3G achieves global reach with CDMA

by Perry M. LaForge
Executive Director, CDMA Development Group

CDMA2000: More than 100 million subscribers and growing

At the end of June 2004, over 112 million people across all continents used CDMA2000^® technology to make voice calls or to access the Internet and advanced data services. This gives the wireless industry a historic milestone to celebrate. CDMA2000, as the first IMT-2000 technology to be deployed and to offer broadband wireless services, is a good foundation for discussing the promise of third-generation (3G) mobile communications: that of providing an unprecedented level of voice and data services that can be used anytime, anywhere, by anyone.

In October 2000, SK Telecom and LG Telecom of the Republic of Korea pioneered the introduction of 3G networks using the CDMA2000 1X standard. By August 2004, there were 98 networks providing commercial 3G CDMA2000 services to more than 112.6 million customers in 46 countries around the world (see map and chart).

CDMA2000 users account for 96 per cent of all 3G subscribers worldwide and the customer base is increasing at the rate of more than 4.6 million new subscribers per month. This growth rate is expected to continue for several more years. According to the Yankee Group, CDMA2000 will have 290 million users in 2008. Of these users, 121 million (or 42 per cent) are expected to subscribe to CDMA2000 broadband wireless technologies: 1xEV-DO (evolution-data optimized) and 1xEV-DV (evolution-data and voice).

Initially deployed in Asia, 73 per cent of the CDMA2000 networks now operate in other regions, with Latin America and the Caribbean having the greatest number deployed. The use of CDMA2000 is also expanding rapidly in the world’s two largest markets, China and India, and it is now being deployed in Europe. CDMA2000 1X and its broadband evolution, 1xEV-DO, support the most advanced data services on the cellular market today. For example, CDMA2000 1xEV-DO, with its 300–600 kbit/s average throughput and 2.4 Mbit/s peak data speeds, enables operators to offer innovative multimedia services and broadband access to the Internet. Customers are using their phones to watch videos and live streaming news, to send and receive video mail, and for picture messaging, banking and e-commerce.

CDMA2000 1xEV-DV, offering simultaneous voice and data at peak speeds of 3.1 Mbit/s, will continue the evolution of CDMA2000 3G services. The Republic of Korea, which has the “world’s most extensive CDMA2000 1x EV-DO network,” according to the latest ITU Report: The Portable Internet, launched at ITU TELECOM ASIA 2004, is expected to see the first 1xEV-DV offering later this year.

Innovative services, handsets and devices

The adoption of innovative services is already driving rapid development of handsets and devices. Today, more than 650 CDMA2000 devices are on the market, including 86 1xEV-DO models. The devices are manufactured by more than 56 vendors, and range from low-cost phones to high-end devices with advanced functionality.

This is good for consumers, because the great quantity and wide variety of devices provides something for everyone at a range of price points. It is good for operators because it expands opportunities to differentiate services for various market segments, and it is good for handset manufacturers, because they will benefit from the continuing demand for innovative devices that new applications and services create.

CDMA2000 has demonstrated that it serves operators’ business interests by enabling them to deploy services and applications that attract new customers, reduce churn rates, create new market opportunities and increase revenues. As voice, even wireless voice, becomes increasingly commoditized, operators look to the 3G data service offerings to enhance their individual business cases. One recent example of how operators are gaining market advantage with the technology is Verizon Wireless in the United States, which reported that it gained an industry record 1.5 million customers in the second quarter of 2004, while dropping its churn rate from 1.7 per cent to 1.45 per cent and posting a 25 per cent increase in total revenues. [1]

 In Japan, KDDI had amassed more than 15 million 3G subscribers as of August 2004, just over two years after its entry into the 3G market in April 2002. The company attributes this achievement to its CDMA2000 1X and 1xEV-DO services that enable it to offer market-differentiating advanced broadband content and innovative handsets. [2]

One of the most popular services being offered by CDMA2000 operators on their 1X and 1xEV-DO networks is “push-to-talk”, which allows users to engage in immediate communication with one or more people. Push-to-talk over cellular (also known as PoC) is expected to lead to a variety of other “push-to” features such as instant conferencing and instant voice messaging.

Sierra Wireless

The service has broad applicability within both the consumer and enterprise sectors, as well as for public safety and government use. A number of handsets are already available with pushto-talk functionality, and more are expected to enter the market soon. 3G data services are noticeably increasing operators’ average revenues per user (ARPU). The CDMA experience in the Republic of Korea is a good example of this. There, operators have reported a five-fold increase in data ARPU with 1X compared to 2G cdmaOne™. They have tripled their overall ARPU with 1xEV-DO compared to 1X, and doubled their data ARPU with 1xEV-DO compared to 1X.

CDMA2000 technologies operate in a variety of frequency bands (450, 800, 1700, 1900 and 2100 MHz) and can therefore support the varying needs of wireless operators around the world. A prime example is the 450 MHz band, where CDMA2000 is the only 3G wireless technology commercially available. In this band, CDMA2000 has become an exciting option for operators across Asia and in Eastern and Central Europe to deploy 3G services cost-effectively and in a spectrally efficient manner. And it gives analogue NMT-450 operators a thirtyfold increase in network capacity, enabling them to serve a larger number of users within their existing spectrum.

CDMA2000 also gives operators a new means of delivering both voice and broadband Internet services to previously underserved markets, particularly those in developing countries, offering a great opportunity to increase global access to telecommunications. In many developing countries without existing wireline infrastructure, CDMA2000 at 450 MHz is proving to be a particularly effective and efficient way for operators to meet their universal access obligations. It is expected to enhance the lives of many in rural and underdeveloped areas, providing affordable access to telephones and the Internet where there was no access previously.

The future of 3G and CDMA

As the breadth of deployments indicates, CDMA2000 is already a mature technology, yet it is designed to have ongoing flexibility to advance in sophistication as operators have need for new capabilities. CDMA is expected to become the dominant wireless platform worldwide in the next five to six years as W-CDMA (which is also based on CDMA) and CDMA2000 take market leadership from second-generation GSM. The Yankee Group forecasts that by 2008, some 735 million subscribers (or nearly 40 per cent of the global market) will use 3G technologies. Of these subscribers, 628 million (or 85 per cent) will use CDMA-based 3G technologies. [3]

The next challenge: Delivering on the anytime, anywhere promise

While we believe that CDMA will be the dominant platform, it will coexist with other technologies. Creating a world of networks and services that can deliver the anytime, anywhere promise will require a substantial, industry wide effort to standardize and implement technologies that will allow customers to seamlessly access information and communicate via any device.

According to the architecture planned for next generation systems, networks will standardize around an all-IP core and allow use of a variety of radio-access technologies in interoperable fashion so that consumers will be able to enjoy a common set of services regardless of the technology platform used. The architecture will bring in 2G, Wi-Fi, mesh networks and other technologies to provide not just high-speed multimedia services to stationary and mobile wireless users, but machine-to-machine communications as well.

The industry is already beginning to meet these needs in several ways. Many operators have begun migrating to all-IP networks. New multi-mode, multi-band, multi-network chipsets are available now to allow inter-standard roaming between networks, facilitating the manufacture of handsets that are increasingly adaptable to different environments. “World phones” that support both CDMA2000 and GSM are on the market today and within the next two years, devices that incorporate both CDMA2000 and W-CDMA will become available.

While these examples illustrate how interoperability can be addressed at the product level, the CDMA industry is also collaborating with standards-development organizations to define standards that will make it possible for applications and services to work independently of the air interface, allowing customers to exchange information and communicate across networks, service providers, devices and geographies.

Conclusion

With the global reach of 3G now a reality, we have entered an exciting new era in communications in which wireless spectrum has become the preferred medium for delivering text, video, music and speech to increasingly demanding business and consumer markets as well as to those who have never had access to such services before. Our task ahead is to find even more ways to deliver on 3G’s promise to ensure that wireless technologies continue to meet the communication needs of people across the globe rapidly and cost-effectively. The IMT-2000 family of systems will enable us to achieve this important goal. "

Sources: [1] Verizon Communications Reports 6 per cent second-quarter revenue growth, led by wireless revenue growth of 25 per cent (second quarter highlights posted on 27 July, 2004).

[2] Data obtained from “The Mobile Internet Strategy of the Broadband Era,” presented by Makoto Takahashi, KDDI, at BREW Developer’s Conference, 9 June, 2004.

[3] Yankee Group Global Wireless/Mobile Forecast, April 2004.