. Brodsky believes the hand-off problem represents a fundamental flaw in W-CDMA technology that will take some time to remedy, and that CDMA2000 deployments, already up and running in some countries, will become more attractive to skeptics.
Not everyone believes Verizon will take the W-CDMA leap, however. 'They're being politically astute in working with Vodafone,' says Perry LaForge, executive director of the CDMA Development Group. 'This is really not a change. What they're saying is they're committed to CDMA2000, they're rolling it out very quickly, they're evaluating W-CDMA.'
Many in the CDMA camp do not put all that much weight on the global roaming factor. Verizon is more likely to enable roaming through the sale of handsets with integrated CDMA2000 and
W-CDMA chips, LaForge contends. That approach would accomplish the same goal without forcing the operator to look for more spectrum or drive up infrastructure costs, he says.
The CDMA Development Group said recently that it does not believe that global roaming represents a large enough business need to justify swapping technologies. It labeled international roaming primarily a GSM-industry issue.
But Vodafone upper management based in this country have described what they see as strategic weaknesses in both the GSM and CDMA camps when it comes to 3G.
California-based Paola Tonelli, Vodafone's senior director of industry advocacy, who also chairs the operators group in the UMTS Forum, put it this way in a recent interview with Wireless Week: 'What the GSM companies don't understand is that CDMA technologies in the [United States] are the ones that make sense. What the CDMA people don't fully appreciate, in my opinion, is the importance of roaming revenue.'
And that, in a nutshell, may explain why Vodafone and Verizon seem to have come to a meeting of the minds. <<
- Eric - |
