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WCDMA x CDMA 2000?

Posted on 20-Feb-2003 21:04 | Filed under: News

Has the last year's downturn for the wireless industry and delays in 3G fundamentally changed the operator's options for 3G evolution? In a new report "Operator Options for 3G Evolution" leading wireless advisor Northstream gives an independent view on the hot topic of operators' choice between the two rivalling technologies WCDMA and CDMA2000. According to the Northstream analysis WCDMA will be the dominant 3G technology in the long term, mainly because of the fact that operators in the dominating GSM-network already have or will opt for WCDMA.

The report gives Northstream's independent view on the matter, assessing GSM, CDMA and TDMA operator technology evolution options to WCDMA or CDMA2000. -- We have tried to cast the pride and prejudices aside when analysing this controversial issue, says Bengt Nordstroem, CEO of Northstream. We have made use of a few key observations, central to our view of the matter but not always acknowledged by all parties discussing technology evolution. With these observations in mind, we can more easily distinguish relevant facts from over-simplistic or invalid arguments, all of which exist in the current evolution discussion. -- A technology evolution path decision should be driven by the future profitability impact that the decision will have: with which technology can the operator maximise his future revenue. Which path requires least additional investment, considering the legacy situation? -- A technology evolution path decision is a long-term decision. Because a technology generation shift is generally very expensive it cannot be done often and therefore it is irrelevant what is gained in the short term if the 5-10 year profitability impact is negative. -- Bad services do not mean bad networks technology. The introduction of data services decouples the service offering from the network technology. This means that an operator can easily fail to offer compelling services despite having an excellent underlying network technology. -- Higher data rates as such are not a main driver for data services uptake. The services envisaged for mass-market adoption of mobile data are typically not data rate demanding. -- We conclude that GSM operators generally will choose the WCDMA evolution path, says Bengt Nordstroem. According to the report, investment reusability, gradual investments, simpler service migration, more attractive services (primarily roaming) and a better long-term terminal market, combine to make this decision rather simple. GSM operators who face difficulties to find spectrum for a WCDMA deployment, for example in North America, should rather use EDGE as bridging technology until spectrum for WCDMA becomes available, than choosing a CDMA2000 evolution.

For CdmaOne operators the generally preferable path is to evolve its network to CDMA2000 1X (which has similar service-enabling capabilities to GPRS) and then on to DO and/or DV. Spectrum availability, investment reusability, gradual investments, simpler service migration and lack of CDMA/WCDMA terminals, combine to make this a straight-forward decision.

For a TDMA operator we view both WCDMA- and CDMA-based evolution paths as feasible. High economies-of-scale, more attractive services (primarily roaming) and a more attractive long term terminals market all speak for WCDMA. Against these factors stand the prospects of simpler spectrum management, gradual investments enabled by AMPS/CDMA terminals and higher investment reusability, which speak in favour of CDMA2000. Whichever option is adopted the TDMA operators will have to make sure they have the solid backing of its suppliers to provide them with confidence in making this difficult decision. - An overall conclusion is that GSM/GPRS will continue to dominate the global market for years to come, says Bengt Nordstroem. WCDMA will be the dominant 3G technology in the long term, considering the dominance of existing 3G networks and already made decisions on GSM-to-WCDMA evolution. The full report can be downloaded from

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