Research firm: Weaker voice will hold back WiMax

GSM to dominate for the next five years

The GSM (Global System for Mobile Communications) family of technologies will continue to dominate the mobile infrastructure business over the next five years, a research company said Wednesday.

Sales of network gear for WiMax, the hot new mobile broadband system, will grow by an average of 50 percent per year until 2011 but still only make up about 5 percent of the market worldwide, according to Dell'Oro Group. Meanwhile, versions of WCDMA (Wideband Code Division Multiple Access) will grab share away from rival EV-DO (Evolution-Data Optimized) technologies as mobile operators build their networks, said Dell'Oro analyst Greg Collins. The Californian company on Wednesday announced a report on the mobile infrastructure market from 2006 to 2011.

Backers of mobile WiMax have painted a bright future for the emerging technology, which is based on the IEEE 802.16e standard and designed to deliver multiple megabits per second over a range of miles (1 mile = 1.6 km). Collins didn't label WiMax a loser but said it will get off the ground slowly because it's an underdog when it comes to carrying voice calls. Emerging WCDMA and EVDO technologies have closer ties to the cellular world and will be better equipped to handle calls over the next few years, Collins believes, so most users will hang onto them.

Dell'Oro forecast 2011 revenue of about US$2 billion for WiMax network infrastructure that serves end users. Gear for other purposes, such as mobile operators' wireless "backhaul" links to cell towers, wasn't included.

Broad adoption of WiMax will drive down its cost, further accelerating the rollout, according to Intel and other WiMax supporters. Dell'Oro's forecast growth rate could impede the technology's progress toward attractive consumer prices, Collins said, although it does share some features with other emerging wireless systems.

The emergence of WiMax will be a sideshow to growing dominance of WCDMA technologies in the cellular world, according to Dell'Oro's forecast. Most of the world's mobile operators have grown up on GSM and are upgrading to WCDMA technologies, including the upcoming HSUPA (high-speed uplink packet access) and LTE (Long-Term Evolution) systems. The competing CDMA technology, with its own upcoming versions, has had strongholds in the U.S. and South Korea and been adopted in some other countries.

Some CDMA carriers in developing countries, such as India and Brazil, are now migrating toward the WCDMA path, Collins said. Among other things, they want to serve travelers from other countries, most of which use WCDMA, to earn lucrative roaming charges, he said. Even in South Korea, some operators are looking away from CDMA because they are worried about support for future development of a minority technology, Collins said. CDMA's 3G technologies made up 20 percent of spending on mobile infrastructure in 2006 but will represent only about 13 percent in 2011, according to Dell'Oro.

One reason WCDMA takes up such a large share of infrastructure revenue is that it's more expensive to upgrade to those technologies, said James Person, chief operating officer of the CDMA Development Group, which represents vendors and operators using CDMA. This is true, but CDMA's global footprint among mobile operators still is shrinking, Collins said.

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