IDEN's Continuing Problems Opens the Door for W-CDMA
The recent news from Sprint Nextel, that it expects to lose a further million customers or more from its iDEN base in both the March and June quarters casts further doubts about the future of that technology. All seemed well in the first few quarters after the merger of Sprint with Nextel, with healthy, if not exceptional levels of growth.
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North American Region, Proportionate Growth Rate by Technology
Net Additions by Technology, North America Region
As the 1st chart shows, this period came to an end in Q4 06 and since then, the trend has been in only one direction. The total iDEN base now stands at just over 18m compared to just under 23m five quarters ago and will drop to 16m or fewer unless Sprint's pessimism proves unfounded. In a world where standardisation and volume are essential, this is probably unsustainable.
Were Motorola, the technology's sole champion, in better shape, we might not be so pessimistic, but it isn't, so we are.
That will leave the market as (more or less) a straight two way fight between CDMA and GSM/W-CDMA technologies. The European technology passed the 100m subscriber mark in Q3 and has moved on to an aggregate base of 102m now, but this last quarter belonged to CDMA, with nearly two and a half times as many additions to take its total to just under 141m. Two points are worth bearing in mind at this point, before drawing any definite conclusions - first, the level of quarterly net adds is not so large that the relative gains are that meaningful and second, the GSM numbers are being adversely affected by the rapid growth of W-CDMA. The second chart shows this in absolute terms, with W-CDMA now accounting for more new connections than GSM - 2.15m against 1.78m in this quarter, against 1.96m and 1.98m last. Given that there are only two North American GSM networks - AT&T's in the US and Rogers' north of the border - this is some achievement.
CDMA, for its part, added 4.3m new customers, a 3.2% quarter on quarter increase, but little more two thirds of the 6.4m adds seen in the same quarter of 2006. However, with the decline in iDEN, the proportion of all US connections using CDMA has actually edged up, from 51.0% to 51.5%. The improvement is reflection of the strong position enjoyed by Verizon Wireless as much as anything else but the recent news that Verizon is moving towards the GSMA's LTE solution suggests that this is as much as anything else an Indian summer for the technology.
Posted to the site on 3rd April 2008
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