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By Ed Sutherland

The ultimate outcome of the battle for dominance between these two competing cellular data
transmission technologies may lie more in their history than their respective merits. To
understand the current prevalence of GSM, one needs a foundation in the forces that
converged to push one technology ahead of the other.
One of the most contentious battles being waged in the wireless infrastructure industry is
the debate over the efficient use and allocation of finite airwaves. For several years, the
world's two main methods -- Code-Division Multiple Access (CDMA) and Global System
for Mobile communications (GSM) -- have divided the wireless world into opposing
camps. Ultimately, the emergence of a victorious technology may owe more to historical
forces than the latest wireless innovation, or the merits of one standard over the other.

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CDMA, put into an historical context, is a recently patented technology that only became
commercially available in the mid-1990s, but had its roots in pre-World War II America.
In
1940, hollywood actress turned inventor, Hedy Lamarr, and co-inventor George Antheil,
with World War II looming, co-patented a way for torpedoes to be controlled by sending
signals over multiple radio frequencies using random patterns. Despite arduous efforts by
the inventors to advance the technology from experiment to implementation, the U.S. Navy
discarded their work as architecturally unfeasible. The idea, which was known as frequency-
hopping, and later as frequency-hopping spread-spectrum technology (FHSS), remained
dormant until 1957 when engineers at the Sylvania Electronic Systems Division, in Buffalo,
New York took up the idea, and after the Lamarr-Antheil patent expired, used it to secure
communications for the U.S. during the 1962 Cuban Missile Crisis. After becoming an
integral part of government security technology, the U.S. military, in the mid-80s,
declassified what has now become CDMA technology, a technique based on spread-
spectrum technology.

What interested the military soon caught the eye of a nascent wireless industry. CDMA,
incorporating spread-spectrum, works by digitizing multiple conversations, attaching a code
known only to the sender and receiver, and then dicing the signals into bits and reassembling
them. The military loved CDMA because coded signals with trillions of possible
combinations resulted in extremely secure transmissions.

Qualcomm, which patented CDMA, and other telecommunications companies, were

attracted to the technology because it enabled many simultaneous conversations, rather than
the limited stop-and-go transmissions of analog and the previous digital option.

CDMA was not field tested for commercial use until 1991, and was launched commercially
in Hong Kong in 1995. CDMA technology is currently used by major cellular carriers in the
United States and is the backbone of Sprint's Personal Communications System (PCS).
Along with Sprint, major users of CDMA technology are Verizon and GTE.


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PÊ Increased cellular communications security.

PÊ Simultaneous conversations.
PÊ Increased efficiency, meaning that the carrier can serve more subscribers.
PÊ Smaller phones.
PÊ Low power requirements and little cell-to-cell coordination needed by operators.
PÊ Extended reach - beneficial to rural users situated far from cells.


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PÊ Due to its proprietary nature, all of CDMA's flaws are not known to the engineering
community.
PÊ CDMA is relatively new, and the network is not as mature as GSM.
PÊ CDMA cannot offer international roaming, a large GSM advantage.

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Analysts consider Qualcomm's major competitive disadvantage to be its lack of access to the
European market now controlled by Global System for Mobile communications (GSM). The
wireless world is now divided into GSM (much of Western Europe) and CDMA (North
America and parts of Asia).

Bad timing may have prevented the evolution of one, single global wireless standard. Just
two years before CDMA's 1995 introduction in Hong Kong, European carriers and
manufacturers chose to support the first available digital technology - Time Division
Multiple Access (TDMA). GSM uses TDMA as its core technology. Therefore, since the
majority of wireless users are in Europe and Asia, GSM has taken the worldwide lead as the
technology of choice.

Mobile Handset manufacturers ultimately split into two camps, as Motorola, Lucent, and
Nextel chose CDMA, and Nokia and Ericsson eventually pushed these companies out and
became the dominant GSM players.


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PÊ GSM is already used worldwide with over 450 million subscribers.

PÊ International roaming permits subscribers to use one phone throughout Western
Europe. CDMA will work in Asia, but not France, Germany, the U.K. and other
popular European destinations.
PÊ GSM is mature, having started in the mid-80s. This maturity means a more stable
 network with robust features. CDMA is still building its network.
PÊ GSM's maturity means engineers cut their teeth on the technology, creating an
unconscious preference.
PÊ The availability of Subscriber Identity Modules, which are smart cards that provide
secure data encryption give GSM m-commerce advantages.

In brief, GSM is a "more elegant way to upgrade to 3G," says Strategis Group senior
wireless analyst Adam Guy.


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PÊ Lack of access to burgeoning American market.

 

Today, the battle between CDMA and GSM is muddled. Where at one point Europe clearly
favored GSM and North America, CDMA, the distinct advantage of one over the other has
blurred as major carriers like AT&T Wireless begin to support GSM, and recent trials even
showed compatibility between the two technologies.

GSM still holds the upper hand however. There's the numerical advantage for one thing: 456
million GSM users versus CDMA's 82 million.

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AT&T Wireless' move to overlay GSM atop its TDMA network means the European
technology (GSM) gains instant access to North America's number two network.

Qualcomm's recently announced that Wideband-CDMA (WCDMA) won't be ready in

Europe until 2005. This comes amidst reports that GSM's successor, General Packet Radio
Services (GPRS) remains on target for deployment in 2001-2002.

For all of the historical and technological reasons outlined above, it appears that GSM, or
some combination of GSM and CDMA, will become the long sought after grail for a global
wireless standard. A universalization of wireless technologies can only stand to benefit the
compatibility and development costs and demands on all wireless commerce participants.
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