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Commentary: CDMA leads only in speed

The newer wireless technology has superior speed potential when compared to the widely used GSM, but that doesn't necessarily make it the clear choice.

By Tole Hart, Gartner Analyst

The International Telecommunication Union has announced that it is classifying CDMA20001xEV-DO as a third-generation wireless technology. This definition helps to clear up confusion on classification, but Gartner does not expect it to have any noticeable effect on the market.

See news story:
Can you spell CDMA20001xEV-DO?
GSM technology is the worldwide market-share leader. It was introduced in the early 1990s and became widely used in Europe and Asia-Pacific. CDMA came along in 1996, and while it is dominant in North America and has a significant following in Asia-Pacific, it is not as prevalent as GSM. CDMA is popular in North America because leading providers such as Verizon Wireless, Alltel and Sprint PCS have chosen it. (Before that, North American providers mostly used analog technology.)

CDMA provides the potential for faster data speeds than GSM, along with better voice capacity and smoother upgrading. CDMA20001xEV-DO has a raw data speed of 2.4 megabits per second, compared with GSM's fastest raw data speed of only 1 megabit per second. In reality, however, the speed that users experience depends on how the network is built. The number of base stations in the network, the spectrum allocated to wireless data and the number of users accessing the wireless network will determine how close the actual speed is to the raw speed potential.

GSM technology, on the other hand, is more evolved. It has greater capacity for worldwide roaming because more operators use it. Economies of scale enable prices for handsets based on this standard to be lower than those for CDMA handsets.

Switching from GSM to CDMA requires a complete upgrade of a carrier's network. Carriers that have already chosen GSM will, therefore, likely remain with it. The newer technology has superior speed potential, but that is not enough to increase its market share.

Businesses making investments in this area should consider CDMA because of its speed. However, they should make certain in all cases that the carrier can provide adequate network coverage. They also should make sure that the data speeds advertised by the carrier are the actual speeds provided.

(For a related commentary on a deal between Japan's KDDI and China Unicom Group to share KDDI's expertise in CDMA technology, see Gartner.com.)

Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.