CDMA LAUNCHES CATALYZE RACE TO WIRELESS DATA

Verizon Wireless last week announced the commercial launch of its CDMA 2000 1XRTT network in 10 markets, and Sprint PCS has confirmed it will launch its version of the high-speed technology by mid-year. These launches could put the CDMA-based carriers ahead of their GSM competition, but analysts say it does not guarantee that one technology ultimately will dominate in the long term.

“I'm not sure speed is the most important metric on which to measure success,” said Phil Marshall, senior analyst for The Yankee Group. “Being able to create applications to meet specific market needs will be more important.”

1XRTT is expected to provide top speeds of 144 kb/s compared with 115 kb/s for GPRS, but both standards are expected to offer consumers an average between 40 and 60 kb/s. Marshall believes speed will become less important over time.

“It will depend on how operators take advantage of the IP backbone they are putting into their networks,” he said.

In the short term, 1XRTT operators will have the upper hand as Cingular Wireless and AT&T Wireless remain focused on the challenging process of transitioning from TDMA to GSM/GPRS.

However, “in the long term, the GSM operators will be able to leverage the economies of scale that the GSM market has,” Marshall said.

Unlike Verizon's staged approach to 1XRTT, Sprint PCS plans to roll out the technology nationwide this summer. “We just hope that such patchwork launches and claims don't spoil the water for true nationwide 3G launches,” said a Sprint PCS spokesman.

Verizon may have gained first-mover advantage with its U.S. launch of 1XRTT, but some industry experts predict Sprint PCS will give the carrier a run for its money.

“Strategy Analytics expects Sprint to counterpunch strongly with its nationwide rollout, packet-based billing and its signature device diversity when it deploys 1X nationally later this year,” said Cliff Raskind, director of the global wireless practice for the firm.

Verizon launched 1XRTT in 10 markets and only has one handset and one data card available. “I don't understand why they launched just 10 markets. If a carrier is going to roll out this kind of service and is taking it seriously, it should be doing it nationwide,” Marshall said.

WIRELESS DATA SCORECARD

Verizon Wireless Launched 1X technology in 20% of its markets with nationwide availability by the end of the year

Cingular Wireless Nationwide coverage of GSM/GPRS/EDGE by end of 2003

AT&T Wireless Nationwide GSM/GPRS/EDGE networks by the end of 2002. Will begin deployments of W-CDMA in 2003, finishing in 2004

Sprint PCS Nationwide 1X network by mid 2002

VoiceStream Wireless Launched a nationwide GPRS network in November under the brand iStream

Source: Company information