A 3G Battle : WCDMA vs. CDMA2000

Has the last year's downturn for the wireless industry and delays in 3G fundamentally changed the operator's options for 3G evolution?

Inset is Bengt Nordström, CEO Northstream who is quoted below.

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 Nordström, 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 Nordström.

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 Nordström. - 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