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WCDMA
vs. CDMA2000 - A Balanced Assessment
STOCKHOLM,
Sweden, Feb 14, 2003 - 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 maximize 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 straightforward 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
www.northstream.se
Meet us in Cannes at the 3GSM
World Congress, Hall 2 stand F57 and Hospitality Suite
301 and 303, or follow the event through live updates at
www.northstream.se.
About Northstream:
Northstream provides strategic technology and
business advice to the global wireless industry.
Northstream has assembled a multinational team with some
of the world's best experts and analysts on wireless
communication business and technology.
Northstream's list of clients include several of
the world's leading operators and system suppliers, e.g.
Vodafone, AT&T, NTT DoCoMo, SK Telecom, Orange,
Sonera, Telia, Mitsubishi, Ericsson, Nokia, Lucent and
Microsoft, as well as some of the leading investment
banks and financial institutions. Northstream is
established in Stockholm (Sweden), Sophia Antipolis
(France) and Tokyo (Japan).
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