CDMA to arrive in Poland

Foreign companies are interested in development of the CDMA internet access network in Poland. Meanwhile, PTK Centertel was said to have similar plans to transform its NMT-450 network to offer wireless internet access based on CDMA technology. This is the scenario we forecasted in our report “The telecommunications market in Poland”, published two years ago.

CDMA: worldwide outlook
GSM is the most popular standard for mobile telephony worldwide. According to recent estimates from Informa Telecoms & Media, of 2.6 billion mobile users worldwide, only some 350 million or 14% accounted for CDMA users.
According to data from the CDMA Development Group (CDG), which monitors the global CDMA market, there were a total of 188 commercial CDMA networks worldwide at the end of Q3 2006. The most popular were CDMA2000 networks, which enjoyed 302 million subscribers; CDMA2000 EV-DO was used by some 45 million; while CDMA450 networks had more than 7 million subscribers. Although technologies such as TDMA and analogue are declining, CDMA2000 is constantly growing.

CDG reports that, at the end of Q3 2006, there were 28 operators using CDMA2000 in Europe (most of them in Russia), while 10 networks were upgraded to EV-DO standard, and another seven CDMA2000 networks were being deployed.

“The constantly growing share of mobile operator revenues will come from non-voice services. This will be also driven by constant development of 2.5G and 3G-based services. There is also a possibility that PTK Centertel may support its 3G services by adding CDMA technology to its portfolio (by upgrading its old NMT-450 infrastructure)” – one of the key trends we pointed out in the forecasts section of our report “The Telecommunications market in Poland 2005-2008”, published in October 2005.

CDMA in Central and Eastern Europe
Although it is not dominant, CDMA is currently present in six countries of Central and Eastern Europe, i.e. Belarus, Czech Republic, Latvia, Romania, Russia and Ukraine.
The CDMA2000 enjoys relatively high popularity in the Czech Republic – it is used to provide wireless internet access services. The CDMA2000 EV-DO was rolled out in the country in 2004 by Eurotel (presently Telefonica O2). At the end of 2006, the service was used by more than 100,000 subscribers.
Moreover, a fourth mobile phone operator is likely to embark upon the Czech market after the country’s regulator, the Czech Telecoms Office (CTU), has granted its approval. Interestingly, the new network will operate in the 410-430 MHz band, in accordance with the CDMA standard. The operator has not yet been named, but local newspapers say that the licence is held by the Austrian operator MobilKom. The service is to be available to 97% of the country’s population.
MobilKom will compete on the Czech market with the existing operators: Telefonica O2, Vodafone and T-Mobile. Representatives of O2 and T-Mobile have already confirmed that MobilKom has requested access to their networks. The Penta financial group, which is backing MobilKom, confirmed its intention to enter the Czech mobile market this year.
Local analysts have said that if a fourth mobile operator entered the Czech market, it would probably not find a market for voice services; however, it could be very successful in regard to the provision of broadband data transmission services.
CDMA2000 networks are also developed in Russia. One of the country CDMA leaders is Sky Link, which includes Delta Telecom, MSS and around 50 regional operators based on the CDMA450 standard (in 2003 bought from Svyazinvest, which claimed that they were too expensive to upgrade). In 2005 in collaboration with Lucent Technologies, Sky Link began implementing CDMA2000 EV-DO solutions, modernising base stations, and installing equipment that would increase data transfer speeds. At the end of 2006, the company’s CDMA subscriber base amounted to around 450,000, while a year earlier it had been around 300,000.
It is worth noting that currently Russian regional state-owned telecommunications companies belonging to Svyazinvest, e.g. Uralsvyazinform, Sibirtelecom and Centre Telecom have also commenced the upgrading of their CDMA450 networks to CDMA2000.

CDMA in Poland?
PTK Centertel, the operator of the Orange mobile network, may upgrade its NMT-450 analogue network and use it to provide wireless internet access. The possible launch of the service via the NMT network is expected to take place not earlier then at the end of 2007. This has been recently reported by two business dailies Puls Biznesu and Parkiet. PTK Centertel was said to have plans to modernise the network so that it would be possible to offer internet access via CDMA technology. The network was used by the first mobile network in Poland, launched by PTK Centertel in 1992. As the popularity of the GSM standard increased, the operator withdrew from analogue network development.
At present, the migration towards CDMA seems to be a reasonable move. The opportunity for this has also been seen by foreign companies, which have recently started to ask the Office of Electronic Communications (UKE) about the conditions for converting the 450 MHz frequencies band into the CDMA2000 EV-DO network. The UKE officially confirmed the interest from the side of the foreign operators; however, no other details, including operators’ names, have been disclosed.

Nevertheless, PTK Centertel’s position seems to be privileged as the operator’s reservation of the frequencies is valid until 2016. Marcin Gruszka, a spokesperson for Orange, revealed to ICT Update Poland that the operator has recently received the decision from the UKE on this matter, which maintained in force the decision issued by the previous regulator (URTiP) regarding frequency reservation. According to Puls Biznesu, the operator wants to prevent the UKE from cancelling the reservation because of PTK Centertel’s failure to use the frequency. Mr Gruszka told us that the operator is seriously interested in the network conversion to CDMA, and that is why the operator wanted UKE to maintain the frequency reservation. On the other hand, he underlined that no final decision had yet been taken and the issue will be discussed within the managing board of the TP SA group and France Telecom.

Last but not least, it may be noted that the use of the PTK Centertel’s NMT-450 network for CDMA purposes exactly meets our forecasts, presented in the report summarising the situation on the Polish telecommunications market which was published in 2005.

Pawel Olszynka
Head IT&Telecoms Analyst
PMR Publications