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GSM telecom vendors say their system outpacing CDMA

Written by: Staff
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AMSTERDAM, July 3 (Reuters) Use of the European GSM system for mobile phone communications is growing faster than its U.S. rival CDMA because it is cheaper and more flexible,vendors of GSM and related products said on Monday.

The vendors are hoping evidence of the growth in the GSM system will help them in their complaint to the European Commission in a battle over broadband pricing with CDMA-inventor Qualcomm , a senior industry source said.

Over the last three years 25 mobile telecoms operators have decided to replace or upgrade their CDMA networks to GSM or its successor known as the Wideband CDMA (WCDMA) system.

''We confirm that a number of CDMA operators are facing falling market share and are responding by switching to the GSM family,'' the GSA industry association of GSM and WCDMA equipment vendors said in a survey of the sector.

''No instances have been identified of a network operator abandoning GSM in favour of CDMA.'' GSM vendors include Nokia , Ericsson , Siemens , Philips and Alcatel .

Operators have been switching to GSM or WCDMA because the technology is available in cheaper handsets as there is more competition among GSM chipmakers. CDMA chips are only supplied by Qualcomm.

Also, GSM technology is used worldwide whereas CDMA networks cover mainly the Americas and parts of Asia.

A GSM caller cannot connect over a CDMA network and vice versa.

Six GSM vendors have complained to the European Commission as they believe Qualcomm is overcharging for the royalties which it earns for its relatively small contribution to the WCDMA system.

Operators which have recently decided to switch to GSM include United States-based Chinook Wireless, KTF Co. Ltd. <032390.KS> from South Korea, Reliance in India and Telstra from Australia.

Research group Wireless Intelligence, in a separate survey, estimated a first quarter global market share of 82 percent for Global System of Mobile Communications (GSM) and its third generation successor WCDMA, up from 55 percent in 2000.

Code Division Multiple Access (CDMA), including its faster successor CDMA2000, had a market share of 13 percent in the 2006 first quarter, up from 10 percent in 2000.

Qualcomm, as the main representative for the CDMA equipment industry, said it could not immediately comment.

REUTERS CS RS1217

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