As technologies duel and markets discriminate, the impression is growing that TDMA will roll over in the dust trail and exhaust fumes of GSM and CDMA as both whistle past into the next generation of technologies. But advocates of TDMA technology are quick to point out Mark Twain’s words from more than a century ago: the tales of their technology’s impending death are greatly exaggerated.
“TDMA has an estimated 60 million subscribers worldwide,” glows Chris Pearson, executive vice president of the Universal Wireless Communications Consortium, the technology’s advocacy body. “It is the No. 1 technology in the Western Hemisphere in terms of subscribers, operators and coverage areas. And the fastest growing area is Latin America.”
In spite of this sunny optimism, signs are emerging that technology’s clock may be ticking foul of TDMA. In the fourth quarter of last year, TDMA’s biggest carrier, AT&T Wireless Services Inc., announced that it will overlay its TDMA networks with GSM. Not long after, Cingular, the combination of BellSouth Corp. and SBC Communications, hinted it also might go GSM’s way in the future.
If TDMA’s main strength is voice, and the future leads to data, analysts believe the case for the technology will weaken with time.
In a recent study of cellular and PCS market, the Strategis Group found data gradually will set the stage for the dominance of both CDMA and GSM. The report said CDMA and GSM will become the “leading technology platforms with 44 percent and 31 percent of the U.S. subscriber base, respectively.”
The report was given in the context of a growing tribe of cellular/PCS users throughout the next five years. The report said 69 percent of the United States’ population will subscribe to cellular/PCS services, which implies a subscriber base of more than 200 million.
The study also found mobile data service would grow from its present three percent to 50 percent in 2006, and 71 percent in 2007 among subscribers of cellular/PCS mobile data service. Noting mobile data users do not “necessarily pay monthly service charges,” data-only services will generate $25 billion, or 28 percent, of the total cellular/ PCS service revenue.
Adam Guy, a Strategis Group analyst who conducted the study, said TDMA probably would not be as dominant a technology as it has been, adding that by 2007, it will garner a trifle $8.5 billion in revenue, representing 9.6 percent of the cellular/PCS market.
“That is an amazing decline in terms of markets,” he said.
Yet, Guy believes the technology will continue to grow for the next three years, citing its suitability for PBX, with a 30 kilohertz that divides into three time slots. GSM divides into eight time slots.
“Mobile data is the fun thing to talk about,” he said, “but voice will remain a killer application.”
Defending the technology, Jim Baraban, the product manager for TDMA/GSM for PrairieComm Inc. adds, “It could be a legacy standard to be supported and there will always be voice services.”
Both Pearson and Baraban do not see the GSM overlay by AT&T as the death knell for TDMA, rather they see it as cooperation.
“They are commercial decisions,” Pearson said. “The overlay will be a small market until there is a large demand. If AT&T wants to overlay, it is still going to rely on TDMA as a major source of revenue.”
TDMA is supposed to follow the migratory path of EDGE to 3G, and its advocates believe that smooth path sets it up for UMTS and w-CDMA in the future.
“EDGE will provide seamless, voice and data communication for customers,” said Pearson. “And for customers it will provide the economy of scale to effectively deploy this network.”
If EDGE is supposed to steer the way to 3G, some analysts think it might be futile since 3G is around the corner and a full transition to EDGE may not happen before the next generation pounces.
“EDGE,” said Pearson, “should have a long life span.” But Baraban believes that its life span depends on carriers.
For all the future glories of data, no one is certain when GPRS and 3G will take off. Although most vendors are eyeing the second half of this year for GPRS to roll out in full scale, carriers are not as eager as the vendors. Nortel Networks cited carriers’ slow feet on 3G as one of its reasons for cutting its earnings forecast for the first quarter of 2001.
A recent Lehman Brothers’ report had identified handset availability, compatibility of equipment, the end-to-end network testing process, roaming and optimization of radio networks as impediments on the way to a full roll out.
But even when it does rollout, the key for TDMA is in a complementary network, said Pearson and Baraban.
TDMA may contend in the Americas, but the door seems closed in Western Europe, which is rooted in GSM. China, after dillydallying, announced in the fourth quarter of last year that it would adopt CDMA. Thus the options for TMDA do continue to shrink.
Except, says Pearson, in Latin America. He said that part of the world is not only unassailable, TDMA will continue to thrive because it still has a low penetration rate, which means the market is open. He said of the 20 operators in the market, 15 use TDMA and five use CDMA. And Brazil, the economic leader, leans heavily toward TDMA technology.
“The jury is still out in what is going to happen to TDMA in Latin America,” said Guy.
A number of operators have begun to bring a wider TDMA presence to the region.
Pearson still believes that TDMA has strong Asian, Middle Eastern and east European appeals and will continue to thrive, even if it is not dominate in those areas.
Referring to the survival of AMPS, he said 50 percent of people subscribe to wireless service for safety reasons and a large percentage of the market does not require the latest and greatest handsets. He also cites a FCC regulatory requirement that cellular operators maintain parallel AMPS network.
Although carriers are calling for the lifting of the regulations, Guy said AMPS is still useful for roaming.
“Second-generation technology has over 500 million customers,” said Pearson, “and they are paying a lot of bills.”
Even if TDMA did go away, contends Guy, it would be a long time.
Likely, it may recede into a rump, but it will still be around.