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Vendors can make more revenue from selling WCDMA than cdma2000 networks

August 14, 2003

Wireless infrastructure vendors don't want to give the impression that if their customers have to ask the price of their products and services, they can't afford them. Then again, in the world of WCDMA and CDMA2000 network equipment, the companies selling the smaller amount of gear won't suffer too much in the revenue area because they're also selling the more expensive of the technologies.

Ericsson maintains its hold on the top spot in wireless infrastructure revenues because it's the leading provider of WCDMA, which is the 3G flavor most GSM operators will use. It's also the more expensive of the choices. So, while fewer WCDMA builds are underway than CDMA2000, Ericsson and other companies offering WCDMA network products are generating just about as much revenues for next-generation projects as are their CDMA2000 competitors.

"It is much more expensive to rollout the WCDMA network," says Charles Ufongene, a senior infrastructure market analyst for competitive-intelligence firm Telecom Trends International. "While there is a much larger number of CDMA2000 networks, the fewer number in terms of WCDMA sort of compensates because of the much higher costs of rolling out these networks."

Nortel Networks is right behind Ericsson as No.2 in infrastructure revenues. Like Ericsson, Nortel is strong in one next-gen market, but it's the opposite market. Given the greater activity in CDMA2000 gear sales, where Nortel trails on Lucent Technologies, and the higher prices for W-CDMA sales, which is in Ericsson's favor, the two companies are likely to maintain their network equipment rankings.

 


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