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CDMA450 threatens universal GSM

Rival finds favour in Eastern Europe

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Internet Security Threat Report 2014

The hegemony of GSM-based networks in Europe is under increasing threat as the established cellular operators struggle to roll out 3G and would-be competitors, including some wireline carriers, eye WiMAX as a route into the mobile data and VoIP sector.

At least mobile WiMAX is still not off the blocks, but now there is a more immediate challenge from CDMA450, a version of CDMA that operates in the 450MHz band. This has scored several wins in Eastern Europe recently, because it offers operators a low-cost and efficient way to unwire larger regions, and provides some disruptive equipment makers with a chance to enter Europe cheaply.

Although CDMA450 - which inhabits the spectrum formerly allocated to analogue Nordic Mobile Telephony systems - has more limited functionality than its cousins in the 850MHz, 1800/1900MHz and 2100MHz bands, its wide cell radius means that it requires up to 80 per cent fewer base stations to cover a given area, making it economical to deploy and particularly suited to scattered rural communities. These advantages have given it obvious appeal for operators seeking to unwire large and relatively undeveloped markets while keeping infrastructure costs low.

Russia is a good example and one of the top three countries targeted by Nokia as sources of growth for its infrastructure and handset businesses in the next few years. But, while the Finnish giant is launching cut-price GSM gear for this region, some cellcos are looking to CDMA. Moscow Cellular Communications and Delta Telecom have both deployed CDMA450 networks from Lucent while UralWestcom is trialling Nortel kit.

This has raised speculation that Nokia, for whom expansion in the overall CDMA space is a key priority for 2004, will itself start to offer CDMA450, especially as Scandinavian countries are now leading a tide of western European interest in the network.

The market is getting crowded - the top four CDMA manufacturers (Lucent, Nortel, Motorola and Ericsson) have all launched gear, as have two Chinese players, Huawei and ZTE.

Huawei sees CDMA450 as a relatively easy route into Europe as it seeks to establish itself in the west in many areas of networking. It has three customers for CDMA450 so far - BelCel of Belarus and JSC Uzbecktelecom in Uzbekistan and, most significantly, Portugal's Inquam, highlighting the potential for the network to penetrate western Europe via the smaller operators.

This is also likely to happen in Scandinavia. The Swedish government is under pressure to auction 450MHz spectrum, in which several operators are interested in running CDMA services, either as a stopgap or alternative to W-CDMA, or as a fill-in technology for rural areas.

Last September, Sweden's regulator, PTS, received 13 letters of interest in response to its proposal to set aside some or all of the 450MHz spectrum for mobile phone services. Tele2 is considering using CDMA2000 in the space, and Vodafone and Hi3G have also expressed interest. Hi3G is the only one of four 3G license holders currently offering W-CDMA services in Sweden.

Tele2 said the bandwidth that could be made available could sit alongside higher-bandwidth 3G transmissions outside populated areas, for instance in the Swedish forests.

Also pointing to the expansion of 450 out of a small niche is the roll-out of the first network using the EV-DO third generation version of CDMA in the 450MHz band. All previous deployments have used the current x1 RTT version. The EV-DO system has been supplied by Nortel to Czech carrier Eurotel Praha and will support data rates up to 500Kbps for a low capital expenditure compared to conventional CDMA or GSM. With its greater power, it solves some of the problems of thin spectrum spread that affect x1 RTT in the 450MHz spectrum and could be particularly valuable in rural regions where there is limited wireline broadband infrastructure.

© Copyright 2004 Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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