CDMA2000: Delivering on 3G
Tom Wasilewski, Telecommunications Management Group On behalf of CDMA Development Group
ITU-BDT Subregional Seminal On IMT-2000 for Arab Region September 29 – October 1, 2003 Doha, Qatar
CDMA Development Group
CDMA Worldwide
CDMA2000: Delivering on 3G
1 CDMA Development Group
CDMA Worldwide
CDMA2000: Delivering on 3G
Charter
To lead the rapid evolution and deployment of CDMA-based systems, based on open standards and encompassing all core architectures, to meet the needs of markets around the world in an emerging, information-intensive environment
Information Technical Service Deployment Distribution Development Assistance Conferences System Testing Time-to-Market Emails Advanced Systems Int’l Roaming Website Evolution Interoperability Etc. Etc. Etc.
2 Membership
The CDG is a consortium of 100 member companies from around the world. Members are involved in many aspects of CDMA system deployment and support.
Subscriber Value-Added Operators Equipment Services
Network Network Network Infrastructure Enhancement/ Interface & Optimization Access
CDG Members
• Agilent Technologies, Inc. • Ericsson, Inc. • NEWS IQ Inc. • Sprint • Aicent, Inc. • Fair Isaac Corporation • Nextel Communications • Starcomms Limited • Airvana Inc. • Gemplus Corporation • Nokia Corporation • Starent Networks Corporation • ALACEL Corp. • Giga Telecom Inc. • Nortel Networks • Tata Teleservices Limited • ALLTEL Communications, Inc. • Grayson Wireless • Novatel Wireless, Inc. • Telecom Mobile Limited • Alpine Electronics, Inc. • GTRAN, Inc. • Openwave • Telefonica Moviles S.A. • Angola Telecom • Himachal Futuristic • Pacific Bangladesh Telecom Ltd. • Telespree Communications Communications Ltd. • Anritsu • Pele-Phone Communications Ltd. • Telstra Corporation Ltd. • AnyDATA Corporation • Hitachi Telecom (USA), Inc. • PT Wireless Indonesia • Telus Mobility Cellular, Inc. • Huawei Tech. Co., Ltd. • ArrayComm, Inc. • QUALCOMM, Inc. • Texas Instruments • Hutchison CAT Wireless • Asia Pacific Broadband Wireless Multimedia Limited • QuickSilver Technology • TSI • Audiovox Communications • Qwest • UNEFON Corporation • Hutchison Telecom (HK) Ltd. • inCode Telecom Group • Racal Instruments • U.S. Cellular • Axesstel • Red Bend, Ltd. • VeriSign Telecommunications • Bell Mobility • KDDI • Komunikasi Selular Indonesia • Reliance Infocom Limited • Verizon Wireless • BellSouth International (Komselindo) • Research In Motion • VIA Telecom, Inc. • Berkana Wireless, Inc. • Korea Telecom Freetel, Inc. (KTF) • RITT • Wavecom, Inc. • Bermuda Digital Communications Ltd. • Kyocera Corporation • Rohde & Schwarz • Western Wireless • Samsung Electronics Co. Ltd. • Willtek • Bitfone Corporation • LG Electronics, Inc. • LG Telecom, Ltd. • Sanyo Fisher Company • Wireless Test Systems • Celerica, Inc. • SchlumbergerSema • ZTE Corporation • Celletra Ltd. • Lightbridge, Inc. • Sharp Laboratories of America • China Unicom • LogicaCMG • CIBERNET Corporation • Lucent Technologies, Inc. • Sierra Wireless, Inc. • SK Telecom • Comverse • Mobile Satellite Ventures • CTIA • Monet Mobile Networks • SmartCom PCS • Solid Technologies, Inc. • CURITEL • Motorola, Inc. • Sony Electronics • Denso International America, Inc. • NetNumber • Spirent Communications • Dyaptive Systems Inc.
3 CDMA Development Group
CDMA Worldwide
CDMA2000: Delivering on 3G
CDMA is the present and future of advanced wireless services
Code Division Multiple Access (CDMA) is a spread spectrum technology used in second and third generation wireless networks
cdmaOne™ identifies 2G and 2.5G cellular, CDMA2000 is an ITU-approved, IMT-2000 (3G) standard PCS and wireless local loop (WLL) services CDMA2000 1X can double voice capacity and delivers data based on the IS-95A and IS-95B CDMA air rates up to 307 kbps interface standards. IS-95A supports data delivery up to 14.4 kbps while IS-95B offers up CDMA2000 1xEV is optimized for high-speed data: to 115 kbps. • CDMA2000 1xEV-DO uses a designated channel for data at speeds of up to 2.4 Mbps in a single carrier • CDMA2000 1xEV-DV integrates voice and data on a single channel with speeds of up to 4.8 Mbps
4 CDMA Benefits
As the most advanced digital technology, CDMA offers significant benefits to operators and their subscribers
Operators Subscribers
• Greater voice capacity • Improved voice quality • Simplified system planning • Longer talk time through the use of the same • Enhanced privacy and security frequency in every sector • Advanced data services • Improved coverage characteristics resulting in fewer cell sites • Data ready; uses standard IP commands and protocols • The platform for 3G
The dominant 3G standards are based on CDMA
IMT-2000 Terrestrial Radio Interfaces
IMT-2000 IMT-2000 IMT-2000 IMT-2000 IMT-2000 CDMA CDMA CDMA TDMA FDMA/ Direct Spread Multi-Carrier TDD Single Carrier TDMA WCDMA CDMA2000 1X UTRA TDD & UWC-136/ DECT (UMTS) & 1xEV TD-SCDMA EDGE 3G CDMA
5 CDMA is the fastest growing technology serving more than 164 million subscribers
180,000,000
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
- Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Sep-97 Dec-97 Sep-98 Dec-98 Sep-99 Dec-99 Sep-00 Dec-00 Sep-01 Dec-01 Sep-02 Dec-02
Asia Pacific North America Caribbean & Latin America Europe, Middle East & Africa
Source: CDMA Development Group, June 2003
CDMA has presence across all continents
Europe, Middle East and Africa 2.6 million subscribers
The first 3G technology launched in Europe
North America Asia Pacific 69 million subscribers 63 million subscribers
Dominant technology Deployed in China and India Over 30% subscribers use 3G Over 50% of subscribers use 3G
Caribbean and Latin America 30 million subscribers
20% market share The only 3G technology available
As of June 2003
6 CDMA will continue to be the fastest growing technology platform
Technology Share
2,500 • CDMA subscribers base
will double between 2003 2,000 and 2007 to reach nearly
450 million 1,500 • CDMA market share will Millions grow from 15% in 2003 to 1,000 20% by 2007 500
0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Analog CDMA GSM iDEN PDC TDMA WCDMA
Source: EMC, June 2003
CDMA Development Group
CDMA Worldwide
CDMA2000: Delivering on 3G
7 CDMA2000 is commercially available in 29 countries across six continents
1X Commercial 1xEV-DO Commercial 1X Deployment 1xEV-DO Deployment 1X Trial 1xEV-DO Trial
59 CDMA2000 1X commercial networks (first deployed Oct 2000) 14 CDMA2000 1X networks scheduled to be deployed 2 CDMA2000 1X trial networks 7 CDMA2000 1x-EV -DO • CDMA2000 was the first 3G technology deployed commercial networks (first commercially (October 2000) deployed Jan 2002) 5 CDMA2000 1xEV-DO networks • 67 operators selected CDMA2000 scheduled to be deployed 2 CDMA2000 1xEV-DO trial • 12 operators have introduced or are migrating to networks CDMA2000 1xEV-DO
There are more than 54 million CDMA2000 subscribers
60,000
50,000
40,000
30,000
20,000
10,000
- Jul-01 Jul-02 Jan-01 Feb-01 Mar-01 Apr-01 Jun-01 Oct-01 Nov-01 Jan-02 Feb-02 Mar-02 Apr-02 Jun-02 Oct-02 Nov-02 Jan-03 Feb-03 Mar-03 Apr-03 Jun-03 May-01 Aug-01 Sep-01 Dec-01 May-02 Aug-02 Sep-02 Dec-02 May-03
• CDMA2000 holds nearly 99% of the 3G market share • More than 30% of CDMA subscribers use 3G • Nearly 4 million subscribers join every month
Source: CDMA Development Group
8 CDMA2000 will continue to expand rapidly and dominate the 3G market throughout the decade
600.0 300,000
500.0 250,000
400.0 200,000
150,000 300.0 Millions 100,000 200.0 subscribers (millions) 50,000 100.0
0 0.0 2001 2002E 2003E 2004E 2005E 2006E 2007E 2001 2002 2003 2004 2005 2006 2007
WCDMA CDMA2000
WCDMA CDMA2000
Source: Strategy Analytics, 2003 Source: Deutche Bank, April 2003
CDMA2000 key success factors
EnablesEnables rapidrapid timetime--toto--marketmarket
• Commercial since October 2000 and widely deployed worldwide • Can be deployed rapidly • Does not require new spectrum
OffersOffers thethe mostmost economicaleconomical andand flexibleflexible managementmanagement ofof spectrumspectrum
• Requires only 1.25 MHz of spectrum and can be deployed in any frequency designated for wireless services • Increases network capacity for voice and data traffic OffersOffers costcost--effectiveeffective migrationmigration fromfrom existingexisting systemssystems
• Viable solution for any existing technology • Minimizes capex and opex by leveraging investments in core networks and operating systems
DeliversDelivers highhigh datadata ratesrates andand supportssupports advancedadvanced applicationsapplications
OffersOffers thethe broadestbroadest rangerange ofof devicesdevices atat affordableaffordable pricesprices
9 CDMA2000 affords flexible management of spectrum
Current Spectrum Or New Spectrum
AnalogAnalog 1x 1x 1x 1x ANSI-41 Based Systems cdmaOnecdmaOne 1x 1x 1x 1x
TDMATDMA 1x 1x 1x 1x
GSM-MAP Based Systems GSMGSM/GPRS or GSM/GPRS 1x 1x 1x 1x
1.25 MHz 5 MHz
Because CDMA2000 requires only 1.25 MHz of spectrum, it allows an operator to introduce 3G data services gradually while preserving most of the spectrum to service voice customers
CDMA2000 can be deployed in any existing and new spectrum allocated for wireless services
CDMA2000 (1.25 MHz)
YES YES YES* YES YES YES
Cellular NMT PCS/PCN CDMA GSM GSM CDMA Analog TDMA PDC TDMA Analog GSM UMTS Europe and Asia MHz 450 800 900 1700 1800 1900 2000 2100 2200
NO NO NO ? ? YES WCDMA (5 MHz) *Limited by Regulations
10 CDMA2000 delivers maximum voice capacity in available spectrum (5 MHz bandwidth)
180 CDMA2000 (multi-carrier pooling) RxD+IA/CPD 160 CDMA2000 (conservative) 140 UMTS GSM 120 CDMA2000
100 SMV+TD TD+IC Erlangs 80 1x Rel. 0, EVRC AMR 7.95k 60 UMTS Tuned Initial 12.2k 40 SAIC+8PS AMR 5.9 35% IC Gain 42%HWFL 58%HWFL 20 EFR, FH, DTX, DPC GSM 1:1 Reuse, 25% HWFL 0 2002 2003 2004 2005 Year Gains assume 100% of users using latest technology. Actual gains would depend on handsets penetration Assumes 100% loading of voice traffic. Assumes 2% Blocking
CDMA2000 offers a direct path to 3G for any existing technology
ANSI-41
1xEV-DO 1xEV-DO (with enhancements) cdmaOne CDMA2000 1X • 2.4* Mbps Packet • 3.1* Mbps Packet • RF backward comp. • RF backward comp. • 14.4* kbps Circuit • 153* kbps Packet • RF backward comp. 1xEV-DV TDMA
• 9.6* kbps Circuit • 3.09* Mbps Packet • RF backward comp.
EDGE MAP
GSM GPRS • 118* EDGEkbps Packet • 9.6* kbps Circuit • 53* kbps Packet WCDMA HSDPA
• 384 kbps – 2* Mbps Packet • 10* Mbps Packet • New RF Spectrum • RF backward comp
2G technologies 2000 2001 2002 2003 2004 2005 3G technologies * Represents peak data rates
11 CDMA2000 is a natural evolution path for cdmaOne operators…
New 1X Channel Card BTS New Software CDMA2000 ADVANTAGE New Terminals • Preserves existing AMPS (backward and ANSI-41 network compatible) Software Upgrade BSC • Handsets backwards compatible with cdmaOne PDSN system Software Upgrade
MSC IWF
IP Backbone PSTN WWW VPN Enterprise Network
… and requires relatively small capital investment
Total CapEx (US$ billion)
Japan KDDI (CDMA2000 1X and 1xEV-DO) 2.5
DoCoMo (WCDMA) 10.9
U.S. Sprint PCS (CDMA2000 1X) 0.8
AT&T Wireless (GSM/GPRS/EDGE) 5.0
Moody estimates that cdmaOne carriers could upgrade to CDMA2000 1X for $3 to $5 per POP
Source: Morgan Stanley, June 2002; Yankee Group, July 2003; Moody; operator reports
12 TDMA/AMPS to CDMA2000: One step evolution to 3G
New off-the-shelf AMPSAMPS to CDMA2000Network 1X CDMA2000/AMPS Terminals BTS CDMA2000 BTS* New Equipment with 1X Channel Card
CDMA2000 ADVANTAGE BSC New Equipment • Preserves existing AMPS and ANSI-41 network • Now new spectrum PDSN required Software MSC Update • Handsets backwards compatible with cdmaOne Modem system Pool
IP * Usually co-located with AMPS equipment, requires separate interface protocols PSTN Backbone
WWW VPN Enterprise Network
CDMA2000 delivers a broad range of applications to the end user. . .
News Position Location
Ring Tones Push To Talk
Entertainment MMS
It’s a Boy!
Email Sports
Multiplayer Video Gaming Monitoring
13 …and greater revenue to operators
With CDMA2000 operators, data ARPU CDMA2000 subscribers generate 5 increases by 62% to contribute 11.6% times more data ARPU and 57% more in of total ARPU total ARPU than 2G subscribers
50,000
4,000 14.0% 11.6% 40,000
3,500 12.0% 30,000 9.9% 3,000 9.0% 20,000 10.0% 7.9% 2,500 7.4% 10,000 8.0% 0 2,000 FIMM 2G 1X B&W 1X Color FIMM 6.0% EV-DO 1,500 Data 1,058 2,106 4,734 8,877 10,197 4.0% 1,000 Voice 22,299 28,675 32,453 32,347 35,034
500 2.0%
0 0.0% 4Q 2001 1Q 2202 2Q 2003 3Q 2003 4Q 2003
Data ARPU Data ARPU/Total ARPU Others 12% CDMA2000 allows operators to offer richer content (beyond SMS) that SMS Wireless drives data usage 30% Content 58%
Source: KTF, December 2002
More than 400 CDMA2000 terminals are available in the market today…
• Color displays and cameras • Streaming Video • Real-Time VOV/AOD • Voice Recognition • GPS
14 …and CDMA2000 volume advantage drives the prices down
• CDMA2000 is already coming down Cumulative Handset Shipments the cost curve due to volume 700.0
shipments today and in the future 600.0
• CDMA2000 economies of scale are 500.0 leveraged from cdmaOne 400.0 • Rapid manufacturing transition to CDMA2000 will result from: 300.0 Shipments (millions) – Pin compatibility 200.0 – Leverages common design and components with cdmaOne 100.0
0.0 2002 2003 2004 2005 2006
WCDMA EDGE CDMA2000
Source: Gartner Group, January 2003
CDMA2000 – Operators’ Perspectives
“CDMA2000 is designed to build a simple and cost-effective network evolution…the first phase of CDMA2000, known as 1X, is already in commercial operati on, offering double the voice capacity of second-generation (2G) networks.”
SEC Filing S1-A 11/28/01 – “Our CDMA network positions us to meet the growing voice and data needs of our customers… Upon full deployment of our 1XRTT network and 1XRTT handsets, we expect that this technology will effectively double our network's voice capacity compared to the current version of CDMA.”
William Esrey, Chairman – "Essentially, we're spending zero additional dollars to convert our network to 3G."
15 CDMA2000 – Analysts’ perspectives
“The power of the platform is unlike anything the wireless industry has ever seen. The handset is no longer a simple device for voice communications as it is throughout most of the world, but is a multimedia platform in the truest sense of the word.” - ABN AMRO
“...only CDMA 1X comes with affordable and attractive handsets and applications, matched with half the capex per pop of W-CDMA.” –
Morgan Stanley
16