Ericsson's belief in the viability of WCDMA for high-growth markets is based on a number of factors. First, in terms of radio-spectrum efficiency, WCDMA systems have been shown to be at least twice as efficient as GSM systems. Second, US operator Cingular's commitment to deploying the 850 Mhz band for 3G is likely to encourage the uptake of WCDMA in rural areas, where the enhanced coverage provided by low frequencies is key. And third, the large Chinese market is set to encourage the production of low-cost 3G phones.

 

Radio access expert Johan Sköld, at Ericsson Research, notes that WCDMA has been designed with efficiency and cost reduction in mind. "Efficiency is measured in terms of how many users can be connected to a single base station within a certain amount of radio spectrum," he says. "One of the targets during the development of WCDMA was for it to be more efficient than GSM, and it has in fact turned out to be twice as efficient. This translates directly into lower costs for operators." 

Mikael Bäck, head of WCDMA radio networks at Ericsson, makes the point that operators choosing 3G open themselves up to the possibility of providing a richer set of services than just voice. "As soon as you provide 3G coverage for voice users, you can also offer services such as high-speed data and mobile TV, at very limited extra cost," says Bäck. In addition to the arguments for efficiency and richer services, Ericsson sees Cingular's adoption of the 850 MHz band for 3G as a clear driver of WCDMA deployment in high-growth markets. Cingular believes the 850 MHz band is important for serving rural communities, because the frequency will allow coverage with far fewer base stations. This means operators using 850 MHz will be able to profitably serve areas with a very low average income per square kilometre.

 

Connecting rural areas is important in countries such as India, for example. Some 700 million people live in villages, many of which lack health, education, financial or telecommunication services. Teledensity in rural India is in fact less than two phones per 100 people, compared to 20 phones per 100 in urban areas. Against this background the Indian government has set a target for rural coverage of 20 percent by the end of 2004, and 75 percent by the end of 2006. WCDMA will be vital in helping them achieve this goal.

 

Both India and China have already started the push for the development of low-tier 3G handsets. According to Mobile Communications International, about 40 new vendors will start making handsets in China in 2005. The country's National Development and Reform Commission says this will boost Chinese handset capacity from 300 million in 2004 to 500 million this year. In addition, fixed-line operators such as China Telecom and China Netcom, and MTNL in India, are looking to bring their customers into WCDMA.

 

Deployment of WCDMA also opens up the possibility of installing fixed-cellular terminals in rural areas, such as with the 'At Home' concept that Vodafone presented at CeBIT 2005. Ideal for business and private users in the absence of a wireline network, a fixed-cellular terminal allows users to make calls and access the internet via WCDMA at speeds of up to 384Kbps. High-Speed Downlink Packet Access (HSDPA) technology will increase this speed to well above 1Mbps.

 

HSDPA is a big step forward in efficiency in terms of the usage operators can support from a given base station. By increasing capacity and reducing data delay, HSDPA allows operators to satisfy the needs of different segments and spread costs between them. As Bäck says, WCDMA's evolution towards HSDPA opens up a range of possibilities that simply don't exist with GSM. "We are still in the first phase of 3G development, and there are still many more enhancements to come," he says. "A lot of operators will upgrade to HSDPA from the start, because then they will have the capacity to handle the increase in high-speed data subscribers when they come."

 

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