The initial driver for CDMA450 was the urgent need to find a digital replacement for the ageing NMT450 analogue cellular systems that had been widely deployed, not just in the Nordic countries but in many countries in Central and Eastern Europe. Under the onslaught of GSM, NMT subscriber numbers had fallen dramatically. There was very poor handset availability and there were few, if any, NMT equipment vendors.

The first thought was to go for a downbanded GSM solution which would have had considerable benefits in terms of roaming and economies of scale. Unfortunately there was little enthusiasm for GSM450 amongst the GSM vendor community, as the number of potential subscribers was not seen as justifying the time and effort needed to develop 450MHz technology. Only Nokia and Ericsson made any effort to develop GSM450 solutions but both soon withdrew from the market.

Enter CDMA
Anxious to break into GSM’s European heartland, CDMA equipment vendors eagerly accepted the challenge and were quickly in the market touting the benefits of CDMA450. Given the lack of viable alternatives it was hardly surprising that they were immediately successful. Another factor in favour of the technology was its ability to offer 3G-like data services. CDMA450 is a fully standardised downbanded version of the CDMA2000 IMT-2000 family of technologies which means that it can offer the same high data rates that are available with the 850 and 1900MHz CDMA solutions. So, CDMA 1X and CDMA 1X EV-DO are commercially available in the 450MHz band, and CDMA 1X EV-DV is promised for the future.

There was also a competitive market for equipment and terminals for CDMA450. Equipment vendors such as Lucent, Nortel, Ericsson and Alcatel have been joined by major players from Asia such as UTStarcom. Huawei and ZTE, who saw major commercial opportunities in getting in early on this new market. Even more significantly there were at least 11 terminal manufacturers offering (at the time of writing) at least 32 different models.

With some of the oldest NMT450 networks, Eastern Europe was always going to be fertile territory for the new technology and sure enough Europe's, and the world’s, first commercial CDMA 450 1X network was launched in 2003 by Zapp Mobile of Romania. Zapp was quickly followed down the CDMA450 1X route by operators in Russia, Belarus, Georgia, Latvia and Uzbekistan. Then, in 2004, Czech Republic operator Eurotel raised the stakes by launching the first CDMA450 EV-DO network. The data-only service provides a peak user throughput data rate of 2.4Mbits/s which translates into a ‘real world’ data throughput rate of 300 to 800kbits/s with data bursts up to 1.5Mbits/s.

European breakthrough
Western Europe would be the real battlefield for CDMA450 with the GSM community fighting hard to keep this alien technology at bay. The breakthrough came with the decision by CEPT to allow the CDMA technology to be deployed in the 450MHz band. Once the breach was made, a number of administrations backtracked on their opposition and either licensed CDMA450 or started the process of opening up their markets to the technology.

The first Western European CDMA450 deployment was by PAMR operator Inquam in Portugal who, working with Chinese vendor Huawei, plans to deploy a nationwide CDMA450 1X EV-DO network over the next twelve months. This first CDMA450 network is likely to be followed over the next two to three years by deployments of the technology in a number of Western European countries.

In Sweden the regulator Post-och telestyrelsen (PTS) is consulting on the future usage of the 450MHz spectrum and a decision is expected in February 2005. The aim is to find a replacement for the NMT450 system that currently provides the only means of communication for people living in Sweden’s remote areas. The sparse population in these areas makes GSM deployment uneconomic, whereas a CDMA450 system could be cost effectively deployed to bring not just voice but high speed data to these regions.

In Finland, the process is even more advanced. Late last year local operator Nordisk Mobiltelefon and Nortel demonstrated CDMA450 in Tampere. Due to its focus on users in rural areas, Nordisk Mobiltelefon has been established with the aim of complementing existing service providers. In June 2004, the company acquired a spectrum license in Norway to provide communication services on the 450 MHz frequency band. Nordisk Mobiltelefon aims to acquire further spectrum licenses for the 450 MHz band in Sweden and Finland.

The latest development has been in Germany where the regulator, RegTP, issued licences to operate wideband PAMR services to T-Mobile International and Inquam Deutschland. RegTP said the licences, which will be valid until the end of 2020, will allow for the deployment of wideband bundled radio networks and services for corporate communications for the first time on the German market. Given its existing commitment to CDMA450 it seems certain that Inquam will deploy this technology but there are reports that T-Mobile International is considering using an alternative, FLASH OFDM. Siemens recently announced a partnership with US-based Flarion to bring FLASH OFDM to the market and there may be pressure on T-Mobile to adopt this technology.

Amongst the other European countries where the regulators are looking at the future disposition of the 450MHz spectrum are France, Denmark, Moldova, Turkmenistan and Turkey.

CDMA450 is also of interest in countries without a history of NMT450 deployment. There are commercial networks in Indonesia, Vietnam, Laos, Cambodia, Kenya, Ethiopia, Uganda and Nigeria. CDMA450 licences have been issued in Pakistan and there is regulatory activity in Namibia, South Africa and Jamaica.

Market potential
The countries which have attracted the most attention are those with the highest populations and hence the greatest market potential, in particular China, India and Brazil. Over the last few years China’s attention with regard to wireless developments has been largely focused on its home grown 3G technology. TD-SCDMA. In fact, until recently deployment of CDMA450 within China was limited to a few networks in Tibet and some test networks being run by the fixed line operators. Then, in March 2003, the Ministry of Information Industry told China Telecom and China Netcom to turn off their CDMA450 networks.

However, in December 2004, China Telecom, the country’s largest fixed line operator, out of the blue, gave permission for two of its provincial subsidiaries, in Sichuan and Hubei, to start up their CDMA450 networks. At the time, press speculation suggested that this is a step towards giving China Telecom a 3G licence based on CDMA2000, as this would provide a good fit with CDMA450.

In India the regulator, TRAI, has been conducting a consultative process over the future allocation of spectrum, in particular the 450MHz band. Over forty organisations responded to the call for comment, and there was widespread consensus that freeing up this band would enable the delivery of telecommunications services to the many remote areas of India which currently are without communications.

The most exciting recent developments for proponents of CDMA450 have been in Latin America. At the December 2004 meeting of the regional regulatory body CITEL, both Argentina and Brazil strongly supported a proposal for opening up the 450MHz spectrum throughout the continent. At the CITEL meeting in Buenos Aires. Chinese vendor Huawei successfully demonstrated a CDMA450 1X EV-DO system to delegates from a number of Latin American countries.

Future growth
The major advantage of CDMA450 is its low cost of deployment. According to a report from In-Stat/MDR, one CDMA450 base station provides the same coverage as approximately 25 WCDMA base stations. Deploying a CDMA450 network works out at roughly 30% less than an equivalent CDMA800MHz network and approximately 60% less than a CDMA1900MHz network.

Although low deployment costs are one of the compelling reasons why operators are turning to CDMA450, there are other factors, notably the need to go digital. "For NMT450 carriers wishing update their old technology to the latest 3G technology, CDMA450 makes perfect sense, and is perhaps the only solution", comments Allen Nogee, a principal analyst with In-Stat/MDR. A major benefit is that, because CDMA450 uses the same technology as CDMA2000, it has all the features and data speeds of its parent, although CDMA450 accounts for less than one-tenth of 1% of the total worldwide subscriber base. "Had another technology been used in the 450MHz band that was not aligned with a major technology such as CDMA is, it would be much more difficult, if not impossible to have technology as advanced with such a small number of total subscribers", says Nogee.

However, the path to success for CDMA450 has some pitfalls. Analysts EMC have identified the single most important factor limiting the technology as the high cost of terminals. A recent report from EMC said that "while the scalability of CDMA-450 networks means that a new operator can launch CDMA-450 with comparatively few base stations and hence a low CAPEX, this cannot be translated into a low subscriber entry cost while terminal costs remain high. Prices are unlikely to come down significantly unless the major vendors commit to CDMA-450 and production volumes are expanded. The conundrum is that such a commitment, which would in itself stimulate the market, is unlikely to be made unless or until the market is already perceived to have sufficient potential for growth to make it worth the vendors' while".

The key, says EMC, is China. If Chinese operators are allowed to deploy CDMA450 networks, the huge new subscriber base that would open up would push the technology past critical mass, driving down terminal costs and bringing CDMA450 to the forefront of the world market.
Ian Channing