However, new resolve by the CDMA Development Group (CDG) to flag up the service technology’s gains to date are helping to stir awareness of the technology’s early success stories in Europe and in developing markets, as well as generating new business cases for CDMA450 as a ‘stepping stone’ to 3G and a replacement for TETRA public emergency services.
Early in 2003, the total number of CDMA450 pilots, build-outs or commercial service deployments globally amounted to less than five, but since then that number has grown to over 100 operators in 60 markets worldwide, from
China to
Argentina, according to the CDG. Of that number, 67 operators are currently providing a commercial service to a collective 112 million people, with trials or early roll-outs happening in a further 24 markets.
“Several years ago, CDMA450 emerged as a viable voice and data solution for emerging markets,” said Peter Jarich, principal analyst wireless infrastructure at Current Analysis. “But today, with the support of vendors like Lucent, Huawei and Nortel, its credibility has been proven. Handset availability and capacity issues remain, particularly when launching large cells with limited spectrum assets. But market momentum ensures that competition from other technologies – GSM450, TD-CDMA, Flash-OFDM – will remain limited and device issues should eventually be solved,” he added.
In its simplest guise, CDMA450 is part of the CDMA2000 family of air interface protocols operating in the often under-utilized 450MHz band. According to Perry LaForge, executive director of the CDMA Development Group, CDMA450 has now proven its mettle as a competitive solution for affordable voice and broadband data services in emerging markets where its key strengths are undoubtedly superior propagation and reach per access point. In addition, CDMA 450 is also proving to be a flexible launch paid for alternative technologies – from EV-DO to Flash OFDM and even UMB – and this is creating a fair level of choice in the market.
Substantially lower costs
For mobile operators, the key argument for a CDMA450 service deployment is substantially lower CAPEX and roll-out costs. Back in 2004, Nortel’s then-CEO William Owens excited the industry by claiming that CDMA450 infrastructure costs represent one tenth of that of a standard CDMA1900 network build, with towers and equipment able to transmit over twice the distance of a standard tower.
Although time and technology has moved on since then, the spectrum’s performance, particularly in regards to the coverage of vast geographical swathes of land at low-cost, remains impressive. According to Luciano Splendoini, senior development director at Qualcomm, deployment in the 450MHz band allows a single base station to cover 50 square kilometers, regardless of technology used. A 5,000 kilometers squared area can be addressed with a base station rollout of just 38 access points. To put that into perspective, a UMTS roll out in the standard 2.1GHz band would require something close to 3,800 base stations to cover the same area, Splendoini estimates.
“There is no question that the 450MHz band is simply a fantastic piece of spectrum,” he says. He adds that Eurotel’s decision to go with CDMA450 back in 2004 goes a long way to explaining the reason why O2 Czech Republic is still many years ahead of other European operators in the provision of wireless data services today.
More than a niche proposition
The idea that CDMA450 can be considered useful merely as a niche proposition for emerging markets, and only commercially successful only within non-competitive environments as a ‘sole available option’ for mobile data communications to remote, rural locations, has been neatly proven otherwise by Telefonica O2 Czech Republic, say many industry insiders.
In 2004, O2 Czech Republic – then Eurotel Praha – unveiled the industry’s first CDMA2000 1xEV-DO network on the 450MHz band in tandem with Nortel, and this deployment is now considered to be one of the technology’s most notable success stories. By end-year 2006, O2 Czech Republic reported 94,000 CDMA-based subscribers, an increase of 34.3 per cent year-on-year and, significantly, a larger number than those customers signed up for GPRS services. But most importantly, the operator experienced this growth within a highly competitive market housing multiple broadband data options, both fixed and wireless.
In the
Czech
Republic, the O2 service competes alongside growing ADSL penetration, as well as a range of other wireless options (such as
T-Mobile
Czech
Republic’s UMTS TD-CDMA and EDGE networks. As a provider of ADSL itself, O2 Czech Republic is increasingly positioning its CDMA service as a wireless complement to its own ADSL portfolio, which it is looking to boost substantially this year in terms of speed choice and availability.
A stepping stone to 3G
In the early years of CDMA450 several vendors – Qualcomm and Nortel among them – put out the view that the technology could also be useful as a ‘stepping stone’ or evolution technology towards faster 3G service adoption. At the time, many industry analysts voiced scepticism of this view, questioning the technology’s ability to nurture a demand for faster download data services in emerging markets with a poor revenue opportunity. However, at least one operator, Sky Link in
Russia, is proving early vendor assertions right. The operator is planning to implement a 2.1GHz UMTS network in
Moscow and
St Petersburg to give its city subscribers a faster download service to complement its core, nationwide CDMA450 deployment for voice and data which stretches across 65 regions of the
Russian Federation.
According to Sky Link’s general director for strategic marketing and sales Alexander Pilotrovsky,
Moscow and
St. Petersburg both house a poorly addressed ‘premium’ sector currently unhappy with the speeds and performance of GPRS and EDGE, and Sky Link is positioning new products to a potential target of 600,000 in
Moscow alone.
Nordic Case Study
The appearance of CDMA450 trials and commercial services in the Nordics – easily the most mature and progressive mobile region in
Europe – is also causing the industry to take a fresh look at the technology.
Service provider Nordisk Mobiltelefon NMT currently holds 450MHz licenses in Norway, Sweden and Denmark, and is already offering a EV-DO mobile broadband service in Norway (launched October 2006) and Sweden (launched in February 2007), with 12,000 customers to date in Norway. According to Johan Lodenius, VP marketing and product management, CDMA450’s vastly more economical reach means that the operator can budget for a full build-out (reaching 80 per cent of the population of both markets) with just 350 sites per market. Lodenius estimates that Nordisk will achieve full build-out within both markets by this summer, providing a faster and more consistent network coverage than UMTS competitors currently offer.
“
Sweden is definitely one of the most mature and built-out UMTS markets in the world, but still, as soon as the end-user moves outside of one of the main cities, he’s down to relying on GPRS or EDGE, which is just not acceptable,” Lodenius says.
Nordisk is also a key proponent of CDMA450 as a more appropriate, multi-media ready and economic technology for multi-service public safety networks than legacy TETRA systems, with better vendor backing and therefore a guaranteed evolution path to enhanced chipsets and terminals.
At present, Nordisk is running a number of trials and pilots with emergency service providers in
Sweden and
Denmark, as well as with private security, forestry and utility sector service units, but has yet to strike its first commercial contract for CDMA450 as a replacement for TETRA.
“It’s just a matter of time,” says Lodenius, adding that one of the outcomes of the Asian tsunami was a Swedish public safety survey in
Sweden which pointed up a clear need for multimedia services able to communicate from localized disasters in near-real time. “This was something that was not even talked about 15-17 years ago when TETRA was first initiated. TETRA is a very, very expensive network, dedicated for a few users, and it is now outdated.”
Handsets – always an issue
According to Andrew Gilbert, Qualcomm’s European president, the single largest hurdle to the development of the CDMA450 market is the relatively low availability and high cost of devices. To this end, the CDG, together with the International 450 Association and a number of mobile operators have created an alliance to aggregate purchases in a bid to drive down costs via volumes and nurture a market for entry-level devices.
At present, laptop data card providers have been faster at provisioning hardware for CDMA450 than handset manufacturers, and this has restricted voice device choice in markets such as
Norway,
Russia and the
Czech Republic. Some operators have taken matters into their own hands.
Sweden’s Nordisk, for example, decided to design, customize and build four models of their own, outsourcing production to
Asia. According to Nordisk’s Lodenius, this has enabled the company to leverage device customization benefits which will allow the service provider to differentiate its services to a higher degree going forward.
But service providers and members of the CDG agree that volumes will start picking up as large markets such as
Mexico,
India and
China start putting in mass orders.
Overall, CDMA450, a technology more or less written off as niche four years ago is looking likely to claim its own place in the limelight as its manifest benefits become more widely appreciated.
