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WCDMA vs. CDMA2000 - a balanced assessment



STOCKHOLM, SWEDEN, Feb 14, 2003 (Canada NewsWire via COMTEX) -- 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 Nordstrom, 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 Nordstrom.

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 Nordstrom. - 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).

For more information please visit us at: www.northstream.se

VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION: http://www.newswire.ca/cgi-bin/inquiry.cgi?OKEY=14865
CONTACT: For further information: Bengt Nordstrom, CEO, Tel: [phone];
Tommy Ljunggren, Public Relations, Manager, Tel: [phone],
press(at)northstream.se

News release via Canada NewsWire, Toronto 416-863-9350 Copyright (C) 2003 CNW, All rights reserved

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KEYWORD: STOCKHOLM, SWEDEN
INDUSTRY KEYWORD: TL