Sprint PCS Announces Nationwide Summer 3G Rollout: Advantage - CDMA 1X  |
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Download Click here to download this document (PDF file) SA INSIGHT Snapshot Analysis Whereas Japan ’s foremost W-CDMA system,branded by NTT DoCoMo as “FOMA ”(Freedom of Mobile Access), was prone to a number of well publicized setbacks in 2001 before activating commercial service on October 1st (with limited throughput),nearly a million Koreans were using 1X on that date.In fact,during NTT ’s late April “eleventh-hour ”declaration that they would delay FOMA ’s much anticipated launch due to the need for an additional five months of testing,not one but three Korean network operators were benefiting from the voice capacity gains of CDMA 1X and offering peak data rates of 153kbps to their users on handsets that averaged only 88 grams in weight – many with color displays. By exceeding the 144 kbps peak throughput threshold for 3G (as defined by the ITU),real 3G competition was alive and well in Korea while 3G/UMTS launch expectations in all other corners of the globe were being dashed. To be clear though,in order to qualify as a viable 3G technology (officially or unofficially)working handsets and terminals must exist and be available. Korea has an estimated 3.6 million1 CDMA2000 1x handsets in circulation today offering both voice and 153 kbps peak data rates.Indeed,in the case of Korea we do not we see a lonely network waiting for devices to run on it. This is in dramatic contrast to the situation in the GSM world.Strategy Analytics fully expects a similar 1X scenario to be replicated in the US market by 2003 as corroborated by Sprint PCS ’s investment in CDMA2000 and most recently their announcement to achieve 1X coverage in all of their US markets this summer.The answer is that there will be no shortage of 1X ready devices.This is principally due to the ease with which handset vendors can implement 1X and 1X Evolution variants from a design resources perspective,and the fact that the voice capacity gains speak to the “here and now ”voice QoS and growth target motivations of carriers.This represents an eminently logical and ultimately more successful approach to seeding the market for data services in our view. There are in the neighborhood of 60 1X devices that are commercially available in the world today.In the US Sprint is already offering three 1X handsets (two from Sanyo and one from Kyocera)with many more models planned for US shelves in 20022 .Indeed,Strategy Analytics expects 1X to be standard on all but the most entry- level phones in just a few short years. 1X is delivering globally on its vision while the GSM community ’s great hope of GPRS as an interim solution to whet users appetites for data services continues to be stalled by under performing technology and a lack of devices. From a network migration standpoint CDMA2000 offers a relatively painless and more cost-effective data overlay for IS-95 operators and an increasingly attractive option for time division based carriers to evaluate.While AT&T and Cingular are migrating from TDMA to GSM/GPRS,there remain question marks over the roadmap that other TDMA operators will take,particularly in the CALA region.1X is operational in Korea and Japan and has made significant strides in China and the CALA region.Moreover,with Qualcomm making strategic investments for CDMA2000 technology in Australia,most recently India,and elsewhere,1X is in good stead to be promoted not only as a mobile voice/data solution,but also for fixed and WLL implementations. In contrast to GPRS,CDMA 1X is doing a better job of delivering on its performance promises with peak rates of 153kbps and average rates reported in Korea of 70 –90 kbps.A software upgrade facilitating nominal 1X data rates in the range of 307 kbps is also in the works for a number of deployments.In stark contrast, GPRS continues to struggle with average data rates of 20 kbps and often only peaking at 40 kbps. The peak3 and realistic4 data rates of GPRS,EDGE (EGPRS),W-CDMA,1X and 1X EV-DO are depicted in the table below. Comparison of Peak and Average Data Rates (in Kilobits Per Second)
Source:Strategy Analytics The complexity of the GSM/WCDMA path has been understated and there are strong concerns that although theoretically capable of data rates of 115 kbps plus,GPRS will fail to deliver above 40 kbps while W-CDMA will, initially at least,be limited to 64 kbps.In fact,the problems with GPRS and the expected performance gap for EDGE and WCDMA against a backdrop of heavy spectrum debt,is raising concerns about the ability of migrated GSM networks to support the rich media content that is critical to sustain revenue growth in saturated Western European markets. In terms of user throughput expectations,1X offers considerably better throughput than a “dial-up ”baseline expectation of 56.6 kbps,while GPRS is closer to 28.8 kbps (both of course offer the benefits of packet data). In terms of voice,1X offers significant voice capacity improvements while GPRS offers no help for strained GSM networks.Its spectral efficiencies notwithstanding,1X in many instances represents an easier and potentially more cost effective solution.Given the delays and disappointment with GPRS to date and the current scramble for spectrum,might we see some GSM operators opt for a more proven 1X route?Depending largely on the momentum of 3G multi-mode chipsets,this may represent an increasingly viable option for even more geographically and politically bound GSM operators. Implications The CDMA 1X route has established a firm lead and represents
a viable and in some cases compelling alternative for TDMA
operators who need a future path and even some GSM operators
who want to ramp up.CDMA 1X operators in the Americas are
on track to alleviate the dropped call and increasingly dismal
incoming call completion rates that are giving the industry
a black eye as well as enjoy a lead in the short-term deployment
and commercialization of next generation services.However,technophiles
must continuously subject themselves to a reality check:Customers
don't care about technologies and acronyms -but Strategy Analytics
end user research clearly indicates that they do care about
performance in their overall mobile internet experience.Factors
such as Analyst: Cliff Raskind,email:craskind@strategyanalytics.com,tel.:+1 617 614 0707 Other Contacts: David Kerr,email:dkerr@strategyanalytics.com,tel.:+1 262 646 8974 US Headquarters: European Headquarters:
1 At the end of Dec 2001 SK Telecom and KT Freetel reported 2,681,000 and 700,000 1X users,respectively.For the month ended Nov 2001, LG Telecom reported 157,000 1X users.Our estimate of 3.57 million assumes LG ’s 1X installed base grew to 190,000 by the year ’ s end. 2 Models for the US market include LG ’s TM 5250,TM 910 (1Q ’02),VX1 and VX10 (1H ’02).Sanyo ’s 5150 (available),Kyocera ’s 2225 and 2235 (Q1-2 ’02),Samsung ’s N350/370 (Vol.in Q1 ’ 02))and A450 (1H 2002),Audiovox ’s CDM 9150,CDM 8150 (1Q ’02)and GPS-enabled 9155GPX (1Q ’02)and Sony/Ericsson ’s T60c POP3 email (available) 3 Nominal “peak ” data rates are stated in terms of maximum expected peak data rates for users on minimally loaded networks..Theoretical maximum data rates attainable in unrealistic controlled conditions are not provided in this table (i.e.GPRS ’s 172.2 kbps and EDGE ’s 473.6 kbps are theoretical maximum data rates requiring the utilization of eight timeslots.This would not realistically occur outside of lab conditions given spectral utilization,battery drain and heat dissipation.) 4 There is no widely agreed upon standard to “normalize ” RAN comparisons using various loading factors..SA determined “Realistic ” data rates based on inputs from multiple sources and real life examples where available.*All data in Bits/Sec/Hz/Sector column sourced from Qualcomm
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