It’s been an evolving year for wireless broadband in the US. It moved from test-beds to real markets nationwide; both EV-DO and WCDMA (and their respective upgrades) have made progress. Considering that there are three critical things that matter in the evolution cycle of any wireless technology — the network coverage, the device choices, and the overall cost to the consumer — which technology is likely to be more pervasive in the coming years?
In terms of network coverage, even though Cingular (then AT&T Wireless) got a head start with its ceremonial UMTS deployment in four markets, Verizon and Sprint Nextel have jumped much further ahead in terms of national coverage. While Cingular has only covered 52 major markets in 28 states (just over 50% market) thus far, both Verizon and Sprint are nearing complete nation-wide coverage. T-Mobile won’t get into the picture until well into 2007. Alltel, the number 5 carrier in the US has been spreading its EV-DO coverage as well.
In the critical area of handsets, EV-DO is ahead by a mile. As of Sept 2006, there were
15 31 3G handsets available in the market (representing approximately 20% of the available handsets from big four), Fourteen 26 of those handsets were for EV-DO (15 from Verizon, 11 from Sprint Nextel) vs. five UMTS/HSDPA handsets from Cingular.
The average price of a 3G handsets in the U.S. is approximately $140 for low-end phones and $250 on the high-end. The pricing for broadband-friendly services are still in a state of flux but becoming more attractive by the day. To Cingular’s credit, its LG CU 500 is available at sub-$100 to make it attractive for mass-market. However, device price is pretty much the only area where Cingular wins out. The carrier needs better market coverage and a broader range of devices before it can start catching up with its CDMA buddies. Starting this Christmas season, we should expect the gap between the two technologies start to narrow as Cingular plays catch-up.
As of 2Q06, CDMA carriers had 93% of the 3G subscribers in the US with Verizon leading the pack with over 80% of the 3G subscribers. Next year we will see the introduction of HSDPA/HSUPA and the evolution is expected to continue with HSPA and LTE by 2009. On the CDMA track, Sprint Nextel and Verizon are already testing and introducing Rev A devices. EV-DO Rev B and Rev C are likely to be introduced in 2008 and 2009 respectively.
So, what can we expect in the next few years? In a way, this match of EV-DO vs. HSDPA in the US is akin to GSM vs. CDMA tussle 5-6 years ago. By the time, AT&T Wireless finally decided to abandon TDMA in favor of the GSM evolution, CDMA 1x RTT was well ahead of the game. EV-DO is clearly ahead in its 5 year maturation cycle in the US and will continue to enjoy a dominant market-share till at least 2010 (though WCDMA will completely dominate EV-DO worldwide). By that time, 3G penetration will reach over 50%.
Chetan Sharma is principal with wireless consulting firm, Chetan Sharma Consulting