Subject: [NEXTEL-1] WCDMA vs. CDMA2000 - A Balanced Assessment

From: Marcel <[email-masked]>
Date: Sun, 16 Feb 2003 18:34:53 -0500

WCDMA vs. CDMA2000 - A Balanced Assessment

STOCKHOLM, Sweden, Feb. 14 /PRNewswire/ -- 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

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