CDMA Alive and Kicking

Nortel Networks’ CDMA and LTE division went up on the auction block last week, and a surprise revelation that Research in Motion Ltd. was prepared to offer $1.1 billion for the bankrupt vendor’s wireless assets suggests that the imminent death of CDMA has been greatly exaggerated.

CDMA will continue to be a revenue generator for a while. The number of mobile broadband subscribers is closing in on the quarter-billion mark, worldwide, with a 93 percent year-on-year growth rate from 2008 to the present. And a significant amount of that traffic runs on CDMA.

In places like China and India, operators are expanding their networks to meet the demand and subscriber growth (7 million subs per month in China, for instance). And many of them use CDMA technology. Manjaro said that this kind of add-on growth, such as what China Telecom has been doing, will continue to drive CDMA revenue for some time. Meanwhile, in Latin America, where Europe-based multinational operators rule the roost, many want to consolidate global operations by standardizing on the CDMA platform. And of course, Sprint-Nextel Corp. and Verizon Wireless continue to expand capacity for their CDMA-based networks.

“There are lots of growth opportunities there,” said Nadine Manjaro, senior analyst at ABI Research. “And there are plenty of carriers that have a lot of CDMA subscribers, even if they are now building out on GSM because that’s the spectrum they were able to get – in those cases they’re not transitioning the CDMA subs because its not that they're unhappy, and they’ll continue to need support there.”

All of that said, clearly EV-DO will eventually be supplanted by 4G technologies like LTE or WiMAX. Verizon, for instance, has said that it plans to sunset its data-only portion of the network in favor of LTE, though it will be at least five years before they completely dismantle it. And voice subscribers will continue to run on the 1x voice-optimized network.

“CDMA will be around for some time, because the LTE transition isn’t going to be overnight,” said Manjaro. “For voice, the 3GPP has defined VoIP over LTE using IMS as the solution. But a lot of operators do not have IMS deployed in a widespread fashion.”