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Global W-CDMA base doubles as CDMA decline gathers pace

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The dominance of the GSM family of technologies continued to increase in the year ended 30th September 2007 as a 25.9% increase in the number of 2G GSM customers was boosted by a 102.1% increase in the W CDMA base. Overall the increase amounted to 28.8%, exceeding the global total of 24.2% and taking the proportion of the global customer base accounted for by the two technologies to 86.0% from 82.9% a year earlier.

In absolute terms, GSM customer numbers crossed the 2.5bn mark in the third quarter of 2007, having broken the 2bn barrier in the same quarter of last year, after annual net additions of 527m. W-CDMA customer numbers increased by over 80m, reaching 159.5m globally, accounting for 5.0% of the global base, up from 3.5% at the end of September last year. In fact, Q3 2007 was the fifth successive record quarter for W-CDMA globally as 23.6m new connections were made, after 21.7m in Q2 2007.

The third quarter of 2007 was also the third successive quarter in which W-CDMA net additions in the year to date have exceeded CDMA net additions over the 12 months.

CDMA net additions plunged from 19.2m in Q4 2006 to just 8.0m in Q1 2007, and despite having recovered since then - to 10.7m in Q2 and 13.4m in Q3 - this has not prevented the continued quarter-on-quarter decline in the importance of the technology globally. The global CDMA customer base reached its peak in Q2 2004, accounting for 13.7% of the global total, and, except for a small hiatus in Q2 2006, has declined ever since. Just 12.0% of the world's mobile connections were CDMA at the end of September 2007 - the lowest percentage seen for five years.

As the chart shows, the rate of decline in this proportion has increased over the last year, which is a manifestation of the recent decisions by several major CDMA proponents to either begin phasing out the technology, or to complement it with networks running on the GSM or W-CDMA standards. Vivo in Brazil and Reliance in India both decided to switch to GSM in 2007, while Telstra in Australia and two of the three Korean operators have now elected to use the W-CDMA option for their 3G services. Telus in Canada is believed to be thinking along the same lines and were it to abandon the standard, there would be just four main exponents for this technology left - Unicom in China, KDDI in Japan and Sprint Nextel and Verizon Wireless in the USA. The latter, for its part, has already announced plans to move (eventually) to the LTE camp, the better to harmonise with the GSM/W-CDMA block.

With GSM and W-CDMA networks accounting for 2.72bn mobile customers and CDMA networks a further 0.38bn, just 62.1m of the world's mobile customers were unaligned to one of the major technologies at the end of Q3 2007, down from 106m a year earlier. This small base is constituted by customers connected using a number of minority technologies, all of which saw declining numbers in both absolute and relative terms in the quarter and the year. Twelve months ago, the largest part of this base was constituted by customers of AMPS/TDMA networks, but a 57% decline in numbers from 43.6m to under 20m globally saw its importance in the "others" category drop from 41% to 30%. The Japanese proprietary technology PDC also suffered a decline in numbers from 35.7m to 19.5m, as Japanese customers continue to be migrated to W-CDMA networks, diminishing its importance from 33.8% to 31.4% of the unaligned technology group.

If there was a "winner" here, it was the Motorola proprietary standard iDEN - a derivative of Specialised Mobile Radio technology - which saw its importance grow from 24.5% to 37.8% of the unaligned base. However, this was not due to any heroics from the handful of networks around the world which operate this technology, rather due to the fact that at 9.0% the annual decline in connection numbers was the least severe of all the technologies in this group.

The 0.4% remainder - accounting for just 0.008% of the global customer total - was composed of connections to one of the world's other legacy analogue networks, with connection numbers just over a quarter of a million at the end of the third quarter.

Net Additions (m) by Technology, year to 30th Sept 2007

% Customers CDMA, Q3 1997 - Q3 2007

Distribution of World MobileCustomers by Technology

Distribution of Unaligned World MobileCustomers by Technology

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