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Wireless Network Technology: GSM vs. CDMA

The original cellular technology, dating back to the 1980s, was based on an analog signal. Basically, it was a radio signal, but unlike your local FM station, cellular radio signals traveled only a short distance. This enabled the carriers to let lots of people all use the same frequency across a particular geographic area. During the 1990s, new wireless licenses were auctioned off, and the newly licensed carriers built out their systems using digital technology. (The term PCS, or personal communication system, became popular, but it referred to a digital system.) These new digital systems had numerous advantages over traditional cellular analog, including:

  • More secure phone calls, as voice conversations are digitized
  • More feature-rich (caller ID, text messaging, etc.)
  • Less fading and static
  • Generally longer phone battery life
  • More capacity per channel

The last item is particularly important. Since digital capacity is much more efficient than analog, the carrier can offer a lot more service for the same amount of capital investment. This cost advantage allowed the entry of new digital players into the game, with prices below those being offered by the older analog carriers. To level the playing field, the older carriers began to develop their own systems, overlaying a digital system on top of their existing analog setup. This added even more capacity to each market; the resulting glut is one reason why airtime prices fell rapidly and are continuing to drop.

CDMA, TDMA, GSM: What's with All These Different Digital Technologies?

Imagine buying a TV that picked up only NBC, and having to buy another to pick up ABC or CBS. That is basically how digital wireless evolved in the U.S. Competing digital technologies — CDMA, TDMA, iDEN, and GSM — are supported by various carriers, and your phone won't work from one system to another. Contrast this to the way things work in Europe, where a single GSM standard evolved, albeit one incompatible with the U.S. GSM frequencies.

Progress is being made, however. The major TDMA carriers switched over to GSM, as this is a much better technology for supporting data services. Additionally, many U.S. GSM phones now offer multiple bands, including those that will work in much of the world (although often at very high rates).

Wireless Carriers by Technology Used

CDMA Alltel, Sprint, U.S. Cellular, Verizon
GSM AT&T, T-Mobile
iDEN Nextel

AT&T (including the former AT&T Wireless) and U.S. Cellular were formerly on the TDMA standard; they have now changed over to the technologies listed above. Although the TDMA protocol remains available in some markets, it is primarily for existing customers with older phones.

Nextel uses a proprietary technology called iDEN. It is basically digital cellular combined with a two-way radio feature.

Mobile Virtual Network Operator (MVNO)

An MVNO is a cell phone company that doesn't own any wireless spectrum, but instead buys it from a network operator such as Sprint. Essentially, an MVNO is a marketing company that believes it can build a profitable business targeting niche markets such as Hispanics or teenagers. Prior to 2006, most MVNOs offered prepaid service, with TracFone and Virgin Mobile among the notable-name providers. Recently, the market has seen the launch of several postpaid MVNOs, including Tello, Ting, and US Mobile.

Analog Cellular

While largely forgotten these days, the original analog network will continue to be maintained by the wireless industry at least through 2008. There are still some situations where analog is the only signal available, although these are now primarily in remote rural locations.

If you have a CDMA or TDMA phone that has an analog mode (these phones are often called “tri-mode”) and your carrier doesn't have digital service where you want to use your phone, you may be able to utilize the analog network. Depending on your rate plan, such usage may incur roaming charges, but having it available does provide an added layer of coverage for anyone visiting sparsely populated regions. Analog backup is generally not available on GSM or Nextel phones and most of the newer CDMA phones support digital bands only.