EV-DO vs WCDMA: Who’s ahead?

17 Comments

By Chetan Sharma

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

17 Comments

Abid Khan

Its should be necessary mentioned that countries other than America, how GSM would stand in comparision with EV-DO or WCDMA, of GSM operaters move towards Wimax for data demand, then where 3G technologies would look their future

Chetan Sharma

All, thanks for your comments,

Banu, Charlie, this is indeed intended to be a US-centric piece. Globally, WCDMA will continue to dominate EV-DO 2:1 for the foreseeable future. In the US, while Cingular got a head-start, its UMTS deployement was largely ceremonial to accomodate their agreement with DoCoMo. CDMA carriers particularly Verizon got off a good start and thus are dominating the 3G landscape.

Jogo, Cingular’s UMTS/HSDPA deployment is in 52 markets per their 3Q Earnings release and other public statements.

Laina, you are right WiMAX does enter into the equation but EV-DO clearly remains the focus, particularly when Sprint is trying to migrate its Nextel subscribers on to its CDMA network. Though we don’t know what 4G will eventually look like, it is clear that it will represent a combination of OFDMA and WiFi and other cellular technologies/functionalities.

Also, the chart is about subscriber penetration and not coverage penetration.

Jesse, you are right, in the end, it is rarely about the technology, it is about the services and how they are offered to the customers. DoCoMo executed brilliantly on this strategy and profited.

Jesse Kopelman

In the end, isn’t this more about the business styles of various companies than the technology. Verizon is always very agressive on having good coverage and this helps them get the business vote. Sprint has been doing a great job of undercutting Verizon on price, especially for Smart Phone oriented plans. Meanwhile Cingular is not agressive on price or coverage and seem to be waiting for the GSM advantage in better variety / lower cost user devices to come into play (different frequency profiles in the US cause there to be some lag). To me the real question is not CDMA vs UMTS, but WiMax vs 3G. If Sprint can execute on Mobile WiMax, 2008/2009 might have a lot of people thinking different about mobile data.

Om Malik

Just to point that despite all that talk about 3G, Cingular doesn’t really say which markets are getting HSDPA and which ones are EDGE. Claiming 137 is great, but is it available.

Also, isn’t LA area considered one major metro market versus small components of that market, like say Bakersville. I am a little confused about how they count.

jose

Cingular currently has UMTS/HSDPA in 137 major markets. A quick Google news search could tell you that. If you concede that the competing 3G coverage maps will be equivalent for 95% of the pop by Q207 then claiming that Ev-do will dominate until “at least 2010″ is a baffling assumption.

No, you got it wrong.

Out of the 134 markets — only 50 of them are major.

http://cingular.mediaroom.com/index.php?s=press_releases&item=1746

Anonymous

Cingular currently has UMTS/HSDPA in 137 major markets. A quick Google news search could tell you that. If you concede that the competing 3G coverage maps will be equivalent for 95% of the pop by Q207 then claiming that Ev-do will dominate until “at least 2010″ is a baffling assumption.

No — you are wrong. As of 2 weeks ago — Cingular’s 3G network covers 134 markets — but only 50 of those markets are “major” (i.e. over 100K population).

http://cingular.mediaroom.com/index.php?s=press_releases&item=1746

John Thacker

Cingular currently has UMTS/HSDPA in 137 major markets. A quick Google news search could tell you that. If you concede that the competing 3G coverage maps will be equivalent for 95% of the pop by Q207 then claiming that Ev-do will dominate until “at least 2010″ is a baffling assumption.

Of course, “137 major markets” includes such tricks as counting Arlington, VA, Alexandria, VA, and Washington, DC separately. Bellevue, WA, Seattle, WA, and Tacoma, WA all counting separately too. Durham, NC, Raleigh, NC, and Cary, NC, again all separate. http://business.cingular.com/businesscenter/en_US/popup/broadbandconnect-coverage-popup.jsp

However, that said, Cingular is about where Verizon was 12 months ago and even though Verizon and Sprint have a few more areas to push into (or for Sprint, to have Alltel push into so that the cross-roaming agreement will work), you’re right that for 95% of people it will be long before 2010 that Cingular will catch up.

corrections

WOW. Operating on such old data is something i expect from the comments section, but not from a “writer” on GigaOM, much less a “wireless consultant”. Seriously.
Cingular currently has UMTS/HSDPA in 137 major markets. A quick Google news search could tell you that. If you concede that the competing 3G coverage maps will be equivalent for 95% of the pop by Q207 then claiming that Ev-do will dominate until “at least 2010” is a baffling assumption.

John Thacker

(though WCDMA will completely dominate EV-DO worldwide).

Interesting, Japan and South Korea are not part of the world. Though I know what you meant. Being the one legislated standard in the EU is always going to give the GSM standards a leg up, since nowhere legally requires anything else.

The graph of market share is a bit misleading by itself only because what it really represents is not so much switching from EV-DO to WCDMA, but rather that several GSM operators had issues upgrading to WCDMA. Not surprising; CDMA2000/EV-DO is fully backwards and forwards compatible with the older CDMAOne, whereas the air interface on WCDMA is quite different from GSM.

There are indeed some operators switching from CDMAOne to WCDA and such, though; it’s fairly rare to switch between similar generation technologies, but a switch at the time of an upgrade is not unlikely.

Laina Raveendran Greene

May be interesting also to add to this Sprint has announced its decision to take a $2.5 billion spending on mobile WiMax, over and above its commitment to roll out EV-DO and its related upgrades.

So whilst examining EVDO and WCDMA (UMTS), it is also useful to compare the IP or 4G equation as well (finally mobile players are looking at IP enabling their networks often called 3.5G (HSDPA, HSUPA, etc)and integrating Wi-fi and Wi-Max)- often driven by pressure to adopt triple or quad play as becoming a differentiator and mobile players are being merged or joint ventured with cable or trad telecom players).

(Also- totally different costs factors here which is affecting 3G roll out. Besides cheaper infr costs, CPE costs etc, there is also cheaper licensing (even free if unlicensed bands are used) unlike 3G which was auctioned for millions or billions around the world through beauty contest or auctions.)

Charlie Sierra

Marketshare is mindless gobblygook, what matters to me (as an investor) is Profitshare, and in that regard we know who the winner is.

Jogo

Verizon does not have RevA released yet, but probably early 2007. Sprint already has RevA to 20 million population and 40 million planned for end of 2006, then entire network by end of 2007.

Jogo

Cingular does not have HSDPA/UMTS in 58 markets and nowhere near close to 50% of their network. Cingular only has it in under 20 metro areas, about 60 million population coverage. Sprint has EVDO covering 170 million and 200 million planned for end of year. Verizon has EVDO to about 160 million.

BanuPrasad

I dont understand ,if you are making overall technology comparison as your title of the article suggest then compare it on a worldwide basis not country specific basis that to only US which by no means is leader in wireless service rollout or adaption.
Infact CDMA market is declining worldwide CDMA operators in countries like Brazil and India are switching to GSM and WCDMA for 3G basic reason being the cost of handsets which are high compared to GSM market.If you make logical conclusion from all these I see GSM evloution capturing more and markets leaving CDMA and its evolution predominant only in US .

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