Carrier interest in the European rollout of networks based on CDMA 450 technology may have ramped up in recent months, but analysts claim the standard is unlikely to be much of a financial benefit for infrastructure suppliers any time soon.

Deployed in frequency bands previously hosting analogue Nordic Mobile Telephony (NMT) cellular systems, CDMA 450 belongs to the CDMA2000 family of technologies, but operates in the 450MHz spectrum. 450MHz signals yield a broader cell radius than networks running over 850-, 1800/1900-, or 2100-MHz systems, meaning up to 80 percent fewer base station sites are required for a given deployment.

The top four global CDMA wireless equipment vendors -- Lucent Technologies Inc. (NYSE: LU), Nortel Networks Corp. (NYSE/Toronto: NT), Motorola Inc. (NYSE: MOT), and LM Ericsson (Nasdaq: ERICY) -- have all announced products for CDMA 450MHz, along with Chinese vendors Huawei Technologies Co. Ltd. and ZTE Corp. (see Ericsson Adds to CDMA Portfolio).

To date, Huawei has scored European wins with BelCel in Belarus and JSC Uzbektelecom in -- where else? -- Uzbekistan. Lucent has deployed equipment at Moscow Cellular Communications, Russia's Delta Telecom, and Zapp Mobile in Romania (see Lucent Scores in Moscow and Russians Launch 1x).

In October 2003, Nortel announced a CDMA 450 trial with UralWestcom in Russia (see UralWestcom Tries Nortel CDMA).

A Huawei deal with Portugal's Inquam Ltd. and persistent reports that Swedish carriers are lining up to launch CDMA 450 services have also strengthened belief that the technology could slowly creep into Western Europe -- a region dominated by the Global System for Mobile communications (GSM) standard.

Despite this growing momentum, analysts are certain that CDMA 450 represents only a limited European market opportunity for vendors.

“CDMA 450 is still a small market niche with severe spectrum constraints,” comments Peter Jarich of Current Analysis. “Unlike 800 MHz or 1900 MHz, CDMA 450 is unlikely to significantly alter any vendor’s CDMA market share... While Lucent and Huawei have racked up a number of wins, the number of operators with 450 spectrum cannot compare with the opportunity at 800 MHz or 1900 MHz.”

UBS Warburg claims that its expectations for the technology are “somewhat muted,” while Gartner Inc.’s Jason Chapman argues that CDMA 450 is unlikely to become a major revenue spinner. “There is room for incremental revenue, but it won’t be kicking out any of the existing technologies.”

— Justin Springham, Senior Editor, Europe, Unstrung