Eric
How does the Shosteck report fit into the discussion going on? My impression was they were positive in respect to their out look for Q.
I'm enclosing a copy of an e-mail I got from them clarifying some of the points they made in their report:"The Next Generation Transition for TDMA Operators: Assessing the GSM and CDMA Options." You probably got one too.
Kat
CLARIFYING WHAT WE SAID AND WHAT WE DIDN'T -
THERE IS A FUTURE FOR GSM 800, BUT REACHING
THE MASS MARKET WILL TAKE TIME
October 23, 2002. Earlier this month, we released our latest white paper,"The Next Generation Transition for TDMA Operators: Assessing the GSM and CDMA Options." This has unleashed a fury of response. Given the flux and
uncertainty in the industry, this did not surprise us. However, much of the criticism has stemmed from a misunderstanding of what we said - and what we did not.
Most importantly, our study focused on TDMA 800 operators - in particular those in Latin America - who have yet to make a technology choice. It is not as relevant for TDMA 800/1900 operators. It is less relevant for TDMA
800/1900 operators who are deploying new networks.
In the paragraphs that follow, we again state our views. Our quotation on UMTS is taken from Chapter 4 of the paper. Other quotations are from the
Executive Summary.
*****
"... voice will continue to provide operators with most of their revenues into the foreseeable future. This will be especially so in developing economies.
"... the cost of deploying a new network ... is of less concern to North American operators ... [who] enjoy strong cash flow and can pay their vendors in dollars. It is of more concern to operators in Latin America ... [who] must pay for infrastructure in currencies that are depreciating
against the dollar. ... [This is] curtailing any transition to next
generation technology, whether GSM/GSM-GPRS or CDMA 1x."
" ... as long as AT&T and Cingular ... support TDMA, vendors will as well. This is providing operators in developing countries the opportunity to defer expenditures on 3G infrastructure and, indeed, their
choice of a 3G-transition path."
"...the market for CDMA 800 handsets is more competitive than that for TDMA 800 and GSM/GSM-GPRS 1900 [handsets]. This indicates a continuing introduction of new CDMA 1x 800 models and continuing downward pressure on pricing."
"... the history of GSM 1900 reveals limited competition among handset manufacturers and relatively few models. This suggests [that manufacturers will produce] relatively few models for GSM 800 [until the market is larger].
"Until the introduction of more advanced CDMA 1x
ASICs, 'pure' GSM handsets will remain less expensive. By year-end 2002, low-cost GSM 900/1800 handsets produced by major manufacturers will sell for $77. Vendors from
China may offer GSM handsets at prices 20 to 30 percent lower."
"Thus, 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 low
[wholesale] prices. However, over at least the next one to two years, 'pure' GSM 800 handsets will likely not be produced."
"AT&T and Cingular are assigned to 800 MHz and 1900
MHz. [Initially]...they intend to use GSM-GPRS to support data services, not voice. ... they need dual-mode/dual-band GSM-GPRS 800/1900 models. Most Latin American operators are assigned to only 800 MHz. They
must concentrate on low-cost voice. ...they need ... [low-cost] single-mode/single-band GSM 800 models."
"In sum, GSM 800 handsets should be among the lowest priced on the market. However, it will take one to two years or longer ... before that
happens ... Because of lower cost ASICs, CDMA 1x 800 models priced in the mid-$80's range will become available by year-end 2002."
" ... we strongly disagree with those who claim that UMTS is 'dead.' ... UMTS will not fail. Like all new technologies, it must mature. ... it will live up to its early promise ... [and begin to] develop mass-market
volumes ... [in] 2005."
*****
As a consequence of this analysis, vendors may bring low-cost GSM 800 handsets to market sooner than otherwise would have been the case. If so, the paper would have served its purpose to uncover the challenges of the technology transition for Latin America's TDMA 800 operators.
"The Next Generation Transition for TDMA Operators: Assessing the GSM and CDMA Options" is available at no charge from our website, www.shosteck.com.
To discuss these and other issues, please contact Jane Zweig, CEO, The
Shosteck Group, 1 + 301, 589-2259 or jzweig@shosteck.com. |
