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GSM will eventually converge with the CDMA technology

In the economics of resource distribution, availability supersedes affordability. After the evolution of the telecommunication sector in Nigeria, the inability of the CDMA operators to make available this technology despite its acclaimed advantages over the GSM sustained the stunted growth of the CDMA telecom subsector space in Nigeria. According to an industry player, the current poor showing of the CDMA subsector is the result of the failure of the pioneer CDMA operators to roll out as aggressively as the GSM operators before the competitive pricing caught up with the industry.

Today, with only about 5 million active subscribers, a number that is declining, it has become harder for operators in the CDMA market space to benefit from scale efficiency in costs per user while average revenue per user is falling. The success factors are painfully linked to the ability of the existing players to put a CDMA phone or CDMA technology dependent devise in every hand and household. While this is a tall ambition, it is not insurmountable.

The Code Division Multiple Access (CDMA) Technology

Code Division Multiple Access (CDMA) is a "spread spectrum" technology, allowing many users to occupy the same time and frequency allocations in a given band/space. CDMA assigns unique codes to each communication to differentiate it from others in the same spectrum. In a world of finite spectrum resources, CDMA enables many more people to share the airwaves at the same time than with alternative technologies. According to the CDMA Development Group (CGD), CDMA promises better security, fewer dropped calls, and more efficient infrastructure than the GSM technology because of its unique technology features. Unfortunately, with the exception of the United State of America (USA) where the use of CDMA exceeds that of GSM technology, its adoption globally has been muted, with only 575m subscribers worldwide. It is estimated that there are over 5 billion GSM subscribers globally.

According to CDMA operators, GSM will eventually converge with the CDMA technology

It has been argued on two fronts that the CDMA technology is better than the GSM technology. CDMA phones have slightly more refined methods for handling off calls from tower to tower such that the occurrence of drop calls is lower on CDMA platforms than the GSM platforms. Secondly, in CDMA technology, data and voice are separated from signals using codes and then transmitted using a wide frequency range. Because of this, there is more space left for data transfer. It is one of the reasons why CDMA is the preferred technology for the 3G generation, which involve broadband access and the use of big multimedia messages. 14% of the worldwide market on 3G goes to CDMA. However, while GSM phones can send and receive data packets while making a call, most CDMA networks may not be able to. It has been argued that GSM will migrate to CDMA since CDMA is more advanced and it has been chosen as the 3G generation technology.

CDMA can compete favourably with the GSM technology despite some drawbacks

CDMA is the primary mobile technology competitor for GSM and is typically referred to CDMA Evolution-Data Optimised (EV-DO). It is designed to deliver high-quality voice and high-speed data. It is an efficient wireless technology for circuit-switched voice communications and it supports packet data speeds of up to 153.6 kbps in a single 1.25 MHz radio channel. Over the years, CDMA technology has matured with the introduction of a number of new technology advancements that have enabled increased capabilities, an enhanced user experience and improved economics, including new speech coders, advanced antenna techniques, interference cancellation and the aggregation of radio channels. It however has a major drawback: it doesn’t support simultaneous voice and data transmissions. The newest revision of EV-DO called Revision B (Rev. B) however makes concurrent voice and data usage possible.

Another drawback is the fact that while GSM phones use a chip called a SIM card which can be removed and inserted into other GSM phone, the CDMA phone’s chip is locked to one network, and can only be switched to another with the cooperation of both the old and new carriers if you change provider. However, the CDMA standard utilises something similar to SIM (Subscribers Identification Module), called the RUIM (removable user ID module). CDMA phones can potentially draw more power than GSM handsets, shortening their battery life.