re: The Shosteck Group on TDMA, GSM, & CDMA Options
Hersch & Jane are back.
They have just published a new whitepaper called "The Next Generation Transition for TDMA Operators: Assessing The GSM and CDMA Options".
It is available at no charge on their website:
shosteck.com
I have not yet read the paper, as it is being e-mailed from Shosteck Central.
One may remember that Hersch & Jane put together a whitepaper commissioned by CDG called "The cdma2000 Migration Alternative For TDMA Operators""
This is evidently a follow-on and it may have been produced independently of CDG sponsorship but I am not sure of that.
The Key line for the whitepaper is:
"TWO-YEAR LACK OF LOW-COST HANDSETS WILL LIMIT OPERATORS DEPLOYING GSM 800"
I have excerpted below some of the text from The Shosteck Group summary of the whitepaper with direct quotes from either Dr. Herschel Shosteck or Jane Zweig:
>> * The analysis focuses on the 800 MHz frequencies and the special challenges such operators face.
- "Our basic conclusions remain unchanged from sixteen months ago. "Regardless of technology choice, TDMA 800 operators face a difficult engineering and commercial transition. That said, at 800 MHz, CDMA will be less difficult. For the 800 MHz frequencies, multiple models of low-cost CDMA 1x handsets are now available. No such models are yet available for GSM 800. Those announced are expensive. GSM 800 models will likely remain so for the next two years. This lack of varied and low-cost handsets will be a critical weakness for the GSM 800 path."
- "A further weakness will be the absence of low-end GAIT handsets to bridge GSM 800 and TDMA 800 networks. Such handsets are essential for providing full coverage and transparency of services for end-users as GSM 800 networks are built-out. Coverage may not be an issue for operators choosing the CDMA 1x option. All CDMA 800 handsets for the Americas incorporate AMPS as well. This means that TDMA operators who choose the CDMA option can use the AMPS side of their TDMA-AMPS networks to provide ubiquitous voice service as they make the transition to CDMA 1x."
* Whether TDMA 800 operators choose GSM/GPRS or CDMA 1x as a migration path, they still face the financial burden of deploying new base stations, switches, and related network equipment.
- "The cost of deploying a new network is of critical importance. It is of less concern to operators in North America, in particular Cingular and AT&T, who enjoy strong cash flow and can pay their vendors in dollars. It is of overriding concern to operators in Latin America and other developing areas who are experiencing depreciating local currencies and declining cash flows. In these countries, Brazil in particular, the dollar cost of infrastructure will curtail any transition to next generation technology, whether GSM/GPRS or CDMA 1x."
* The six criteria that operators might use to evaluate their migration options. These are:
1) long-term economies of scale
2) cost of initial infrastructure deployment
3) effective data rates
4) RF capacity
5) handset availability
6) handset costs.
* They conclude that handset availability and costs are, by far, the most important.
"There is a misconception regarding economies of scale. In order to gain the benefits, a technology must meet two conditions. It must mature to the point at which large volumes of equipment are being produced and it must be simple enough that the costs of greater complexity do not outweigh the savings of large production volumes. If these two conditions are not met, the technology cannot provide the full benefits from economies of scale."
* UMTS, as a follow-on to GSM, will eventually have more subscribers. However, the white paper observes that both UMTS and CDMA 1x are similar technologies.
Because of their similarity, the two technologies will share much in common, leading to similar economies of scale.
The Shosteck Group challenges those who claim that UMTS is dead. Just as two years ago the financial analysts of Wall Street, the City of London, and elsewhere in Europe raised unrealistic expectations of how easily UMTS would be deployed, today, they are setting unrealistic expectations of its demise. UMTS will not fail. Like all new technologies, it must mature. And when it does, it will live up to its early promises and possibly exceed them.
- "Because of the maturity issue, it will take time to produce large numbers of UMTS handsets. Production of UMTS handsets will not surpass production of CDMA 1x handsets until 2006-2007. This means that until then, CDMA 1x handsets will hold the economies of scale advantage. More importantly UMTS handsets will be multi-mode GSM/GPRS/UMTS, or possibly GSM/GPRS/EDGE/UMTS. CDMA 1x and its derivatives - CDMA 1x EV DO and CDMA 1x EV DV - will be backwards compatible. Multi-mode handsets will not be required. Because of this, the family of CDMA 1x handsets will be less complex than the family of GSM-UMTS handsets. As such, they will be less expensive. This means that the economies of scale that UMTS may eventually experience would not be sufficient to provide an advantage in handset pricing."
* Unlike other criteria, handset availability and handset pricing are immediately relevant in the market and directly impact end-users.
"TDMA operators must carefully consider handset availability because of the unique circumstances under which GSM-GPRS is being adopted in the Americas. As presently conceived, adoption depends extensively on GSM 800, GAIT, and EDGE. All three are new technologies. But, only GSM 800 will be deployed by all TDMA operators who choose the GSM path. Notwithstanding their importance in the U.S., globally, AT&T and Cingular provide a relatively small market. Thus, while a market for GSM 800 is certain, compared to that for GSM 900/1800, it will be limited. As such, it may be insufficient to stimulate manufacturers to produce large numbers of handset models. This will be especially so over the near-term."
* The white paper points out that EDGE has uncertain support outside of the Americas. Questions regarding its commercial viability are being raised in Europe. Reluctance by European operators to adopt EDGE would limit the size of the market and further constrain the availability and variety of EDGE handsets produced for North America.
* The market for GAIT will be yet more limited. Assuming that AT&T and Cingular keep to their widely announced build-out plans and construct GSM-GPRS networks within two years, GAIT would be irrelevant after that time. TDMA operators elsewhere in the world, in particular Latin America, would have virtually no bargaining power with which to motivate manufacturers to produce GAIT models.
- "Because of the uncertain market for EDGE and the short-lived market for GAIT, few manufacturers will produce the handsets. Those that do will produce few models. Such models will be expensive. The limited selections and high prices of handsets will mean less appeal to end-users. This will be especially the case when end-users compare such handsets against what is already the vastly greater number of CDMA 1x models."
* The white paper documents that CDMA 1x operators already benefit from a multitude of handset models, which, according to multiple sources are rapidly falling in price.
- "When analyzing handset prices, several factors come into playAs more ASICs for GSM-GPRS and CDMA 1x are introduced, the costs of these technologies will drop to below those of GSM and cdmaOne. In the case of CDMA 1x, this will take place in late 2002 through 2003. By year-end 2002, low-cost GSM 900/1800 handsets (without GPRS) produced by major manufacturers will sell for $77. Chinese vendors may produce them at 20 to 30 percent less."
- "If prices for GSM 900/1800 would transfer to GSM 800, Latin American operators could choose either GSM/GSM-GPRS or CDMA 1x and be assured of numerous models of low-priced handsets," Dr. Shosteck continued. However, due to a relatively small market and limited competition among manufacturers, for as long as two years after commercial launch, low-cost GSM 800 handsets will likely not be available. GSM-GPRS handsets will be available. However, they will be more expensive than those for TDMA 800 or CDMA 1x 800."
This greater expense will be due to the diverging interests of AT&T and Cingular compared to those of Latin American operators. AT&T and Cingular need dual-band GSM 800/1900 handsets. Most Latin American operators need only single-band GSM 800 handsets. AT&T and Cingular intend to use GSM-GPRS to support data services, not voice. This means high-end handsets. Latin American operators must concentrate on low-cost voice.
* Given their search for profits, manufacturers are supporting the more expensive GSM-GPRS 800/1900 handsets required by AT&T and Cingular rather than the less expensive GSM 800 handsets required by operators in Latin America.
- "Handset prices will remain high until the market for GSM-GPRS 800 attracts more manufacturers. Pricing of yet more complex handsets, such as GSM-TDMA, GAIT, and EDGE, will be higher still. The low cost advantages of GSM handsets may not be available for the Latin American market for several years to come." <<
- Eric - |
