FEATURE: The Role of All-IP CDMA for Emerging Markets

UTStarcom's Manish Matta argues that an all IP CDMA infrastructure is best for emerging and rural markets. 

The telecommunications industry tends to focus on the value-add data services that 3G networks bring to developed and urban markets, particularly the increase in the operator's revenue and profitability that follows. The industry, however, tends to ignore a significant issue--basic voice and data connectivity in emerging markets and in rural areas of developed countries. Technology alone has not been the negating issue in the deployment of next-generation networks, whether wireless or wireline, in emerging nations and rural markets. The real issue has been the high per-capita infrastructure and operating cost of a traditional network. Urban users in many countries have funded rural-area communication infrastructure development via compulsory contributions to Universal Service funds. Nevertheless, rural connectivity has lagged behind the targets established by governments in developing nations. Wireless connectivity provided by an all-IP CDMA network can help remedy this situation.

Let us consider, as case studies, Bangladesh and Angola, with populations of approximately 145 million and 11 million, respectively. While their populations in absolute numbers are quite different, the teledensity figures reflecting the percentage of people with telephone connectivity are relatively similar. Both countries have fixed-line penetration of below 1 percent while mobile penetration is roughly 4 percent.

In an effort to boost mobile penetration, both Angola and Bangladesh have recently deployed all-IP CDMA2000 solutions. The reason for deploying an all-IP CDMA network as opposed to a traditional wireline or wireless network is relatively simple; it is a cost-effective means of providing both basic and advanced forms of mobile communications. In addition, operators can distribute the network elements in an all-IP network, thereby enabling local calls to remain in the local domain. Instead of all traffic being backhauled to a central point-of-presence, local traffic is directed to the nearest local gateway. This results in reduced transmission costs and significant operational cost savings for the operator when compared to traditional voice networks. Significantly greater operational cost savings are derived from the use of alternate call-transport media. Satellites are one such alternative as they overcome the terrestrial constraints and cost factors that previously hampered deployment of communication infrastructure in remote areas of the world.

Lower Tarriffs Lead to Increased Use

The optimal result of an all-IP CDMA network is that users are charged lower tariffs, leading to increased mobile penetration and network usage. In the short time that their all-IP CDMA networks have been in use, operators in both Bangladesh and Angola have witnessed an increase in network usage and connection rates. In Bangladesh, for instance, One-Tel has used an all-IP CDMA network for Greenfield deployments in the northwest parts of the country and is witnessing growth in new account signups and network usage. One-Tel sees tremendous operational benefits over legacy TDM gear, including significant cost savings and the ability to offer new value-added services.

Some return-on-investment studies conducted in conjunction with one all-IP network deployment in an emerging market estimated the operational cost savings would be in excess of 80 percent per annum compared to a traditional wireline network. This is quite significant when the absolute dollar figures are considered. While users cannot distinguish between an all-IP and a traditional circuit-switched network, they benefit from the availability of additional services and the lower per-minute usage cost. All-IP CDMA2000 networks based on 3GPP2 standard specifications have another inherent advantage--they can interoperate with standards-based CDMA/CDMA2000 network elements from other vendors making it easy to implement overlay.

Operators can deploy all-IP CDMA2000 networks in rural areas and link them to other radio access and core network elements in their networks. In other instances, operators can choose to build an all-IP CDMA network to serve both urban and rural areas. In either case, operator and subscriber both stand to benefit via reduced cost and increased service capability.

Manish Matta is director of corporate marketing at UTStarcom.