CDMA Report Controversy>
From the March 15, 1999 issue of Wireless Week
Controversy Erupts Over CDMA Report
By Brad Smith
A new report released last week touts code division multiple access over other technologies. However, questions have arisen
about the timing of the report and its release during a key meeting on third-generation standards.
Mountain View, Calif.-based Frost & Sullivan, in a report titled "World CDMA Infrastructure Equipment Markets," concluded
that CDMA has "clear advantages in cost, clarity and capacity" over the other major air interfaces.
The author of the report, Subodh Karnad, said CDMA was "the hottest of the three cellular standards" based on infrastructure
sales growth of $2.1 billion in 1998 and 20 million total subscribers. He also said CDMA subscriber numbers are expected to
swell to 125 million by the end of 2002.
Karnad told Wireless Week his report did not intend to select a "best" technology. He said CDMA has some disadvantages,
including the higher cost of its infrastructure compared to other technologies, the high relative cost of CDMA handsets, the lack
of handset choices and the lack of a European footprint.
"What we are saying is that CDMA is a good technology, but we're not saying the others are not good," he said. "It is my
personal opinion that all of these standards have their own place."
Karnad said CDMA infrastructure equipment sales totaled $6.4 billion in 1997, increasing to $8.5 billion in 1998. He predicted
sales will peak at $9.46 billion in 1999 and then decline at an annual rate of 9.7 percent through 2002. The decline represents a
healthy indication of a high-growth market, he said.
The report was issued the same day that the International Telecommunication Union began meeting in Fortaleza, Brazil, to
debate 3G technologies and a possible converged global standard. Although CDMA technology is expected to become part of
some 3G standards, two different camps have formed over what standard is best.
That timing and the fact that Frost & Sullivan raised what some believed to be "old war" between technologies prompted other
analysts to wonder if the report wasn't politically motivated.
Karnad said the release timing was just a coincidence since the report was completed weeks earlier. He also said Frost &
Sullivan "are not influenced by any kind of outside interest."
Others still questioned the timing and reopening the debate.
"I could not believe that anyone would be reviving this old battle," said David Kerr, an analyst with Strategy Analytics. "They're
fighting a battle from the past. The reality is that capacity is not the dominant factor in the marketplace; it is differentiation
through value-added features."
CDMA advocates years ago said the spread-spectrum technology would deliver anywhere from 20 times to 50 times the
capacity of analog technologies, but several experts told Wireless Week that CDMA's capacity increase is now estimated at six
to 10 times the capacity of analog.
There also are capacity gains with the two other digital standards--global system for mobile communications and time division
multiple access Interim Standard-136. Those gains are estimated at three to six times analog capacity.
As expected, spokesmen from the CDMA, TDMA and GSM camps had responses to the Frost & Sullivan report.
Jim Takach, director of advanced programs for the CDMA Development Group, said he had not seen the report but found it
"encouraging" to have CDMA technology validated by an independent source.
Leo Nikkari, executive director of the Universal Wireless Communications Consortium, said he thought the capacity issue "was
put to bed years ago. The largest-capacity systems in the world are TDMA based."
Mike Houghton, spokesman for the GSM Alliance of North America, said CDMA has always had a capacity advantage "on
paper, but in reality carriers chose what is best for them. In some cases CDMA may be best and in others GSM is better. We
think we have enough capacity gains and cost efficiencies to equal theirs."
He disputed the Frost & Sullivan assertion that CDMA was the "hottest" technology, saying that GSM is adding new customers
at the rate of 124 per minute.
"I think it's going to help us."
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