GSM and CDMA are the two most prevalent mobile communication technologies. Both technologies have the same goal: to divide the finite RF spectrum between multiple users.

TDMA (Time Division Multiple Access - underlying technology used in GSM) does it by chopping up the channel into sequential time slices. Each user of the channel takes turns to transmit and receive signals. In reality, only one person is actually using the channel at a specific moment. This is analogous to time-sharing on a large computer server.

CDMA (Code Division Multiple Access) on the other hand, uses special digital modulation Spread Spectrum which spreads the voice over very wide channel in pseudo random fashion. The receiver undoes the randomization to collect the bits together and produce the sound.

As a trivial comparisson imagine a UN party where couples from different countries are invited. In GSM, each couple takes turns talking. They talk for a short time and then stop to let another couple talk. As there is never more than one person speaking in the room, no one has to worry about being heard over the background noise. In CDMA, each couple talks at the same time; however they all use different languages. Because (we assume) that none of the listeners understand any other language than that of their partner, the background noise does not create any problem.

Advantages of GSM
GSM is mature, this maturity means a more stable network with robust features.
Less signal deterioration inside buildings.
Ability to use repeaters
Talktime is generally higher in GSM phones due to pulse nature of transmission.
The availability of Subscriber Identity Modules allows to users to switch networks and handsets at will.
GSM covers virtually all parts of world so international roaming is not a problem.

Disadvantages of GSM
Pulse nature of transmission interferes with some electronics, especially certain audio amplifiers.
Intellectual property is concentrated among a few industry participants, creating barriers to entry for new entrants and limiting competition among phone manufacturers.
GSM has a fixed maximum cell site range of 35 km, which is imposed by technical limitations.

Advantages of CDMA
Capacity is CDMA's biggest asset. It can accommodate more users per MHz of bandwidth than any other technology.
CDMA has no built-in limit to the number of concurrent users.
CDMA uses precise clocks that do not limit the distance a tower can cover.
CDMA consumes less power and covers large areas so cell size in CDMA is larger.
CDMA is able to produce a reasonable call with lower signal (cell phone reception) levels.
CDMA uses Soft Handoff, reducing the likelihood of dropped calls.
CDMA's variable rate voice coders reduce the rate being transmitted when speaker is not talking, which allows the channel to be packed more efficiently.
Has a well-defined path to higher data rates.

Disadvantages of CDMA
Most technologies are patented and must be licensed from Qualcomm.
Breathing of base stations, where coverage area shrinks under load. As the number of subscribers using a particular site goes up, the range of that site goes down.
Because CDMA towers interfere with themselves, they are normally installed on much shorter towers. Because of this, CDMA may not perform well in hilly terrain.

Izvor: Wikipedia