By Sam Omatseye, RCR News, April 1, 2005
Unlike a few years ago, wireless vendors are no longer pure players in the technology realm. Major firms like Lucent Technologies Inc., Nokia Corp., Alcatel Alsthom and Siemens AG are stretching beyond their comfort zones. "All the vendors are recognizing that each technology has its market share," remarked Peter Rysavy of Rysavy Research. "They are hedging their bets because they are not sure which technology is going to be dominant in five years."
One vendor that recently demonstrated such technological diversity is Alcatel Alsthom, which announced plans to enter the CDMA technology space.
The French vendor has had a long association with the GSM protocol, dominant in Europe. But Alcatel is not only engaging the new technology, it also is pitching its tent more profoundly in the land of CDMA's birth: the United States.
"CDMA is at the center of Alcatel's mobile strategy for North America," said Hubert de Pesquidous, chief operating officer of Alcatel in North America. "This new capability builds upon the recent traction we have had providing GSM-based networks to some of the largest mobile providers in North America and is a welcome addition to our already powerful CDMA portfolio, and strongly positions Alcatel for success in the North American CDMA market."
The company has sold off its handset unit, and also announced its intention to play in the WiMAX market, which some industry watchers see as potential competition for the cellular protocols.
The new trend reflects the breaking down of protocol barriers and movement toward convergence in the industry, said Martin Dunsby, vice president and general manager at Openwave Inc.
Not only is industry focused on GSM or CDMA, but a whole slew of broadband protocols including Wi-Fi and WiMAX. New technologies are also waltzing in like IPWireless with its UMTS TDD, UTStarcom with TD-CDMA, and Flarion Technologies Inc with its Flash-OFDM offering. The Chinese also have chipped in with TD-SCDMA.
"The network protocol is not important anymore," said Dunsby. Instead, a new trend is being ushered in where carriers dedicate different networks to different technologies, Dunsby said. For instance, T-Mobile USA Inc. is having Wi-Fi networks aside from its cellular GSM/GPRS pipes. Virgin Mobile, a virtual mobile network operator, plays in a variety of protocol markets.
Nokia Corp., a GSM mainstay, has gradually shown its interest in other technologies. It joined the WiMAX forum while unveiling a technology strategy that industry players believe will combat the same protocol. In March, the company announced the protocol known as Internet High-Speed Packet access, which connects the radio architecture direct to the Internet.
Motorola Inc. promptly noted that it is working on a similar protocol, which it calls Flat Architected Access Network. This protocol bypasses some of the core nodes and gateway of the network infrastructure, creating restricted mobility just like WiMAX.
But this trend of veering away from comfort zones suits companies like Nortel Networks Ltd., L.M. Ericsson and Motorola, which did not have any attachment to specific protocols. Nortel has stepped up the speed for HSDPA by adding MIMO technology.
However, this trend is not significant enough to take away these players from their core competencies, remarked industry analyst Herschel Shosteck. He said that Nokia is still committed to GSM the same way Lucent is committed to CDMA. He explained that the new technologies like Flash-OFDM, UMTS TDD and WiMAX are not mature enough and may not generate enough business opportunities and the revenue of the core competencies.
Siemens AG, which has been solely committed to GSM in both handsets and infrastructure, has started looking at the OFDM technology as well as the Chinese homebred protocol, TD-SCDMA. Nokia is believed to be in talks to roll out EV-DO handsets,
Rysavy referred to Qualcomm Inc., the proprietor of CDMA technology, as a player in the OFDM space since the technology will power MediaFlo, its mobile television offering. Rysavy said it the OFDM play will not divert Qualcomm's attention from CDMA, but the company wants to leverage it with OFDM because it is good for multiple towers broadcasting the same signal.
"It does not mean Qualcomm will make a big push for OFDM," he commented.
W-CDMA and HSDPA will be dominant for the next few years, Rysavy said. A recent study conducted by Rysavy Research and Datacommn noted that OFDM will edge out CDMA. However, "CDMA, whether CDMA2000 or W-CDMA, still has a long way to evolve and it will be several years before vendors must switch to OFDM," he noted.