GSM vs. CDMA: the battle goes on?

One of the most rewarding aspects of being part of Informa Telecoms & Media's Com World Series team was having the opportunity to learn about regions which I had not previously studied or visited. Previously, while creating and hosting telecoms sector conferences for other companies, my travels had taken me to North America, Central & Eastern Europe and to Russia. My Com World Series brief took me further afield. In addition to already familiar territory, regions I covered in the Informa role included the Middle East , India/South Asia and Latin America.

In the last of these regions, my visits began at what felt like the relatively advanced stages of a protracted cellular network standard battle between the GSM and CDMA camps. A key partner in the delivery of the GSM Americas/Americas Com events in which I was involved was 3G Americas, an association founded in 2002, with a mission to unite "mobile operators and manufacturers in the Americas to provide a single voice to represent the GSM family of wireless technologies – GSM, GPRS, EDGE, and UMTS/HSDPA."

The 3G Americas President, Chris Pearson and the association's Latin America Director Erasmo Rojas led an Executive Briefing session at each of the Americas Com conferences delivered under my watch. They did a great job of rounding up CxO-level participants from key South American MNOs. I don't think they would mind me saying that on both occassions Chris's opening presentation really banged the drum for the GSM family in terms of describing advantages over rival standards.

I cannot be sure to what extent 3G Americas has been instrumental to the Western Hemisphere's migration away from CDMA technology in favour of the GSM flavour, but that migration has been significant. The graphic below, taken from the 3G Americas website (and drawn from Informa Telecoms & Media WCIS figures), shows how GSM has prevailed in the opening years of this new century:

It is worth pointing out that the non-GSM subscriptions are now, for the most part, in North America. In the USA and Canada, it is estimated that there currently exist around 153 million CDMA connections. GSM subscriptions across these two markets number around 104 million and W-CDMA lines have just reached the 20 million mark.

Looking further south, Informa Telecoms & Media estimated that in the 'Americas' region (all markets in the Western Hemisphere except the USA and Canada), there were almost 400 million GSM subscriptions and just 40.6 million CDMA subscriptions by the end of December 2008. Of these CDMA lines, the two most significant chunks were the 11.7 million connections in Brazil and the 15.8 million in Venezuela. In the case of Brazil, a single operator, Vivo, accounts for all the CDMA subscriptions.

When I looked up these figures today, I was a little surprised that Vivo, a joint Telefónica-Portugal Telecom operation, still has so many subscribers on its CDMA network. The last time I was looking closely at developments at Vivo, which was back in about May 2008, I was under the impression the company planned to shift all of its CDMA mobile subscribers to its newer GSM network. That process is certainly happening - but at nothing like the speed I imagined.

In Venezuela, the vast majority of the CDMA connections are owned by renationalised Movilnet, which has an estimated 11.3 million subscribers - vs. the 4.5 million CDMA connections of rival Movistar. Unlike Movilnet, the Telefónica-backed Venezuelan MNO has been steadily shifting users to a GSM network since March 2006. However, the state-owned cellco is also, finally, making the move to GSM. In December last year, Global Mobile Daily reported that billing vendor Amdocs has deployed a billing solution to support Movilnet's new GSM network.

We can therefore expect continuing developments in Latin America to impact upon the next version of the above graphic. Look out for further erosion in the non-GSM networks' share of Western Hemisphere mobile subscriptions.

One might infer from all of this that CDMA is a technology in quick decline towards an inevitable demise. However, recent news items from India lead me to believe that the GSM-CDMA battle is very much a live one in that country.

Earlier this week, I spotted that Sistema Shyam TeleServices is potentially looking at more acquisitions in order to gain better access to the Indian market. The company, a joint venture between majority shareholder Sistema of Russia and India's Shyam Group, was among operators to get new licences in early 2008. The nascent cellco is aiming to offer CDMA-based mobile services across the country before the middle of 2010. A Business Line/Hindu Group article dated Jan 30th quotes Vsevolod Rozanov, President and CEO, Sistema Shyam TeleServices, who says "We are open to any opportunities for acquiring a mobile services company in India to speed up our roll out plans. However, there are not too many CDMA operators in the country who are looking to sell their business." Asked specifically about well-established CDMA MNO Reliance Communications, Rozanov said, "Yes we can look at Reliance’s business if they are willing to sell. However, I do not think that is the case." According to the article Reliance was, at some unspecified recent time "considering a merger deal with South Africa-based telecom player MTN."

When the full gravity of the global economic downturn started to become clear to us all last year, I sensed that one casualty might be the international expansion plans of Russia's leading telecoms groups. In that context, Sistema's apparent willingness to spend money on growing its Indian CDMA operation suggests to me not only confidence in the Indian market but also a belief that the CDMA standard is up to the task of supporting attractive, well-priced and future-proof services.

Another sign that CDMA is to be taken seriously in India is the recent, strongly worded response of the COAI (Cellular Operators' Association of India) to reported plans on the part of one operator to make EV-DO data cards available on the market. The COAI is a club of GSM operators, a group that must surely be frustrated by the ongoing delays in the licensing of spectrum for 3G and WiMAX services. Telecoms.com reported today that having already put the spectrum auctions off until this year, because of the government's failure to clear the relevant radio spectrum in all operating regions ('circles' in the local jargon), new delays are anticipated in the wake of proposals to double the base price of the licences.

India's GSM players, then, are clearly concerned about being outpaced by CDMA operators. An article in yesterday's Economic Times says that COAI Director General T.V. Ramachandran has written to the country's telecoms Minister to seek assurances that no private player should be allowed to launch EV-DO service without 3G being made available to all players. The article states that according to the COAI, the launch of EV-DO services would be unfair to the GSM operators as "CDMA operators have ample spectrum to offer both 2G as well as 3G services and this can result in [giving] unfair anti-competitive advantage to CDMA and tilt the playing field to the disadvantage of the private GSM operators".

I daresay Mr Ramachandran and his colleagues will make a strong and persuasive case. During my stint running the Com World Series Indian event I had the pleasure of meeting the COAI Director General several times. One memory stands out. In 2007 I was asked to have lunch with Mr Ramachandran and his guests from various Indian government agencies at the conference. One of the guests, on agreeing with a point made by the COAI head, gave me a useful piece of advice about keeping tabs on telco sector developments in India. "If you want to know," said my neighbour at the lunch table, "watch T.V." I will indeed keep an eye out for more on this story. I am interested to see if the COAI can indeed prevail in their argument that EV-DO gives CDMA operators an unfair advantage over GSM operators struggling with further delays to their own 3G plans.

All of this makes me look back and smile at a very simplistic remark made to me years ago by one of my first bosses at a telecoms sector conference company. It was one of his tasks to set me on the path of cutting through the then-forbidding tangle of telco jargon. "CDMA is dead," he told me. "You only need to worry about GSM". I don't think that can have been true then given that it's abundantly clear that it's not correct even now.

GSM vs. CDMA: the battle goes on?