February 18, 2004

Conflicting technologies may stall cell mergers

Conflicting technologies may stall cell mergers
A hotly competitive field in North America and South America. The standards issue is a real factor in the M&A opportunities for carriers. CDMA reportedly has technical, capacity and quality advantages over GSM, but we all know the most efficient standard is not the one that always wins in the marketplace. GSM may be dominant only because it's older and cell phones took off earlier in Europe and elsewhere

If Verizon continues to stick with CDMA and it can continue to add new customers and have cost advantages of common technology and scale, it should be able to compete effectively. CDMA makes Sprint a likely acquisition for Verizon. On the other hand, if Verizon Wireless expects to expand outside the US, it may have to wait for 3G technology.

Verizon's best bet is to add customers at a faster rate than their competitors.

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