Wireless Technology Adoption in the Americas
We had considerable discussion on this board (actually the earlier version of this board) back in the year 2000 about the implications of some technology decisions made in the mobile wireless community and their potential impact on the potential for Qualcomm controlled CDMA to become the dominant mobile wireless technology in the Americas. This is an update.
Once an ANSI-41 Fortress, technology adoption by carriers has changed dramatically in the Americas in recent years, and it is now beginning to be reflected in the subscriber metric. Subscriber growth lags technology adoption, but the inflection point in GSM subscriber growth was Q4 2002.
In the 12 months ending September 30, 2002, the YOY growth rate of GSM in the Americas exceeded the CDMA growth rate for the first time (37% for GSM v. 36% for CDMA), but at that time the subscriber base for GSM in the Americas was quite small - only 22 million subscribers.
As a result of carrier technology adoption and subsequent buildouts, in the 12 months ending September 30, 2003 the YOY growth rate of GSM in the Americas exceeded CDMA dramatically (89% for GSM v. 21% for CDMA) but more significantly the actual subscriber growth of GSM exceeded any other technology in the Americas including CDMA for the first time, and that trend is highly likely to continue.
At the beginning of 2000 the Americas were a GSM wasteland. ANSI-41 based AMPS, TDMA, and CDMA dominated. TDMA was closing rapidly on AMPS, and CDMA was the fastest growing technology, closing on TDMA. GSM was a bit player with only 6.6 million subscribers.
At the beginning of 2000 there was one national GSM carrier in the US, one in Canada, none in Mexico, none in Brazil, and only a handful across Latin America and the Caribbean.
Anatel's 1800 MHz spectrum decision in 2000 followed shortly by announcements of GSM-850 and EDGE commercialization, the successful commercialization of GSM-850 in 2002, the introduction of GSM-1800 into the Americas in 2002, and the commercialization and launches of EDGE in 2003 contributed significantly to this paradigm shift in technology adoption in the Americas. The catalyst for this shift was the decision by AT&T Wireless in November 2000 to migrate to WCDMA using a GSM rather than a TDMA migration path. It was the first of many significant technology flips.
Today, there are 3 national GSM carriers in the USA, 2 in Canada, 2 in Mexico, 3 in Brazil, and GSM is launched or launching in every single country (bar Haiti) in the Americas, and there will be close to 50 GSM million subscribers in the Americas by the end of this year. GSM has truly achieved ubiquity worldwide, and in order for it to do that, it had to achieve ubiquity in the Americas, particularly in Latin America, which was the last major continent that GSM penetrated.
Summary Fact and Assorted Conclusions and Opinions
* Although IS-136 TDMA is still the dominant mobile wireless technology deployed in the Americas, TDMA growth is slowing dramatically - growth is already negative in North America - and CDMA will soon be the dominant technology in the Americas as measured by the subscriber metric.
* CDMA is still experiencing good subscriber growth in the Americas, but currently both actual growth and the growth rate is declining. The year ending quarter will be interesting, to see if this trend reverses somewhat.
* The large Americas AMPS subscriber base (now ~20m) is diminishing rapidly.
* GSM growth in the Americas is accelerating rapidly and dramatically and many research agencies are projecting it to achieve parity in the Americas with CDMA as early as 2008 or more likely 2009, although CDMA will likely be the dominant technology in the USA through the end of this decade, with the "GSM family" a reasonably close number 2 at that time. Wildcards in the USA are Nextel and NextWave. 3GSM WCDMA will launch small scale in the USA in late 2004 but proliferation in the Americas is projected to significantly trail proliferation in Europe and Asia.
* In the 12 months ending 9/30/03 GSM YOY actual growth exceeded CDMA growth in the Americas for the 1st time (19.2 million GSM net sub adds v. 17.9 million CDMA net adds - a 1.3 million subscriber differential).
* In the 9 months ending 9/30/03 GSM actual growth exceeded CDMA growth by 2.9 million (14.96 million GSM net sub adds v. 12.1 million CDMA net adds).
* There were 40.8 million GSM subscribers in the Americas as of September 30, 2003 v. 101.8 million CDMA subscribers v. 108 million IS-136 TDMA subscribers (2:5:1 advantage to CDMA over GSM, down from 4:1 at the end of 2001).
* There were 25.6 million GSM subscribers in US and Canada as of September 30, 2003 v. 71.4 million CDMA subscribers (2:8:1 advantage to CDMA).
* There were 15.2.million GSM subscribers in Latin America as of September 30, 2003 v. 30.4 million CDMA subscribers (2:1 advantage to CDMA).
* Actual growth of CDMA last 12 months exceeded GSM growth in USA & Canada by 2.8 million subscribers.
* Actual growth of GSM last 12 months exceeded CDMA growth in Latin America by 2.8 million subscribers by 4.1 million subscribers.
* While GSM growth v. CDMA is more dramatic in Latin America than in the USA and Canada it is important to note that North American carriers that have flipped from IS-136 TDMA to GSM, like Rogers, AT&T Wireless, Cingular, Dobson, (and Telcel in Mexico) are just beginning to aggressively move TDMA subs to GSM and are still in the process of expanding GSM coverage and capacity.
* Before GSM reaches parity with CDMA, CDMA will enjoy several years as the dominant technology in the Americas as TDMA subs and the remaining AMPS subs are converted to GSM or CDMA.
Subscriber Growth Detail
Comparative 12 Month Technology Growth Worldwide & Americas
·
YOY
Sept 02 Sept 03 Net Adds Growth
·
CDMA Worldwide 134.90m 174.05m 39.15m 29.02%
CDMA Americas 83.90m 101.80m 17.90m 21.33%
·
GSM Worldwide 745.00m 921.00m 176.00m 23.62%
GSM Americas 21.57m 40.76m 19.19m 88.97%
·
CDMA Subscribers in the Americas
·
Dec 99 Dec 00 Dec 01 Dec 02 Sept 03
·
NA 16.50m 28.70m 48.42m 62.50m 71.40m
LA 5.10m 14.95m 19.90m 27.20m 30.40m
Total 21.60m 43.65m 68.32m 89.70m 101.80m
YoY Adds - 22.05m 24.67m 21.38m 17.90m
·
GSM Subscribers in the Americas ¹
·
Dec 99 Dec 00 Dec 01 Dec 02 Sept 03
·
NA 5.70m 9.60m 13.50m 18.70m 27.39m
SA 0.90m 1.70m 3.60m 7.10m 13.37m
Total 6.60m 11.30m 17.10m 25.80m 40.76m
YoY Adds - 4.70m 5.80m 8.70m 19.19m
·
¹ In this EMC table Mexico is included in NA. CDG has Mexico in LA
·
CDMA Subscriber Advantage over GSM in the Americas
·
Dec 99 Dec 00 Dec 01 Dec 02 Sept 03
·
15.00m 32.35m 51.22m 63.90m 61.04m
·
Ratio of CDMA Subscribers to GSM Subscribers in the Americas
·
Dec 99 Dec 00 Dec 01 June 02 Sept 02 Dec 02 Sept 03
·
3.3:1 3.9:1 4.0:1 4.0:1 3:9: 1 3.5:1 2.5:1
·
GSM in the Americas: A 12 Month Perspective
·
GSM Subs GSM Subs Net 1 Year
09/30/02 09/30/03 Adds Growth
·
USA & Canada 15.40m 25.59m 10.19m 66.1%
Latin America 6.17m 15.17m 9.00m 145.8%
All Americas 21.57m 40.76m 19.19m 89.0%
·
CDMA in the Americas: A 12 Month Perspective
·
CDMA Subs CDMA Subs Net 1 Year
09/30/02 09/30/03 Adds Growth
·
USA & Canada 58.40m 71.40m 13.00m 22.26%
Latin America 25.50m 30.40m 4.90m 19.21%
All Americas 83.90m 101.80m 17.90m 21.33%
·
Digital Mobile Wireless in the Americas
·
Subs Subs Net 1 Year % of
09/30/02 09/30/03 Adds Growth Subs
·
TDMA 100.70m 108.55m 7.85m 7.8% 43.2%
CDMA 83.90m 101.80m 17.90m 21.3% 40.5%
GSM 21.57m 40.76m 19.19m 89.0% 16.3%
Total 206.17m 251.11m 44.94m 21.8% 100.0%
·
Digital Mobile Wireless in Latin America
·
Subs Subs Net 1 Year % of
09/30/02 09/30/03 Adds Growth Subs
·
TDMA 54.33m 63.43m 9.10m 16.0% 58.2%
CDMA 25.50m 30.40m 4.90m 19.2% 27.9%
GSM 6.17m 15.17m 9.00m 145.8% 13.9%
Total 86.00m 109.00m 23.00m 26.7% 100.0%
·
Digital Mobile Wireless in North America
·
Subs Subs Net 1 Year % of
09/30/02 09/30/03 Adds Growth Subs
·
TDMA 46.37m 45.12m (1.25m) (2.7%) 31.8%
CDMA 58.40m 71.40m 13.00m 22.3% 50.2%
GSM 15.40m 25.59m 10.19m 66.1% 18.0%
Total 120.17m 142.11m 21.94m 18.3% 100.0%
GSM Technology Adoption in the Americas since 1998
* Greenfield: 38 new GSM operators have launched services in the Americas, with many additional GSM networks planned or licensed.
* 1G AMPS to 2.5G GSM: A dozen AMPS carriers have upgraded AMPS networks to GSM
* TDMA to GSM "flips": Over 80 TDMA 850/900 MHz carriers flipped to GSM
* CDMA to GSM "flips": 4 flips to date include Telefonica Moviles (Mexico). CTI Móvil (Argentina), Sercom (Guatemala), and Viaero Wireless, USA.
* GSM-850: 36 operators have announced deployment of GSM-850 in the Americas
* 24 carriers operating 36 networks in 22 'nations' are currently committed to launching EDGE and 3 of these have already launched.
Key Milestones and Factors Contributing to the Paradigm Shift
- 1998 -
* GSM oriented 3GPP & ANSI-41 oriented 3GPP2 are formed to evolve 3G standards
* Wideband CDMA and UTRA-TDD are chosen as the air interfaces for 3G GSM
* CDMA starts to gain significant traction across the Americas v. TDMA & AMPS
* GSM, available only in 900/1800/1900 MHz, is a niche player in the Americas
* TIM backed Entel (Chile) launches 1st 1900 MHz GSM network in Latin America
- 1999 -
* UWCC TDMA carriers formerly join 3GPP
* TDMA-EDGE (EDGE Lite) employing EGPRS becomes the IS-136 migration path to WCDMA
* GSM Global Roaming Forum formed
* GSM ANSI Interoperability Team (GAIT formed)
* TDMA-EDGE (Lite) has development focus and GSM-EDGE (Classic) stays back burner
* GSM finally completes a national footprint in the USA in 1st FCC re-auction.
* Western Wireless spins VoiceStream (now T-Mobile USA) and acquires Omnipoint, Ariel, and Powertel to become the first national GSM carrier in the USA.
- 2000 -
* The ITU accepts EDGE as an IMT-2000 3G standard
* Anatel sets aside 1800 MHz spectrum for PCS in Brazil, reserving 1900 MHz - 2100 MHz for 3G, and setting an example that other Latin American countries may follow.
* 3GPP announces that they are commencing EDGE standards development
* 3GPP focuses on adding significant voice capacity enhancement to GSM Phase 2+
* The decision is made to downband GSM to 850 MHz
* AT&T Wireless announces plans to deploy GSM/EDGE Classic as an overlay
* The commercialization of GSM-850 is announced by all major GSM infra providers
* Telcel (Mexico) announces plans to deploy GSM/GPRS/EDGE
* GSM-EDGE (Classic) has development focus and TDMA-EDGE (Lite) goes back burner
* UWCC members (TDMA carriers) are left without a clear migration path to 3G
* GSMA and CDG begin open competition for TDMA carriers technology choice
- 2001 -
* Rogers Wireless (Canada) announces plans to deploy GSM & EDGE Classic
* Cingular (U.S.) announces plans to deploy GSM/GPRS/EDGE
* GSM-850 infrastructure starts shipping
* Technology flips greatly favor GSM throughout the Americas
* Greenfield network starts greatly favor GSM in Latin America
* T-Mobile VoiceStream launches first national GPRS network in the Americas
* T-Mobile VoiceStream commits to an EDGE upgrade of their national GPRS network
* The pace of GSM buildouts and conversions increases in the Americas
* Cable & Wireless announces plans to overlay all 12 of its regional AMPS and TDMA 850 MHz operations spreading GSM EDGE across the Caribbean.
- 2002 -
* Technology flips continue to favor GSM throughout the Americas
* Greenfield network starts continue to favor GSM in Latin America
* GSM & TDMA (and CDMA) SMS interoperability achieved
* GAIT and quasi-GAIT (no AMPS) handsets become available
* GSM-850/1900 handsets become available
* GSM-850/1800/1900 & GSM-850/900/1800/1900 WorldPhones become available
* GSM buildouts and conversions continue in the Americas in volume scale
* First GSM-850 launch made by Cable & Wireless in Panama
* GSM-850 is fully commercialized and launches across the Americas
* American GSM carriers increasingly initiate roaming arrangements with Euro-Asians
* AWS and Cingular affiliates or roaming partners begin conversions
* AWS, Cingular, and T-mobile USA form build-out JV's and enter roaming agreements
* EDGE comes out of lab and enters field trials
* AT&T Wireless completes "nationwide" GSM GPRS rollout in 1900 MHz
* GSM-1900 launches in Mexico (Telcel)
* GSM-1800 launches in Brazil (Oi followed by TIM)
* Telefonica Moviles (TEM, fka Pegaso) announces a GSM buildout in Mexico
* Other CDMA to GSM flips start to occur in the Latin America (Telefonica Moviles and America Móvil kicked them off). No GSM to CDMA flips have occurred.
- 2003 -
* The gap between GSM handset introduction in Europe/Asia and Americas narrows
* GSM GSM-850/1900 handsets, and GSM WorldPhones become widely available
* Cingular accelerates GSM conversion in both 850 MHz and 1900 MHz
* AT&T starts filling in and expanding 1900 MHz coverage and adding GSM-850
* Cingular soft launches EDGE
* EDGE launches in Asia and Europe
* Telefonica Móvil in Chile launches EDGE
* AT&T Wireless launches EDGE "nationwide" (214 million POPS) in the USA
* GSM gains significant traction in Latin America
* TIM prepares to launch across LA in their TDMA properties.
* Claro (America Móvil) becomes 3rd Brazilian carrier to adopt GSM
* Every Latin American country has at least one GSM network launched or launching
* OMA standardized interoperable WAP 2.0, MMS, and JAVA with OTA become available.
* AT&T Wireless relaunches mMode to compete with Vision and Get it Now
A New 3G Americas Whitepaper:
Wireless Trends in the Americas: The Proliferation of GSM 850 MHz and EDGE
Chris Pearson
Erasmo Rojas
3G Americas
November 11, 2003
3gamericas.com
This document explores the reasons behind GSM's success in the Americas including the role played by the introduction of GSM 850 MHz equipment and the role of EDGE in the migration to next generation services.
Consider the source (a trade association promoting their technology) but this whitepaper contains a good history of GSM in the Americas and has good appendices listing all GSM carriers in the Americas. "Appendix 4: GSM Operators in Latin America and the Caribbean: Technology Facts" is exceptionally well detailed.
Retrospective:
GSM or CDMA: The Commercial and Technology Challenges for TDMA Operators
The Shosteck Group for
The CDMA Development Group
June 2001
cdg.org
In 2001, when IS-136 TDMA operators were evaluating choices for a migration path, CDG commissioned The Shosteck Group to author this "Independent Study." it was very well written. It is interesting to go back and reread it. Essentially it explored the challenges faced by GSM infrastructure vendors in downbanding GSM from 900 MHz to 850 MHz and implementing EGPRS. It also discussed the "reality gap" that potentially could occur - probably would occur - if promises made by handset vendors did not materialize in promised time frames.
In retrospect what could go wrong, didn't go wrong. 850 MHz infrastructure delivered, was integrated with existing platform components, and was successfully commercialized. GAIT handsets delivered. 850/1900 MHz handsets delivered as did 850/1800/1900 MHz WorldPhones, 900/1800/1900 MHz WorldPhones, and some quad-band WorldPhones. EDGE transceivers delivered, EDGE has been commercially launched, A few EDGE handsets are available, and 2004 will see a wide selection delivering. It also appears that EDGE will deliver its promised data transmission rates.
Sometimes, Fear Uncertainty, and Doubt are unjustified.
A Forecast for Latin America
While Pyramid Research is just one of many "crystal ball gazers," they do happen to be the single research house most closely following the dynamics of mobile wireless telephony in Latin America, and as a consequence their forecasts have some validity, at least to me, and presumably to their clients, although they are hardly infallible. At very least they are a reasonable guideline for growth projections. They are currently forecasting subscribers in Latin America at 114 million at the end of 2003 and 167 million end of 2007. In one of their most recent subscriber forecasts by technology they break out this way:
12/31/2003 12/31/2007
Subscribers Share Subscribers Share
================== ==================
IS-136 TDMA 53.58m 47% 45.09m 27%
CDMA Family 29.64m 26% 43.42m 26%
GSM Family 17.10m 15% 70.14m 42%
Analog 13.68m 12% 5.01m 3%
====== ==== ====== ====
114.0m 100% 167.0m 100%
·
For year ending 12/31/2008, Pyramid breaks the families down in their
market share forecast for Latin America:
·
GSM Family CDMA Family TDMA Analog
================== ============== ============== ===========
2G GSM 27.6% CDMA 23.0% IS-136 10.9% AMPS 0.6%
GSM GPRS 15.0% 1xRTT 9.5%
3GSM EDGE 5.2% 1xEV 3.1%
3GSM WCDMA 5.1%
===== ===== ===== =====
52.9% 35.6% 10.9% 0.6%
For those that prefer to place 3GSM WCDMA in the CDMA family, please make that 47.8% GSM subscribers and 40.7% CDMA subscribers, with 11.5% other at the end of 2008 in Latin America.
Please also note that in an exhibit on the 3G Americas web site, Pyramid research breaks out their 2008 forecast this way, and I'm not sure which of the 2008 forecasts is more current, but such is the nature of this type of long term forecast, as they are tuned regularly based on emerging trends, market dynamics, and technology adoption. Essentially this forecast shows TDMA lingering longer than the one above:
GSM Family = 44.3% · CDMA Family = 31.1% · IS-136 TDMA = 23.8% ·Analog AMPS = 0.8%
[Sorry, I don't have comparable forecasts for North America - but I'll find some or failing that, attempt to take a WAG at constructing some]
Comments are invited.
Best to all,
- Eric - |
