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rcrnews.com of South Korea: CDMA scores low in Asia
Outside of South Korea: CDMA scores low in Asia
New from March-April issue: More coming 29 March
By Tammy Tan
SINGAPORE—Despite all the hype leading up to its launch, CDMA (Code Division Multiple Access) in Asia remains pretty much stuck at the starting post.
Except for South Korea, which accounts for close to 70 percent of worldwide CDMA subscribers, the technology has hit the wall in countries like China, Indonesia, Japan, Singapore and Thailand.
Across the region, CDMA has been plagued by economic, technological and political problems, which have severely hampered the technology group's bid to challenge GSM (Global System for Mobile communications) as the dominate wireless platform in the Asia-Pacific region. Reasons assigned for its dismal showing include lack of handset variety, limited roaming capability as well as increasing concerns about its ability to upgrade into a third-generation system.
A major setback for CDMA proponents took place in Singapore earlier this year when market leader SingTel Mobile decided not to go ahead with the system despite having called for a tender in November 1997.
SingTel Mobile's senior director of mobile technology Taiyo Soo Meng told Global Wireless the decision to not award the contract to any of the six CDMA bidders included concerns over the compatibility of a narrowband CDMA system with 3G systems, and its ability to upgrade into one.
Also, the need for a new system was further reduced by the economic downturn, which dampened mobile phone demand by almost half.
Pyramid Research estimates that as of year-end 1998, there were about 9 million CMDA subscribers in Asia, of which 95 percent were from South Korea and 4 percent from Hong Kong. The remaining 1 percent is spread throughout the other systems in the region.
CDMA growth forecasts for the next few years range from 20 percent to an optimistic 50 percent.
Those optimistic about the technology say CDMA has a bright future ahead simply because of its technological superiority.
Lucent Technologies Inc. Vice President-Wireless Networks Group Scott Erickson said CDMA's ‘‘unique ability to make the most efficient usage out of the limited resource of spectrum has proven to be especially important in this region because the amount of spectrum allocated to an operator is usually very small.''
The technology, he added, also has triumphed because it has been able to provide near-wireline quality—something many users in rural Asia had never experienced before.
But skeptics will tell you otherwise.
Sakina Dhilawala, Singapore-based research analyst for Pyramid said that apart from South Korea, which adopted the CDMA standard based on political rather than technological preference, the take-up of CDMA in Asian countries has been ‘‘slower than expected.''
She believes the lack of roaming destinations, coupled with the lack of handset models, are major obstacles CDMA operators will have to overcome before they can hope to even tackle its biggest rival, GSM.
‘‘Prices are still high, availability of models is low and CDMA handsets tend to be larger than GSM handsets,'' she said.
Indeed, this has been a major contributing factor to the slow take-up in Singapore. The nation's second mobile phone operator, M1, launched CDMA last year but has only managed to sign on 8,000 subscribers—a drop in the ocean compared with Singpore's approximately 900,000 GSM 900 and GSM 1800 customers.
‘‘Certainly the development in terminal handsets has been behind expectations, but I think people will really appreciate CDMA's clarity once the handset problem is solved,'' said M1 chief executive Neil Montefiore.
He said he expects the gap between CDMA and GSM to narrow this year as CDMA growth picks up, although he does not expect CDMA to ever match GSM.
‘‘GSM will remain very much a premium choice because of its roaming capabilities and wider selection of handsets,'' he said.
Elsewhere in the region, the same story is being replayed. Gartner Group's mobile communications analyst Raymond Ho said CDMA in Thailand, Indonesia and the Philippines ‘‘has not been too well received.''
Thailand's Tawan Mobile Telecom Co, which launched its CDMA network last year, was to have sold 60,000 handsets by April 2000 under its contract with the Communications Authority of Thailand (CAT). It only sold 3,000 handsets within the first six months of launch.
One major problem was the fact that at 30,000 to 35,000 baht (US$810 to US$945) apiece, CDMA handsets have become a luxury in cash-poor Thailand.
In Indonesia, barring total collapse, only Komselindo will launch CDMA services, and the other AMPS (Advanced Mobile Phone Service)/NMT (Nordic Mobile Telephone) operators—Metrosel, Telesera, and Mobisel—all have put on hold their upgrade plans.
Even in Japan, DDI Cellular had secured fewer than 100,000 CDMA subscribers by year-end 1998, far below its initial projections. The company, which launched CDMA as a premium wireless service citing its superior voice quality, has suffered in terms of market position as a result.
Another problem is that CDMA is not yet a nationwide offering. Technology partner IDO Corp. plans to launch CDMA in April in the key market of Tokyo.
CDMA also has suffered major setbacks in China where technical problems in 1998 and the push to remove the army—involved in China Great Wall Network, which has been trialing CDMA—from business activities have delayed commercial launch by more than nine months.
As long as China remains out of the picture, CDMA has little hope of ever breaking GSM's hold in the Asia-Pacific region, say analysts.
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