The CDMA2000 1x EV-DO contract wins by Lucent Technologies Inc. and Nortel Networks Ltd. with Verizon Wireless may be compelling other major infrastructure players to take the bait.
Rivals L.M. Ericsson, Samsung Electronics and Motorola Inc. announced solutions not only in the DO realm, but pushed the envelope with EV-DV, which covers voice and data. Bell Mobility and Sprint PCS have said they expect to roll out DV solutions, skipping the DO step. Sprint PCS said it needs to get its return on its CDMA2000 1x investment before deploying another major technology. CDMA200 1x offers both voice and data but with much slower speed and carries fewer high-octane applications.
Motorola demonstrated its DO solution at last week’s Cellular Telecommunications & Internet Association show. Meanwhile, Ericsson and Samsung have begun looking beyond DO to DV, highlighting comments by Sprint PCS and Bell Mobility that they plan to deploy DV.
Both vendors fell short of saying they are in conversations with Sprint on the carrier’s deployment plans. Ericsson said it is in talks with the top three U.S. carriers, according to spokesman Lars Nilsson.
Samsung spokesman Jim Parker pointed to his company’s partnership with Sprint in the first North American CDMA2000 launch in Puerto Rico. Samsung said its system already has been tested by a variety of North American carriers since it showcased it at the ITU Telecom World 2003 conference in Geneva, Switzerland.
Ericsson’s DV solution is not commercially ready, but the company simulated a DV system in its booth at the CTIA show, saying that the system it wants to roll out will be one notch higher than Samsung’s. Samsung’s system is Revision C of the DV specification, while Ericsson is working on Revision D, which has greater speed and resolution, according to Ericsson spokesman Peter Lancia. Ericsson also said it is waiting for CDMA proprietor Qualcomm Inc. to roll out DV chipsets, which are expected before the end of this year.
Samsung said it soon should crank out its Rev D codes.
Observers say Ericsson wants to play up its DV products in light of its frustration trying to gain infrastructure traction with North American carriers. Nortel and Lucent already provide the bulk of infrastructure gear for Sprint, and it could be difficult for any other vendor to nudge them out when Sprint is ready to deploy DV.
Yankee Group senior analyst Phil Marshal said Ericsson may find the North American market a large challenge.
Ericsson has economies of scale from the preponderance of GSM contracts it has acquired all over the world, making it the market leader, Marshal noted. Ericsson would not have to worry about the market, except in the United States. “It’s about incumbency.”
Marshal added the Swedish carrier should make much headway with China Unicom and a huge swath of CDMA450 contracts in emerging markets.
Although Nortel Networks has edged out some rivals in carrier contracts, long-term relationships are still trumping other considerations in 3G-contract decisions.
In the Verizon contract win, the carrier is set to spend $525 million with Lucent over three years and another $167 million with Nortel over two years.
Verizon’s DO contracts were basically upgrades, said Marshall, adding that it was easy for Nortel and Lucent to win them. Motorola has about a 15-percent footprint with Verizon, but the other two vendors hold the lion’s share of footprint with the carrier.
Ericsson seems to be pitching itself as a third-generation player, encompassing both wideband CDMA and CDMA2000 technologies, as opposed to providing just one version or the other. The reason is that both technologies have the same basic underlying structures, and distinguishing between the technologies distorts the fact that both rely on spread spectrum.
Industry analyst Ian Gillott believes that is a good strategy for Ericsson, adding “That’s what Qualcomm does.”
Both Lucent and Alcatel have converged infrastructure as well, Yankee’s Marshal pointed out.
Ericsson’s Lancia said his company may have lagged behind in contract awards in the past because of its late entrance to the market. But today the company has a differentiating feature: its infrastructure does not carry the burden of the IS-95 equipment, which the other CDMA rivals have, Lancia stated.
Samsung has strong position in DV and has often blazed the trail in technology innovations. The Korea-based company said it is using UTStarcom’s PDSN as part of its solutions.
DO has provided great bandwidth for data, but analysts wonder if its inadequacy will not be soon exposed as voice suffers in the quest for data and other dynamic media. One of the DO revisions has a voice reverse link, but that may take from the data channel during the voice session.
