Wednesday 26 September 2007

Verizon defects to LTE camp

3GPP is celebrating after Verizon Wireless announced that it would be using 3GPP backed LTE as its next generation wireless technology of choice. Of course the decision was influenced by its sister company Vodafone. Verizon Wireless is currently using CDMA2000 EV-DO Rev 0 and Rev A in its wireless network in the US, which means that Verizon's natural next technological step on the way to 4G should have been the adoption of UMB. However, this decision is not as simple as it seems, as shown by Verizon Wireless' selection of LTE over its CDMA counterpart.

Just a few months removed from rumors that Vodafone would offload its stake in Verizon Wireless altogether, the two networks have announced that they'll share a common selection for their fourth-generation data networks: Long-Term Evolution. Endorsed by the 3GPP as the official way to burn wireless rubber in the next few years, LTE is a progression of GSM's UMTS platform, making it an ironic choice for CDMA stalwart Verizon and a huge blow for the CDMA Development Group's competing UMB standard. It seems that the unusual move was influenced by the fact that the sister networks -- two of the world's largest -- should probably enjoy some semblance of technological synergy if they're going to carry on their blissful matrimony for the foreseeable future, with Verizon CEO Ivan Seidenberg saying the company has been looking for "stability" in the relationship. Whatever the case, don't throw away that brand spanking new VX8550 or anything rash like that -- the companies aren't looking to roll anything out for another three or four years.

According to Ovum report:
This announcement is bad news for the UMB camp and its main backer, Qualcomm, as there is still no major CDMA operator that has committed to rolling out UMB technology. For example, the other largest CDMA operator in the US, Sprint Nextel, which also operates Rev 0 and Rev A CDMA networks nationwide embraced the mobile WiMAX technology for its next generation wireless network. At the same time, in Japan, KDDI which is one of the most significant CDMA operators worldwide has just announced the creation of a joint-venture to bid for a 2.5GHz licence in order to deploy a mobile WiMAX network.

Even if UMB is often marketed as benefiting from a time-to-market advantage compared to its 3GPP rival, UMB's future is not looking as bright as some vendors may have hoped for.

Verizon Wireless' move is significant for LTE, as it is a win in CDMA's birthplace and consequently strengthens its position as a potential alternative to UMB for other CDMA operators worldwide. One of the key selection criteria for any technology is its capability to generate economies of scale. Compared to UMB, LTE was already benefiting from an advantage in this domain as 3GPP technologies enjoy wider adoption worldwide and this, in addition to the fact that there's no strong commitment from major operators behind UMB, means that UMB's appeal is considerably weakened.

For Vodafone and Verizon Wireless, the decision to adopt a common technology for next generation wireless networks means that the companies have a common long-term view and therefore implies their relationship is long term. 'This LTE thing plays out probably over five to six years', said Verizon CEO Ivan Seidenberg, thus reinforcing Vodafone's insistence that it is not looking to sell its equity investment in the US operator. Using a common platform for next generation wireless services will also fix the current roaming issues due to system incompatibility between CDMA and GSM that Verizon or Vodafone subscribers are experiencing today when travelling.

This announcement also comes as clarification from Vodafone, by reiterating Vodafone's commitment to LTE as its mainstream technology for next generation wireless networks - a position WiMAX believers challenged after Vodafone joined the WiMAX Forum and Arun Sarin's announcements at a couple of industry events. However, if LTE's backers want to keep the lead at Vodafone, they would be particularly well advised to take into account Sarin's comments regarding LTE time-to-market issues.

More on LTE at 3G4G website.

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