Why CDMA2000 still matters

As a mobile broadband technology, CDMA2000 has been largely written off as dead or dying for the past few years.

To be clear, with nearly 500 million subscribers at the end of Q2 2009, the 3GPP2’s 2G and 3G technologies continue to deliver solid services to users around the world. More specifically, the CDMA Development Group claims some impressive statistics for the technology: 494,305,000 CDMA2000 subscribers (Q2 2009); 127,888,000 EV-DO subscribers (Q2 2009); 2,320 CDMA devices (Nov. 2009) — all backed by 308 operators. These services and devices, in turn, support subscriber growth, not to mention competition with GSM/EDGE and even HSPA deployments in some markets.

Today’s services aside, however, the rationale behind a generally negative outlook on CDMA2000 isn’t too difficult to follow. With 3GPP technologies dominating the billions of mobile subscriptions around the globe, they benefit from scale and roaming opportunities that simply aren’t available in the CDMA industry. What’s more, with ultra mobile broadband no longer positioned as a 4G migration path for CDMA2000 networks, the 3GPP2 technology road map is often portrayed as coming to a dead-end after EV-DO Rev. A.

This isn’t entirely fair.

The 3GPP2 technology road map continues well beyond EV-DO Rev. A to include 2G and 3G network upgrades, as well as a 4G migration path to long-term evolution (LTE). At the same time, a quick look at some of the biggest news in wireless over the last six months points squarely to the continuing relevance of CDMA to network vendors and operators alike: Cisco’s acquisition of Starent; Ericsson’s acquisition of Nortel’s CDMA business; EV-DO rev. B trials; 1X Advanced standards progress.

Grouped broadly into three categories — acquisitions/partnerships, technology evolutions, deployments — it’s clear that the past six months have borne out the argument that the CDMA space is far from dead or dying. That said, with so much of the big CDMA news relating to an evolution toward LTE, the message about its value to operators and vendors is often obscured.

Taking a step back, then, what do these events argue about the near-term CDMA value proposition?

• Value in accounts. Ericsson’s acquisition of Nortel’s CDMA business was broadly painted as the formal start of a process chopping the once great Canadian vendor into a number of pieces. Lost in this messaging was that Ericsson didn’t actually acquire Nortel’s CDMA business — it acquired Nortel’s CDMA customers in North America. It’s a somewhat subtle difference, but an important one. Why? It highlights one of the greatest assets the CDMA industry maintains: a solid set of large, successful operators.   
• Value in evolutions. For vendors, a large part of the value these major accounts bring comes from the fact that they plan to evolve their networks to LTE going forward. We’ve noted the trend before, but it bears repeating. Why? With LTE being positioned as the long-term future of mobile broadband services, building a relationship with CDMA operators as they move on the proto-4G technology promises clear dividends going forward.
• Value in today’s builds and services. None of this is to imply that there is no value in today’s CDMA2000 services or networks. CDMA networks are delivering services to millions upon millions of subscribers. These services will not be turned off in the near-term — or even in the medium term. Instead, as CDMA capacity gets constrained, network upgrades will continue. Alongside capacity upgrades, coverage will doubtlessly be expanded. Even as LTE matures and begins to take over from EV-DO as a credible mobile broadband technology, there is still value for vendors in today’s CDMA services — that’s the opportunity for vendor-led services such as network management, optimization and capacity management.
• Value in multiservice RAN. Huawei and ZTE may not be known for their deep professional, technical or managed services assets. They have been successful promoting multistandard radio access network solutions based on their early R&D in the space. Why does this matter? Because a key value of today’s CDMA deployments is an ability to upgrade to different technologies going forward based on a new generation of base stations. This is about more than moving to LTE. As CDMA networks begin to age (and some of them are getting quite old), the opportunity to replace them with a newer generation of base stations delivering opex efficiencies and investment protection is opened up.

If most of this value seems centered on the CDMA2000 evolution to LTE, that’s no coincidence. Hundreds of millions of CDMA subscribers are happy with their mobile voice and broadband services. CDMA operators are committed to these subscribers. They’re also committed to evolving their networks to a mobile broadband technology that looks to benefit from broader scale and the ecosystem this implies. This causes the future of CDMA2000 improvements such as EV-DO Rev. B and 1X Advanced to be questionable, making it imperative for CDMA2000 vendors interested in selling these technologies to roll them out as soon as possible — and for operators that want them to make their voices heard.