The Battle for Market (Sh)Air
Which digital cellular service is best for your company?
-By William P. Flanagan
There's a battle being waged over the airwaves every day. At the heart of the conflict are your cell phone and the technologies it uses to provide service. Three types of digital phone standards - CDMA, GSM and TDMA - are fighting for dominance in a market once controlled by the analog cellular, or Advanced Mobile Phone Service (AMPS), system. Every time someone buys a wireless phone, another blow is landed for one side or another. And the people on the front lines, the customers, might not even know they're combatants.
For many years, analog service offered the widest coverage in the United States, including rural areas and highways. Its reliability and the quality of its calls, however, are limited in comparison to digital service, and analog service lacks the features packaged with digital service, such as caller ID, call waiting, call forwarding and voice mail. Furthermore, analog service is no longer guaranteed to be cheaper than digital. According to a January study on wireless pricing trends by The Yankee Group, a market-research firm based in Boston, MA, analog prices have significantly increased for those who use the service the most. For example, the study shows that at 250 minutes of use (MOU) per month, digital service is nearly 40 percent cheaper than analog cellular service.
That said, the most remote and rural areas will still require analog service for some time to come, because digital coverage in these areas is spotty at best. Buying a dual-mode phone - one that supports analog and digital connections - may make the most sense for people who frequently travel to remote locations.
Analog is on the decline, however, because most metropolitan areas are now covered by at least one of the three digital standards. In fact, 1998 marked the first year that sales of digital handsets surpassed those of analog.
The Players
In the past, when you purchased phone service, you probably made a conscious decision to go with either analog or digital. If you chose digital, you probably weren't aware of which side you had joined in the battle. Analog service resides on the 800MHz band, which quickly approached capacity.
Code Division Multiple Access (CDMA) and Time Division Multiple Access (TDMA) also can operate on this frequency without interfering with analog service. GSM, or the Global System for Mobile communications, does not. In 1994, the FCC opened a band to accommodate growing digital service (also called Personal Communications System, or PCS, which encompasses CDMA, GSM and TDMA) at the 1,900MHz frequency. All three digital technologies operate on this higher frequency.
Unlike in Europe where the goal was to settle on a continent wide standard — GSM — the goal in the States has been to foster competition. Here at home, the 1,900MHz frequency was put up for auction, with densely populated areas costing more. Metropolitan areas were quickly bought up, leaving a number of less-populated areas without digital coverage.
TDMA, CDMA and GSM (a variant of TDMA technology) are incompatible. The difference is in how each technology divides the 1,900MHz frequency to get the most number of calls across the band.
TDMA technology divides the frequency bands available to it into time slots. Allocating time slots allows a number of users to access a single radio frequency channel. Supporters of this technology include AT&T, BellSouth Corp., Ericsson and Nextel Communications.
Instead of dividing the frequency into channels or time slots, CDMA uses spread-spectrum technology to give each user a code within the same spectrum. In this way, multiple frequencies can be used simultaneously. The technology was developed by the security-conscious Armed Forces, but it's been pushed commercially by Qualcomm. It can be found in service provided by companies like Sprint PCS and AirTouch Communications.
GSM is based on TDMA, but it was developed in Europe as a standard for seamless roaming from country to country. GSM was introduced commercially in the States in 1996, and it is the only one of the three technologies reviewed here that — with the right handset — can roam North America and Europe as well as parts of Asia. Omnipoint Communications and Pacific Bell are among the largest supporters of this technology in America.
Territorial Imperatives
The Yankee Group estimates that the number of global mobile telephony subscribers will grow to 529 million by 2002, an increase of more than 25 percent from 1995. The increase is triple the figure estimated for the growth of global landline subscriptions. This unabated growth has forced the proponents of each digital technology to fight on a global scale for market share.
Of the three, GSM has by far the largest global market share, due in large part to the fact that it is the European standard. According to a 1998 study on global trends of cellular/PCS markets by The Yankee Group, TDMA has the largest market share in the United States. GartnerGroup's Dataquest of San Jose, CA, reports that sales of TDMA handsets are growing faster than CDMA and GSM in terms of units sold and percentage increase.
Although CDMA makes the most effective use of 1,900MHz frequency, managing to accommodate about three times the number of calls of the other digital technologies, it was the last technology on the market and faces an uphill battle in increasing its share of the pie. The Yankee Group study also forecast that because of its introduction into Asian markets, CDMA — not TDMA — would gain the upper hand globally by 2002. China, the study stated, is the wildcard that will determine whether CDMA becomes a global wireless standard on the scale of GSM.
An interoperability agreement signed in February by the GSM Alliance and the Universal Wireless Communications Consortium (UWCC) will make CDMA's battle for market share that much more difficult. The GSM Alliance is a group of U.S. and Canadian digital wireless PCS carriers that are working together to further the deployment of GSM. The UWCC comprises more than 100 telecommunications carriers and vendors of wireless products and services dedicated to supporting TDMA internationally. Member companies represent countries ranging from all parts of the world, ranging the Americas to Russia and the Middle East.
Cellular Convergence
The agreement between the two organizations will provide customers with access to the combined networks of the two largest wireless digital technologies — GSM and TDMA. "The major benefits of this landmark agreement are threefold," says Bob Stapleton, president of Western Wireless, a member of the GSM Alliance. "It will create a global footprint, enable a fully integrated feature set of services across the two technologies and provide a cost-effective way to meet the requirements of both customers and operators."
Our goal in this comparison report is to identify the best cellular system for mobile employees. By testing the top digital networks in three major U.S. cities — New York, Chicago and Los Angeles — using AMPS as a baseline, our series of tests is designed to measure data throughput, voice quality and network availability.
Although there are several carriers that provide CDMA, GSM and TDMA services, in order to limit the number of variants in testing, we looked for carriers that offer service (or support roaming) in all three cities. While this was possible for CDMA and TDMA, GSM was not yet available in the Chicago area. An auction for licenses was scheduled for the end of March, though, so GSM service may not be far off in the Windy City. Our CDMA coverage was provided by Sprint PCS, which supplied us with three Samsung SCH-2000 phones. TDMA service was set up with Nextel Communications using the Motorola iDEN i1000 phones. Finally, Omnipoint Communications provided our GSM coverage in New York and Los Angeles with three Siemens S12 phones.
Our testing comprised two phases: Phase one entailed making a set number of calls at set times to a set location. We tested connect rates and connection time as well as the quality of each phone's earpiece and microphone. Phase two was handled in New York at Mobile Labs. Here we tested the sound quality of each phone using a digital recorder, a voice modem, messaging software to receive the calls, and voice and analysis software to assess call quality. Using the resulting sequence samples, recorded in WAV files available to download at www.mobilecomputing.com, you can to listen to and see how the services sound. Ironically, landline service was vastly inferior to the mobile services.
Upon completion of our testing — and after much discussion — we decided to refrain from designating a First Class Award winner. While all three digital cellular technologies are clearly better than analog cellular service, we did not feel that any one outshone the others. The choice of a digital cellular service, therefore, should be based on a corporation's particular needs.
Regional vs. National
For instance, TDMA would be the choice for frequent domestic fliers because of its wide availability. At the same time, however, TDMA does not seem to take full advantage of the frequency allotted to it, and in our tests it proved no better than the others. CDMA would be a good choice for regional coverage, and it makes the best use of the frequency by handling more conversations per channel than the other two technologies, but it did not differentiate itself from the others enough in our tests to earn a First Class Award. GSM cannot compete with CDMA and TDMA in North America at this time, because it is not as widely deployed. From a global standpoint, though, it is the technology of choice.
The wireless service you choose should be readily available, and the technology behind it should be invisible to you. Undoubtedly, you'll notice the difference in the time it takes to connect and the quality of the connection when you use an analog phone. Depending on your location, however, connection times using digital technologies are competitive, as is the quality of the calls.
This doesn't mean you should purchase a service blindly. What we try to provide you with in this report is information — ammunition if you will — that will allow you to purchase the most effective digital service in the area(s) in which you live, work and travel.
Armed with such a variety of information, we hope you won't shoot yourself in the foot when signing up with a digital carrier.
Sprint: Code Division Multiple Access (CDMA)
Omnipoint: Global System for Mobile Communications (GSM)
Nextel: Time D
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