Asymmetrical Information

Well, duuuh, that's because EDGE is 2.5G and UMTS is 3G (some Telcos never even went EDGE).

Also, I wish you good luck using your CDMA phone anywhere in Europe or Asia, whereas I can travel with my GSM phone all over the world (including the US).

And frankly, from an European perspective, the US mobile phone market is sad sad joke.

Define "robust".

Steven DenBeste wrote an article about this a while ago: http://denbeste.nu/cd_log_entries/2002/10/GSM3G.shtml

I think it covers it pretty well: short version - CDMA can have more active calls in the same bandwidth than GSM.

For 2G standards (voice), GSM was better than anything else on the market at the time - The GSM standard is 20 years old this year, although the first live GSM networks didn't show up for three or four years after that. It is still pretty good. The reason why it spread was that it worked and benefited from being first to market with a decent product. The other standards (CDMA, PHS, etc. ) took longer to work the basic bugs out and suffered from problems WRT text messaging and other ways to make money, at leats in the beginning.

Unfortunately 3G (data) required CDMA technology to fly and Qualcomm is the only company that really groks CDMA. Hence Qualcomms EVDO works better than the alternative UMTS which is more expensive and less capable. On the other hand UMTS handsets can roam to GSM networks which CDMA ones can't so UMTS users get benefits from the complexity. However even Qualcomm's CDMA2000 stuff can get bandwidth limited if you have too many subscribers trying to do data things so it isn't perfect and as the price of 3G comes down we'll find out more and more how service degrades with users.

On the gripping hand WiMAX may provide the solution. WiMAX has considerably more data bandwidth available than any 3G technology and doesn't have any of the legacy voice/messaging crud to deal with. WiMAX is going to become available over the next couple of years.

Japan is majority CDMA, and Korea has an extensive CDMA network. US CDMA phones work there, too.

FWIW in Japan, because the CDMA/GSM gap means they have to use inferior phones abroad (as opposed to their twinked out gadgetphones), are working on dual-mode phones that can function on either standard. So it may all be moot in the near future, just like equipment manufacturers may be mooting the Blu-Ray/HD-DVD war.

Honestly, I think the best argument for the success of GSM is the robust, vibrant and high-innovation market for GSM smartphones / PDA phones / gadgetphones as compared to the alternatives. A GSM customer has a vastly wider array of phones to choose from because their choice is not limited by their carrier (even compared to Japan where the gadgetphones are carrier-specific). They may choose to buy a carrier-locked, subsidized phone to use with their service, but they don't have to. And they can move their SIM card to a new phone whenever they want (like I did when I got a Treo 650). The wider array of phone choice is a major reason I remain a GSM customer even given the protocol advantages of CDMA.

And frankly, from an European perspective, the US mobile phone market is sad sad joke.

Funny, because apart from Standard Griping, a couple hundred million US cellular subscribers are generally okay with it.

anony-mouse - Compared to what? Nothing at all? A plain land line? I'm curious how you've gauged what a couple hundred million people think. Or why those people would have any way of comparing US cell service to European service. (Not that I have. I only have China and the Philippines to compare to)

Technology aside, one reason our cell service is so spotty outside of major urban areas in the US is our large geographic area/low population density compared to European countries and Japan. So, because rate plans are the same for all geographic regions, coverage is rationed in low density areas.

T-Mobile has a GSM network, and has had for at least five years.

All my T-Mobile phones have worked fine in Euroland, although they do charge you $1/minute for "international roaming"...still, when you're stuck at the airport waiting for your flight, it's nice to be able to call home and tell them.

Compared to what? Nothing at all? A plain land line? I'm curious how you've gauged what a couple hundred million people think. Or why those people would have any way of comparing US cell service to European service.

In the US, there are two major physical networks: CDMA and GSM, both of which have been developed to the point that they have roughly equal coverage areas, although GSM came to the party a bit late. There are three major providers: Verizon and Sprint/Nextel operate on CDMA, and have ~55m subscribers each; Cingular/AT&T operates on GSM, and has ~50m subscribers. And as an educated guess, there are perhaps another 40-50m or so subscribers using T-Mobile, Cricket, Virgin Wireless, TracPhone, etc., probably evenly distributed between the two networks or else slightly biased toward GSM.

All of the major providers offer plans that differ mainly in perks and sometimes attempt to cater toward different types of usage profiles; the overall cost-per-minute and included base services are pretty much identical.

Now, given that the US market (unlike the European market) was free to experiment with technologies and not lock-in regulated, how did it get that evenly distributed between the major players, and why are the coverage and plans so uniform, if not for having found its level? People can and do change carriers all the time, and carriers can and do offer incentives. Regulation and tort risk have doubtless played some role in shepherding the market to its present state, but even so.

Instead of asking me what I know about the whims of a 200m suscriber market, maybe you should ask "Swiss Econ Student" where s/he got his (her) data that justifies summarily dismissing the US cellular market as a "sad joke" -- if any data s/he has.

CDMA does seem to be based on more interesting and elegant communications theory principles, so I would tend to think that it would have practical advantages in the long run. However, that is a long way from saying that real CDMA networks are superior to real GSM networks.

I am tempted to compare this situation to the battle between AM and FM radio, where technically superior FM was blocked for some time by the entrenched AM lobby. But I don't think a one-sided narrative like that can be fairly written just yet.

CDMA does seem to be based on more interesting and elegant communications theory principles, so I would tend to think that it would have practical advantages in the long run. However, that is a long way from saying that real CDMA networks are superior to real GSM networks.

Well, 3G GSM is based on CDMA The Multiplexing Technique, though incompatible with 2G (and 2.5G) GSM as a result. 3G CDMA (EVDO) is a logical extension of 2G CDMA, hence backwards and forwards compatible.

The communications theory advantages you alude to absolutely have advantages in the long run. That's why the GSM group was forced to change to them with 3G (UMTS). However, the incompatibility issues have meant that the switchover to 3G has been much trickier with GSM than with CDMA.

With CDMA, moving to 3G is very simple for users and carriers. A 3G CDMA phone will work with 2G and 3G towers. A 3G CDMA tower will work with 2G and 3G phones. Backwards and forward compatibility is easy.

With GSM, UMTS and 2G GSM are very different. Phones and towers have to include dual mode capabilities. At first, carriers proposed people having to get entirely new phones that would only work on the 3G network.

That said, the SIM card thing is nice with GSM. Although at the same time US carriers who use GSM (T-Mobile, Cingular) tend not to sell unlocked phones, negating a lot of the advantages of SIM cards.

US CDMA phones work in Korea. However, Japan uses a different frequency for wireless (GSM and CDMA) than the rest of the world, so foreign phones (of either type) tend not to work there unless they specially support Japan's frequencies. With GSM, there is the SIM card option, however.

At the very least, the CDMA technology perfected (not discovered-- the general information theory idea had been known for years, but there are important technical obstacles overcome) by the US's Qualcomm is important enough that it makes 3G possible-- or at least is so much obviously better that it had to be used for 3G.

And the GSM people hate it, but there's no way around Qualcomm's patents for the CDMA techniques used in UMTS/W-CDMA. That's why Qualcomm gets royalties even from UMTS, though lower than their CDMA royalties.

So even if UMTS takes over, the important technical advances were spurred on by the US's free market in wireless. The big European GSM backers like Nokia said that the technical issues with CDMA could never be overcome, that it was impossible. Qualcomm bet the company on showing them wrong, and suceeded. Of course, everyone hates them now for their patents and their royalty charges.

Please note that there exists a SIM-Card-like standard for CDMA called R-UIM (Removable User Information Module). CDMA in the US could look much like GSM in the US, except for the market distortions caused by the fiat declaration that GSM was superior (reducing the size of the potential CDMA market), allowing the US CDMA providers to partially close their networks off. It could have gone differently - and still could even now.

That having been said - I'm rather more in favor of CDMA than of GSM. If nothing else, the GSM providers are going to have to replace every base station they have without having a backwards-compatible fallback.

GSM didn't emerge in isolation. There wouldn't be a GSM if it hadn't
been for the earlier free market explorations in the U.S.

Therefore to compare GSM with the variety of standards in the U.S.
and say that the situation proves the superiority of the european
style top-down regulation is to fail to acknowledge the extent
to which GSM depended on those market explorations in the U.S.

There are many parallel situations in technology. For example arguably
the european standard for broadcast television is better than the
U.S. standard. But the reason it's better is that it came latter
and took note of what worked in the U.S. and what didn't. And since
europe lagged the U.S., by the time a standard was needed the technology
had advanced enough to make some things practical that wouldn't have been
practical earlier.

The historical U.S. approach is friendly towards new things and is
especially well-suited to the rapid development and exploration of
abrupt departures from the past. But being the first adopter means
that the U.S. tends to lock into standards that are just good enough.
For europe, being even just a few years later means they can lock
into slightly better standards.

That is an advantage to the top-down regulatory approach. But the
big disadvantage is that the system is unfriendly towards new ideas.
Despite all the technical sophistication of europe, almost nothing
really new has come from europe during all the time this top-down regulatory
approach has dominated.

The comments above suggest that the "GSM/Euro phones are better" argument is actually "phones with SIM cards are better".

If that's what's actually going on, why hasn't something like SIM cards been added to other phones?

The US cell market is very vibrant! We have a lot more minutes for less money than most people int he world. At least 4 major operators compete for our dollars in most areas. I am not sure you have that many in most European countries.

Why did Sprint choose CDMA? Its a lot more bandwidth efficient than GSM (up to 10x calls per carrier) and at the time Sprint rolled out its network, bandwidth was quite scarce (due to ill-conceived regs). Obvioulsy, a technology that could extract more value out of a limited resources was more appealing.

Things have changed a lot since, but CDMA is the way of the future.

At the very least, the CDMA technology perfected (not discovered-- the general information theory idea had been known for years, but there are important technical obstacles overcome) by the US's Qualcomm is important enough that it makes 3G possible-- or at least is so much obviously better that it had to be used for 3G.

Please insert obligatory pointing-out that GPS is a CDMA network, here. Just not bi-directional, but still CDMA. DenBeste, in an email exchange with me, disputed that GPS was legitimately a spread-spectrum (I honestly don't recall the exact wording, here) system, but I believe that disagreement boiled down to an argument over definitions, and if I took his objection as "they don't have all the neato bells and whistles that went into Qualcomm's CDMA implementation", we could be in agreement.

Or, in other words, it's all in the execution.

CDMA is not really a mystery. CDMA codes are mutually orthogonal, and allow user access to the full spectrum. A mathematical basis for this sort of encoding/decoding was contained in the book Modern Algebra by John Durbin, Chapter XV, 1992, for instance; it's likely that earlier editions (1979 and 1985) also contained this discussion. Orthogonality might not have been mentioned there, but it's not much of a stretch; orthogonal functions are deeply embedded in mathematics. Legendre, Hermite and Laguerre polynomials, for instance.

The long and short of orthogonal codes is they allow you to decode only the message that was encoded using that code.

Again, though: all in the execution. And if I read denBeste correctly, it's in the execution that CDMA beats the pants off of GSM.

Interesting that the only benefit claimed for GSM is the SIM card- which, as pointed out, happens to be exclusive to GSM phones, but not for technological reasons. CDMA is clearly the superior technology, and you needn't look any farther than the fact that the GSM 3G standard is a form of CDMA.

Moreover, I had to chuckle when someone commented on our sad situation here. Cell phone users here in the US make far more calls consisting of FAR more minutes than Europeans do- and we pay less for them! This is even more interesting for the fact that Europe has always had more expensive and less robust wireline networks than we have- that is what drove the wireless expansion over there in the first place. So we have already overcome Europe's advantage in that regard.

In addition, most of us can roam much farther and wider without paying roaming charges than they can in Europe. They do tend to benefit for having a better selection of phones, but on the other hand, that must not be that great because they don't use them near as much as we use our sad phones, and when they do use them, they pay more!

Slartibartfast - I thought the point of CDMA codes was that they did NOT need to be strictly orthogonal. After all, pure frequency carriers for, say, FM transmission also form a basis set of mutually orthogonal codes that do not crosstalk. The problem is that there are not enough of them to go around, so you end up with some top-heavy negotiation protocol to decide who gets to use what frequency when.

CDMA cannot create a larger set of mutually orthogonal codes than the rank of the signaling space dictates, which is the same as the number of independent frequency bands. But it can "overload" the space with codes that are statistically likely to suffer low crosstalk. There are many, many more possible pseudo-random sequences than there are pure tones, and up to a point, the cross talk among them resembles a little white noise even if they are not strictly orthogonal.

At least that's how I understand it.

One point not mentioned so far - the reason why many "US" phones don't work in Europe has little to do with which protocol they use, but rather the frequency bands assigned to each service.

Yes, phones can be built to cover all of those frequecies, and some have been, but at additional expense. So most of them aren't.

I haven't used cellphones in Europe apart from a few times in the UK but I regularly travel between India and the US. India had only GSM originally, but now has both, but most people still use GSM. One of the big differences, as anywhere, is the removable-SIM-card option for GSM, which at least CDMA in India didn't have last I knew. Incidentally, India has possibly one of the lowest calling costs in the world - my *pre-paid* SIM lets me make calls at 1 rupee a minute, which is around 2.5 cents a minute at current conversion rates.

Being able to switch networks using a new SIM is a huge advantage - when I go to England, I just pop in a prepaid Vodafone or Oxygen SIM, which lets me, for an initial price of 5 UKP (which I think includes some calltime) make and receive local calls at the local rate. Also, in all these places, receiving is free, so when I travel, I fidn that with a GSMphone and local SIM, I can get by with just asking people to call and SMSes...

The US is a few years behind Europe when it comes to cell phone services, even if their technology is lagging behind.

Switchable SIMs are a good example. The UK was offering pre-paid cell phones for years before the US got around to it. Text Messaging and Picture Messaging, Europe had them a few years before the US.

US cell phone carriers are generally slow to introduce new services to their customers. That's a reflection on the size of their networks and also on the needs of the US consumers. We're slower to buy into new services, so companies are more hesitant to introduce them, which makes us slower to buy in, around and round.

Another good example is the use of on-line bill paying and debit cards: using your bank's web site to pay your bills or using your debit card to pay them. The US is probably the only developed country in the world that still uses checks to pay bills. Europeans haven't been doing that for years.

to Xmas: I haven't written a check to pay my bills for at least 3 years, here in Connecticut. For most of the bills, I have an option to tell the utility to pull the money from my bank account every month, so I don't even need to go to any web site. And that's been done that way for a long time.

Two amusing quotes from the same guy:

Quote one:
an European perspective, the US mobile phone market is sad sad joke.

Quote two:
I'm curious how you've gauged what a couple hundred million people think. Or why those people would have any way of comparing US cell service to European service.

Dan, how did you determine it was the same guy?

It's true that CDMA has better bandwidth efficiency than GSM but that is only one factor to look at. Economies of scale are a more important driver for reducing cost of service. In this respect GSM wins hands down. The other key point is that Qualcomm effectively discourages growth in CDMA usage via high licensing fees. In otherwords they capture much of the value from the improved network efficiency rather than the carriers benefiting. I believe no licensing fees are required to use GSM. However I believe there might be some GSM related patents owned by Nokia, Ericsson and Seimens that a carrier would have to pay licensing fees to use.

As far as 3G GSM technology it is called HSDPA. I am no guru on the technology but my understanding is it will not be significantly different in terms of performance from the 3G offered by CDMA based carriers.

Globally 80% of mobile subscribers use GSM. There are several cases of CDMA carriers switching to GSM and zero cases of the reverse.

FYI - The US does not have the cheapest tariffs. The cheapest tariffs are from Bharti Airtel in India at an average 2 cents a minute and they are a GSM operator. They also have a pre-tax EBITDA margin of 59% (40% plus, if I recall the number correctly, a 19% revenue tax), which is one of the best in the business.

Arkadiy,

Yes, some people use on-line bill pay in the US. But in Europe almost everyone uses on-line bill-pay or debit cards or some other form of electronic payment.

For anecdotal verification, if you run into a European, ask them when was the last time they wrote a check for anything in Europe.

I also bow to the power of Wikipedia:

http://en.wikipedia.org/wiki/Cheque#The_future_of_cheques

CDMA cannot create a larger set of mutually orthogonal codes than the rank of the signaling space dictates, which is the same as the number of independent frequency bands. But it can "overload" the space with codes that are statistically likely to suffer low crosstalk. There are many, many more possible pseudo-random sequences than there are pure tones, and up to a point, the cross talk among them resembles a little white noise even if they are not strictly orthogonal.

The last I heard, they were orthogonal. If they weren't, you'd always be partially decoding a lot of someone elses' conversation, I think. No, the thing that separates CDMA from FM (for instance) is, as has been pointed out, bandwidth efficiency and (probably nearly as important) nonfixed channel allocation. FM is horribly inefficient; FM winds up spraying energy all over the spectrum, and you have to filter and overallocate spectrum to mitigate that. With CDMA, you can basically allocate a channel without picking a carrier frequency for that channel, which is...well, very cool.

Again, the mutually orthogonal codes is what keeps the signal clean. There's really not much sense in generating only mostly orthogonal codes, because (and I'm just guessing here) you pay a price in crosstalk, and you don't really gain very many new channels in so doing. The more new channels, the more crosstalk.

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