CDMA Will Unseat GSM As A Worldwide Standard By 2010

By Roland Piquepaille

Virtually no one is willing to predict that CDMA will unseat GSM. Except me.

Now that you've calmed your beating heart, you might wonder what geek drug I took. Take my word for it: What I'm saying is heresy in the world of cellular phones. I'm anticipating that within eight years the system that powers 70% of the more than one billion cellphones used today will be mostly replaced by a system that runs only about 5% of today's cellphones.

Before going any further, I think a little background might be helpful.

GSM stands for Global System for Mobile communications. CDMA stands for Code Division Multiple Access. GSM was developed years ago by a standards-setting body and is used by all the mobile-phone systems in Europe and Africa and in major countries in South America and Asia. CDMA was devised by a single company, Qualcomm, which is mostly owned by a single family that tends to generate controversy everywhere it goes. There are only a few CDMA systems on the planet so far.

So why phone companies would switch from GSM to CMDA?

For one, it actually works better. CDMA systems transmit clearer sound, which is one reason that Sprint--the pin-drop people--went with the technology. The system is also better suited for data. While most cellphones today are used simply for phone calls, new devices are rolling out that allow you to e-mail, browse the web, or play games.

Then, CDMA is easier and cheaper to install. That's extremely important for the cellphone companies, which have to spend billions building networks, then billions more upgrading them to stay competitive.

The author is so convinced that CDMA has a competitive advantage that he's doing another bold prediction.

CDMA could even end up disrupting the deployment of another wireless data service called Wi-Fi (also known as the 802.11 standard).

CDMA may be a better way to give computers fast wireless network connections. Wi-Fi might work well, but no one has yet figured out how to make money by rolling out ubiquitous service. Cellular networks are already everywhere, even reaching into elevators and parking garages.

Rendez-vous in 2010 to check if Stewart Alsop was right.

Source: Stewart Alsop, FORTUNE, October 28, 2002 Issue