In July 2007, Telkom Kenya took the market by surprise when they launched a wireless product based on Code Division Multiple Access (CDMA). The competitors at the time, Safaricom and Celtel, felt short changed. The Telkom Wireless product did not attract excise duty like their counterpart GSM products from the competition, meaning the cost to the consumer was lower. Moreover, Telkom Kenya did not have to pay for the mobile service license since the product was based on license to provide fixed wireless service with a region such as a province. Apart from voice, the company could now deliver data to any part of the country. By far, the company had a great advantage and the strategy was brilliant.
Fast forward to 2015, Telkom Kenya,
now Orange, has halted the CDMA operations due to lack of advancement of the
technology and its unviability in the market. According to the Communications
Authority of Kenya report Quarter 2 2014/2015, the number of subscribers on
CDMA has continued with a declining trend to 132,017. Comparing this to the
total number of GSM mobile subscribers by all operators standing at 32,768,828, there is a significant
difference. So, what happened? Why couldn’t such a great advantage lead to astronomical
number of subscribers on CDMA? The scenario in Kenya depicts the battle
of the CDMA and GSM technologies as witnessed in other parts of the world, GSM
is dominant with approximately more than 70% of the global market share.
CDMA is neither a viable nor competitive and has lagged behind
as GSM advanced to 4G (LTE) at 100Mbps and now the yet to be standardized 5G. 3G
CDMA networks, known as Evolution Data Optimized (EV-DO) is stuck at 3.6Mbps. The
major difference between GSM and CDMA is the way subscriber information is
stored. For GSM, the Subscriber Identity Module (SIM) card stores all the
information on the mobile device. This means that subscribers can migrate from
one GSM provider to another easily, as long as the mobile device is not locked
to a particular provider, most aren’t. With number portability, consumers can
now maintain their phone numbers as they migrate. On the other hand, CDMA
operators usually store subscriber information including phone book and
scheduler information, on the operator’s database. CDMA phones are more or less
locked to one provider. In Kenya, there was only one CDMA provider thus there
was no provider to migrate to.
Another essential difference is
that, generally, CDMA can't make voice calls and transmit data at the same
time. The user will either use data or make calls; there are instances when
this affects the quality of service. Its rival, GSM, has capability to handle
voice and data simultaneously on 3G. The user can browser while making calls
simultaneously hence an improved customer experience. The area which GSM takes itself
from its competition with CDMA is in International roaming. Most mobile
providers in the world are on GSM technology. Availability of quad-band
handsets makes it convenient for business travelers to move from one country to
another while they mobile devices adapt to the available GSM frequencies
dynamically and offer roaming service. CDMA does not have this edge, only few
select countries have CDMA while the frequency range is limited.
The ripple effect of the advantages
of GSM over CDMA above is that most manufactures prefer to make GSM mobile
devices and most providers venture into GSM research and deployment. CDMA has a
bleak future with more subscribers moving to GSM and some of the global
operators such as Verizon planning to move to LTE. The future seems to be in
LTE. The Long Term Evolution (LTE), a new generation of mobile network
technology, promises to revolutionize the use of voice and data services. LTE
gained significant momentum as the dominant next-generation mobile access
technology throughout 2008. Commercial LTE launches will initially appear on a
small scale in Japan, the U.S. and Sweden in 2010, with larger players in
Western Europe following in 2011 to 2012. The technology landed in Kenya in
2015 and soon all providers in the country might have this technology. In the
end, the consumer is the main beneficiary with most bandwidth at a lower cost
and better customer experience.
