Andersen Consulting, Detecon, Telemate Mobile Consultants
The GSM-CDMA Economic Study
Executive summary
Executive Summary
V: 13/AC - Feb. 16, 1998
2
The GSM-CDMA Economic Study
Objective of the study
The GSM family of standards has been successfully adopted by a large number of countries,
particularly within Europe, and is now the leading digital wireless standard worldwide. As the
growth of the GSM market continues to accelerate, operators facing the prospect of over-crowded
networks are looking for cost-effective expansion solutions. For example, GSM operators in Beirut,
Guangzhou, and Melbourne, to name a few, are already experiencing “hot spots” -- core areas where
demand is much higher than the average capacity of the network. Other European operators are
likely to encounter similar situations in the medium term. As a result, a variety of solutions for
network enhancement and expansion have been proposed.
Existing and proposed solutions for GSM operators include the deployment of micro-cells, half-rate
codecs, improved frequency reuse techniques and dual band solutions. A newly proposed solution
uses the CDMA air interface (IS 95 based) instead of, or along side, the current TDMA technology
incorporated within the GSM standard. The use of a CDMA radio front end within a GSM network
entails the addition of CDMA base stations and base station controllers. Seamless operation for end-
users is achieved through the use of dual-mode GSM/CDMA handsets. The CDMA solution is
referred to as "GSM-CDMA" since it is fully compatible with the existing GSM-MAP network
standard. GSM operators facing significant network expansions over the next few years need to
analyze the short and long-term costs associated with the various proposed solutions. In addition,
new and emerging wireless operators are concerned about the level of investment needed to compete
successfully in their respective markets.
To evaluate the possible cost benefits of a GSM-CDMA solution in relation to other GSM solutions, a
study utilizing different