A Rev B resurgence? Not likely

According to report from research firm Telecom Pragmatics, EV-DO Revision B, the multicarrier version of CDMA 3G technology, is not only alive and well, it’s on the deployment road maps of Verizon Wireless (NYSE:VZ, NYSE:VOD) and Sprint (NYSE:S). The gist of the report is that CDMA technologies are alive and well, as neither operator will toss out their 3G networks as they move toward their respective 4G technologies.

The report is probably half right. VZW and Sprint have no plans to sunset their EV-DO networks anytime soon, but as for Rev B, Telecom Pragmatics is stretching. If you don’t believe me, ask Verizon. “You shouldn't be surprised,” VZW spokesman Jeffrey Nelson said in an e-mail. “Verizon Wireless is not working on EV-DO Rev B. We're locked and loaded for LTE.”

If Verizon is going to go through the trouble of adding capacity via a network upgrade, it’s going to use the most efficient technology possible, and right now that’s long-term evolution. Rev B is essentially a channel-stacking technology that melds multiple 1.25 MHz carriers into a single transmission. Rev B increases the capacity available to an individual device and with the bigger channels it improves the overall experience to everyone on the network, but it isn’t boosting the overall capacity of the network.

There’s a common misperception about 4G that carriers are upgrading their networks so they can deliver faster speeds to their customers. There’s an element of truth to that: Carriers do want take their networks from "broadband lite" to full broadband speeds, but their primary goal is spectral efficiency. They want to use what limited and expensive spectrum they have most effectively, i.e., they need to cut down the costs of delivering each bit to their customers, otherwise their ravenous demand for more and more data will drive operators out of business.

As Telecom Pragmatics points out an upgrade to Rev B would be relatively from a network point of view. It would require replacing multiples of Rev A base station line cards with a Rev B card, but operators have to think beyond the network costs. They’d have to build a Rev B ecosystem, getting their suppliers to provide them Rev B data cards and handsets. That would not only be costly, but with the LTE and WiMax ecosystems developing at a fast clip, they’d soon find it easier and cheaper to procure 4G devices than Rev B devices. Convincing manufacturers to put CDMA 1X and EV-DO chips into 4G devices is one thing. Dual-mode Rev B-WiMax or Rev B-LTE devices will require a lot of arm twisting.

Sprint didn’t issue a quick rebuttal like VZW, and it may well be testing Rev B in some trial network. Sprint, after all, is fond of taking new technologies for their first spins. But now that it has already launched WiMax in dozens of markets and its investment in Clearwire (NASDAQ:CLWR) is locked in, it makes even less sense for Sprint to tinker with Rev B than it does for Verizon. Any investment in Rev B is money it could be putting toward WiMax. The same goes for VZW: Its LTE launch is right around the corner, and with 100 million pops coverage planned by the end of the year, Verizon doesn’t appear to be pussyfooting around with 4G.

EV-DO has a lot of life left in it, but it has become by default legacy technology. Verizon Wireless has said that once its LTE network is nationwide and the majority of its customers are using LTE devices, it can start taking EV-DO carriers offline on an incremental basis — something hard to do if all of your EV-DO carriers are merged into a Rev B super-carrier.

Don’t get me wrong, Rev B has proven to be more resilient than we first thought. Operators in other parts of the world have started deploying Rev B as a means of boosting speeds to their customers. In the U.S., though, it makes little sense. The U.S. is moving much more quickly to 4G and is one of the few countries that already has the spectrum in place to do so.

Investing millions more into those networks while simultaneously spending billions on 4G deployments makes little sense. It’s not just CDMA operators that have come to that conclusion. AT&T (NYSE:T) decided to table its planned high-speed packet access + upgrade because its LTE networks are scheduled to go online next year. It’s no coincidence that the only major U.S. operator to invest in later-generation 3G technology, T-Mobile (NYSE:DT), has no dedicated 4G spectrum or deployment schedule.