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Discuss the trends and implications of wireless technology and its effect on companies/stocks within the sector. Research Highlights from a recent report by Cahners In-Stat Group As Growth of Cellular and PCS Peaks Wireless 3G Gets Underway The wireless communications industry is about to switch gears as subscriber growth becomes focused on digital cellular and PCS technology after 1999. This opens the door to third generation (3G) of wireless communications, a generation which will move the world closer to a global standard for true integration of services, according to a research report from Cahners In-Stat Group. "This signals the start of the next 100 years war," says Ray Jodoin, Cahners In-Stat Group analyst and author of the report. "The third generation is going to move us toward one worldwide standard that allows a user to receive voice and data between any two points. I can be a subscriber in California, traveling in London and taking telephone calls and e-mails from Japan without a third-party bill." According to the Cahners In-Stat research, the fastest future growth will be for Code Division Multiple Access (CDMA), despite the huge market share of the competing Global System for Mobile Communication (GSM) - a market share that Cahners In-Stat Group predicts will be 58 percent in the year 2003. Over the long range, CDMA will grow fastest, followed by Time Division Multiple Access (TDMA) and GSM. Against this background, 3G will begin to emerge because vendors will find revenue growth in offering users integrated communications similar to that which GSM technology provided for European and other users. Meteoric Growth of CDMA The Cahners In-Stat report notes that CDMA would have grown at an even faster rate if it came under an open standard. This will happen as 3G products are produced and distributed. The phenomenal growth of the wireless communications market during the period covered in the Cahners In-Stat report is emphasized by the increase of 100 million subscribers during 1998. This is almost an order of magnitude greater than the growth for the first nine years of cellular service in the U.S. "The third generation will be here in 2001," Jodoin declares. The two prime candidates for the 3G standard will be Wideband-CDMA and Broadband-CDMA otherwise known as cdma-2000. Whatever the winning standard, they will both offer global, seamless communication. "There are already system trials for 3G and the market is ready. Look at the penetration of GSM in Finland. Two years ago people would laugh if you predicted 60 percent market penetration. Today, it's true." The picture is not all rosy. In Italy and some other countries, for instance, airtime charges are being raised despite increased competition and deregulation. Cahners In-Stat Group is also concerned about land-link carriers who might charge wireline customers for calls made to mobile phones. This could intensify as wireless begins to replace - and not merely supplement - tethered phones. This is a second generation phenomenon currently not seen in a wide sampling of markets. But if others follow, it might stymie some of the projected success of Third Generation. | ||||||||||||
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