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T-Mobile Links to HSDPA

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LR Mobile News Analysis
Light Reading
1/12/2005
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T-Mobile USA appears keen to sidestep an initial Wideband Code Division Multiple Access (W-CDMA) network launch following reports linking the carrier to faster High-Speed Downlink Packet Access (HSDPA) technology.

Unlike its larger U.S. rivals, T-Mobile has to date kept a low profile on plans to upgrade its network to a 3G standard. T-Mobile currently provides General Packet Radio Service (GPRS) technology to its 16.3 million subscribers based on a so-called "2G" Global Standard for Mobile Communications (GSM) standard. GPRS services offer data speeds of around 40 kbit/s.

Meanwhile Sprint Wireless (NYSE: PCS) and Verizon Wireless have already committed to CDMA 1xEV-DO technology, offering average data rates of 300 to 500 kbit/s, and Cingular last month announced plans to deploy a nationwide W-CDMA network (see Cingular Touts 3G Plans, Sprint Confirms EV-DO Network, and Verizon Repeats on 3G).

Used with existing GSM core networks, the use of a W-CDMA air interface cranks up data transfer rates to an average somewhere between 300 and 400 kbit/s.

Reports this week suggest T-Mobile will likely avoid a protracted W-CDMA launch and will move directly to high-speed HSDPA technology. HSDPA is a software upgrade to W-CDMA networks and a standardized feature in the 3rd Generation Partnership Project (3GPP)'s Release 5 specification, introduced in August 2002 (see Release 5 to the 3G Rescue). Used with existing W-CDMA networks, HSDPA-compliant handsets and base stations are touted to crank up transfer rates to an average of 2 to 3 Mbit/s.

“We will probably go directly to an upgraded version [of 3G] called HSDPA,” Dow Jones Newswires quotes chief executive Robert Dotson as stating at an investor conference in Phoenix this week.

A T-Mobile spokesperson was less forthcoming. "T-Mobile USA will transition to a next generation technology that may include WCDMA/UMTS with HSDPA in the next 2 to 3 years," notes an email to Unstrung. "We have the advantage of learning from UMTS experiences from T-Mobile International as a way to ensure that our move to a next generation technology will be a well-informed and well-timed technology integration."

Analysts would be unsurprised by a direct move to HSDPA. "Given the timing for T-Mobile, it wouldn’t make sense for them to do anything but jump directly to HSDPA," notes Current Analysis's Peter Jarich.

Likely contenders for any HSDPA vendor spoils at T-Mobile would include existing network suppliers Ericsson AB (Nasdaq: ERICY), Nokia Corp. (NYSE: NOK), and Nortel Networks Ltd. (NYSE/Toronto: NT). (See Ericsson Expands T-Mobile USA, Nokia Expands T-Mobile USA, and Nortel Wins T-Mobile Upgrade.) According to a recent Lehman Brothers report, Ericsson and Nokia each control a 40 to 50 percent network share at the carrier, whilst Nortel enjoys a “small but growing share.”

— Justin Springham, Senior Editor, Europe, Unstrung

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