Thursday, April 9, 2009

Who benefits if W-CDMA Wins

AT&T Mobility and Verizon Wireless , the two largest U.S. carriers, would like to see W-CDMA win. AT&T Mobility is uniquely positioned in the U.S. as the largest UMTS (based on W-CDMA) network, and Verizon Wireless is on a CDMA2000 network, whose broadband evolution is more likely to tap into WCDMA than WiMax. and as well as all other 3G wireless broadband providers, are deeply concerned about who wins the WiMax/W-CDMA battle. wants to see W-CDMA prevail and eventually move into the HSPA/LTE generation. Sprint Nextel (S), while running a CDMA2000/EV-DO network, has committed to offering a 4G WiMax Network in a partnership with Intel (INTC) Motorola (MOT), and Samsung.
Cable (e.g. Comcast (CMCSA) and Time Warner Cable, DSL (e.g. Qwest Communications International (Q), and Wireless Internet Service Providers (WISPs) who sell access to hot spots (e.g. EarthLink (ELNK) all stand to lose business with the success of WiMax, a clear technology substitue. However, this is similarly true with the success of W-CDMA, as long as wireless 3G carriers offer price competition to the "always-on broadband" currently offered by Cable and DSL providers. This is unlikely in the short run, however, because wireless carriers have made a mint in per-minute billing and won't move to flat-rate unless they have to. Thus, they'd prefer to see W-CDMA and voice-based technology win the race.
Alcatel (ALU), Nokia (NOK), and Motorola (MOT) three large wireless equipment vendors that have all moved through the wireless evolution with carriers. They're better poised for W-CDMA to win, but have all agreed to offer WiMax functionality in future products. They are clearly hedging their bets here.
AOL and other Internet service providers offering dial-up Internet connectivity have already seen their businesses decline, and the competition between W-CDMA and WiMax will further put downward pressure on broadband Internet access subscription fees, which will further drive people away from dial-up. WiMax, however, is more of a threat because those who use dial-up are more likely not to need mobile broadband access, and WiMax is gaining the most traction these days in fixed-broadband.

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