GSM adoption soaring, but CDMA to take over

The GSM digital cellular standard is rapidly gaining ground worldwide and recently reached 44 million subscribers, according to the GSM MoU Association, a group of worldwide GSM providers. Some analysts agree that the figures are accurate - but maintain that the world will turn to the rival CDMA in the next five years.

The GSM digital cellular standard is rapidly gaining ground worldwide and recently reached 44 million subscribers, according to the GSM MoU Association, a group of worldwide GSM providers. Some analysts agree that the figures are accurate - but maintain that the world will turn to the rival CDMA in the next five years.

"GSM will be a standard in Europe for a few years," says Guilia Rancati, an analyst at International Data Corp. in London. "However, within five years, CDMA should be the standard worldwide."

Gains in the number of GSM users in the US, which the GSM MoU puts at 500,000 total subscribers, will be offset by gains in CDMA users in the U.S. and Japan, Rancati said. However, even after five years, CDMA adoption in Europe will still trail the rest of the world, she said.

The reason most European cellular operators are reluctant to switch to CDMA is because there is such a large subscriber base of GSM users and a heavy investment in GSM transmission technology, Rancati says. However, cellular operators in Europe, such as Vodafone in the UK, are investing time and money into creating CDMA phones which are compatible with existing GSM networks, she said. This way, GSM and CDMA will be able to co-exist in Europe, she adds.

In Asia-Pacific and the US, however, CDMA will become the leading technology by far, Rancati says. "Japan is working hard to make CDMA a standard," Rancati says.

However, growth in GSM is still "quite strong," according to Rancati. The GSM MoU reports that 2 million customers worldwide are signing up for GSM service each month. In general, the mobile communications market is growing at impressive rates, Rancuti says.

By the end of 1997, IDC forecasts that there will be 167.6 million cellular subscribers worldwide, up from 132 million in 1996. By 2000, this figure is expected to reach 308.4 million, Rancati says.

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