The CDMA2000 network market consists of radio access network (RAN) and core network infrastructure used by service providers to deploy mobile wireless wide area network services using licensed RF spectrum.

In the RAN, key components include the base transceiver station (BTS) and base station controller (BSC, for CDMA2000 1X) or radio access controller (RAN, for EV-DO). Core network gear includes mobile switching centers (MSC) or mobile softswitches, packet data gateways and core routing platforms. Architecturally, the BTS sits on the edge of a wireless network and provides RF connectivity to end-user devices. BSCs manage and aggregate BTS traffic while switching assets groom this traffic onto the PSTN and manage handoffs. Beyond voice, data transport within the mobile network is provided by multiservice switches and IP routers, while subscriber traffic is linked to external data networks using packet data gateways (packet data service nodes - PDSN). The PDSN maintains contact with a mobile subscriber as he/she moves though the network, informing the network how the subscriber can be reached via the PDSN’s IP interfaces. If subscribers roam using mobile IP, the PDSN provides foreign agent (FA) functionality to register them and receive data from the subscriber’s home agent.

Functionally similar to GSM/UMTS, CDMA differentiates itself as a spread spectrum technology, promising greater spectral efficiency and the availability of in-band data service upgrades from 2G to 3G over 1.25 MHz channels. Where 2G CDMA (cdmaOne) provided limited data capabilities, CDMA2000 introduced higher data rates with the deployment of CDMA2000 1xRTT upgrades. CDMA2000 1xEV-DO supports high-speed data-only traffic up to 2.4 Mbps per carrier (i.e., within an entire sector), with EV-DO revision A topping out at 3.1 Mbps while increasing uplink capacity from 192 kbps to 1.8 Mbps. Going forward, EV-DO rev. B offers the ability to “bond” EV-DO channels for higher peak data rates while capacity enhancements to CDMA2000 1X and EV-DO are planned thanks to interference cancellation techniques. Beyond 3G, Ultra Mobile Broadband (UMB) was once positioned as a 4G migration path based on OFDM and Qualcomm’s acquisition of Flarion; over the past year, however, Qualcomm has pulled back on its support of the technology based on CDMA operator interest in LTE.

• China Telecom’s Big Plans: Following a major reorganization within the Chinese telecom sector, China Telecom acquired China Unicom’s CDMA networks. Where China Unicom struggled to grow the network as fast as its GSM properties, China Telecom has pledged to invest $12 billion in the network over the next three years, planning to boost subscribers to 100 million by 2010 (from 43 million today) – suggesting the biggest CDMA network expansion in recent history, and potentially the last one of its magnitude going forward.

• Qualcomm’s Big Plans: While few CDMA operators may be planning network expansions on par with China Telecom, Qualcomm is still advancing the technology. In particular, 1X and EV-DO enhancements promise improved performance thanks to new receiver designs and interference cancellation. Where added voice and data capacity is the result of these upgrades, the need for operators to move on 4G may be postponed, keeping CDMA alive even longer.

• Alcatel-Lucent’s Little Base Station: At the annual CTIA trade show this year, Alcatel-Lucent launched its distributed CDMA base station consisting of compact baseband and remote RF assets. While the move follows what has become relatively commonplace in the WCDMA market (where main-server base stations have been available for years) the move nonetheless points to continued CDMA innovations and a continued focus on the market - at least for Alcatel-Lucent.

• EV-DO rev. B On Life Support: On paper, Qualcomm’s EV-DO rev. B technology is a logical upgrade to EV-DO rev. A networks; ganging together multiple carriers provides for higher data rates, lower latency and is a simple software upgrade for any operator launching more than one carrier of DORA. With Sprint, Verizon Wireless and China Telecom not yet committed to the technology, its prospects do not look good. As a software only upgrade, however, it will continue to be compelling – particularly as HSPA operators begin advertising 7.2 Mbps services and LTE development encounters the inevitable delays.

• UMB in the Funeral Home: With the world’s major CDMA operators choosing to virtually ignore Ultra Mobile Broadband (UMB) as a 4G evolution path, the technology has been considered, “dead in the water” for much of the last year. Yet, where analysts and the media continue to reference it as a potential 4G path for CDMA operators, Qualcomm’s admission that it has put UMB R&D on hold puts the question of its success to rest.

• Sprint Goes National with Femtocells: Last year, Sprint became the first mobile network operator to launch commercial femtocell services. This year, it expanded its test-market launch into a national service offer. Still lacking 3G and solid handoff performance, the company is suffering from the perils of being an early mover in the market; users simply looking for good performance and pricing aren’t likely to care why the service falls short.

• China Telecom: China Telecom’s plans to spend $12 billion on its new CDMA network over the next three years include plans to spend $4 billion over the next year. In an attempt to significantly grow its customer base, the company’s network expansions should be the CDMA market’s last massive network expansion before most major operators begin moving on 4G. To this end, every vendor will be scrambling to win a portion of the deal (with Huawei and ZTE obviously favored), build scale behind new CDMA solutions and even (potentially) behind new technologies (such as rev. B or interference cancellation enhancements).

• Chinese Vendors: It’s been commented that CDMA – once a patently American technology – has evolved into a Chinese technology, driven by vendors such as ZTE and Huawei. Based on a long history of deployments, CDMA heavyweights such as Alcatel-Lucent, Nortel and Motorola still maintain winning market shares. That said, messaging from ZTE suggests that the vendor is winning more than its share of recent deals while Huawei’s partnership with Qualcomm on new radio designs points to a willingness to innovate. Given the planned expansion of CDMA in China, there’s no reason to expect this focus to wane in the near-term.

• Emerging Markets: The developing world has been at the heart of global wireless growth for several years. The trend is far from over. With footholds in Eastern Europe, Africa, China and India, CDMA has proven its mettle in emerging markets. To be sure, CDMA will face fierce competition from GSM and WCDMA. On this front, vendors will highlight the added value delivered by robust data services as well as the availability of ultra-low cost user devices. For its part, Chinese CDMA expansions will likely provide fodder for new marketing and case studies of how CDMA can meet emerging market service and ARPU demands.

• Femtocell Investigations: Now that Sprint has taken its femtocell solution nationwide, its competitors will feel greater pressure to follow suit. To this end, Verizon Wireless is rumored to be looking at femtocell trials and operators in Asia are looking to femtocells as a natural extension of their focus on advanced data services and in-building coverage. At the same time, vendor efforts to develop enterprise-oriented femtocell solutions suggest new business models and new (high-value) revenue sources that will be too big to be ignored by operators.

• EV-DO rev. A vs. EV-DO rev. B: Given the benefits over EV-DO rev. 0 (especially on the uplink), it was inevitable that CDMA operators would move to EV-DO rev. A. The benefits of EV-DO rev. B may seem less compelling, but the potential of making it a software upgrade and the evolution of HSPA to 7.2 Mbps and beyond makes it important. In the near-term, operators will likely continue to ignore the technology – doubtless making it the focus on continued vendor messaging.

• Vendor Instability: Many major CDMA operators have built their networks based on kit from Nortel and Motorola. Unfortunately, on-going corporate restructuring at Motorola has left the vendor in a slightly unstable position while financial turbulence at Nortel (combined with the pullback from both WCDMA and WiMAX) has left the company with less credibility. While unlikely to bring down the industry, trouble with major CDMA vendors could open up new sales opportunities for competitors or drive their customers to move quicker on network evolutions.

• Device Availability: For many years, device availability and device diversity (with accompanying scale and cost efficiencies) was an important driver of GSM’s success over CDMA2000. To its credit, the CDMA community leveraged its scale to build low cost (emerging market) devices and its data capabilities to differentiate it. Yet, as CDMA market growth begins to slow down, the importance of device options will not diminish – making it more important than ever for operators to demand solid vendor commitments to the market.

• 4G Business Models: Again, the exact rationale for 4G network launches is still unclear in a market where operators continue to struggle with ramping up 3G usage. Yet, if operators can find the right applications and pricing to make mobile broadband indispensable, it could provide the basis for moving more quickly on 4G, and may potentially marginalize today’s CDMA networks.

• M2M: There’s been no shortage of interest in machine-to-machine (M2M) communications over the years. And, while market growth has yet to live up to the optimistic forecasts, it’s likely that M2M traffic will comprise a major share of mobile data traffic in the future; beyond operators talking up visions of 4G-enabled cameras, the cost savings wireless meter reading and similar applications is too great to be ignored. Yet, with WiFi tapping the opportunity both inside and outside the home, the cellular community cannot afford to wait for 4G.

• Applications & Pricing: It is fair to say that 3G data services growth (CDMA2000 and WCDMA) can be kept to a minimum if operators continue to price services at a premium and offer little more than basic data access. In many ways, this is no different from any other technology – compelling pricing and services are key to adoption, new network builds and network expansions. Of course, the longer it takes for CDMA operators to get serious on affordable data pricing, the fewer proof points there will be for future LTE builds.