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Industry News

CDMA Leads the Pack in the Race to 2.5G and 3G Networks

November 1, 2002
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The race to deploy more advanced wireless networks is in high gear in North America, with next generation CDMA networks currently leading, says Allied Business Intelligence (ABI).


While both TDMA/ GSM and CDMA operators have picked up the pace in recent months, it is the CDMA operators who currently dominate this closely watched race. Extensive 2.5G coverage now exists in both the US and Canada for more than 55 million CDMA subscribers in the region.

While CDMA2000 1X technology allows operators to roughly double voice capacity and provide a theoretical data rate of 144 kbps, the GSM operators should not be discounted just yet. Despite the arduous transition from TDMA to GSM/GPRS, the next step for many North American GSM operators is EDGE technology, a much less complex transition. EDGE offers data rates more than double that of CDMA2000 1X. Of course, the CDMA camp has their answer to EDGE technology with higher evolutions of CDMA2000. This constant jockeying for dominance has heightened the awareness of both investors and consumers alike as they have become increasingly interested in observing the evolution of wireless technology.

"In North America, CDMA is clearly ahead, benefiting from its easier upgrade path from 2G. However, we cannot discount the enormous presence of GSM/GPRS networks in the rest of the world. In the end, spending on upgrading these networks to WCDMA will dominate total 3G investments over the next five years. It's important to differentiate between first deployed and total deployed," declares ABI senior analyst Edward Rerisi. He adds, "That said, we are still closely examining the situation in Europe for signs of a further delay in WCDMA."

In the end, the consumer will likely win as 3G coverage begins to proliferate worldwide. Despite the current lead of CDMA networks in the race to 3G, those based upon GSM technology will likely become more ubiquitous. In a new study by ABI, findings indicate that spending on GSM-based 3G networks, or WCDMA, will far exceed that of CDMA-based networks. The report, entitled "Wireless Base Stations: Global Deployment & Revenues for 2G, 2.5G and 3G Systems," reveals that WCDMA spending will represent a staggering 78 percent of total 3G investments over the next five years. Note that ABI considers CDMA2000 1X a 2.5G technology. Updated information on 3G developments will be available from ABI in first quarter of 2003 as part of the Wireless Base Station study.

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