NEW DELHI, India-The Indian wireless market, so far a preserve of GSM, has been opened to the competing CDMA technology in a big way. CDMA growth is expected to pick up in all segments of the telecom market-rural telephony, urban fixed wireless services and potentially cellular. Industry leaders expect 1 million CDMA lines to be operational within one year, if nothing serious goes wrong with the policy.
India plans to license a fourth operator in each of its telecom circles, or coverage areas, within a few months. The license will be technology neutral, meaning CDMA also has a chance to compete in India’s lucrative cellular arena.
The Department of Telecommunications (DoT) decided to provide fixed wireless local loop (WLL) phones in all the country’s 600,000 villages by 2002, for which orders have already been placed with LG, Lucent and Hyundai. State-owned fixed-line operators BSNL and MTNL will roll out CDMA lines all over the country in a phased manner. MTNL has contracted Motorola to set up a network of 50,000 WLL mobile lines in New Delhi, while BSNL has already launched its WLL service in Gurgaon in the Haryana telecom circle.
Among the six existing private fixed-line operators, Tata Teleservices has rolled out 26,000 fixed wireless and 1,000 limited mobility lines based on CDMA in the Andhra Pradesh circle, and Bharti Telenet is setting up a 50,000 limited-mobility line CDMA network in Madhya Pradesh.
“CDMA mobile service by regulation is limited to SDCA (short distance calling area), and hence, GSM customers who need roaming and go out of the city often, will prefer to continue on GSM. But heavy users of mobile phones, restricted to a particular city, will use our services. Such customers would potentially migrate to us from GSM,” said S. Ramakrishnan, managing director of Tata Teleservices.
A clutch of more than a dozen private operators is waiting to get licenses from the government to start CDMA-based “limited mobility” services across the country. If all are given licenses, India may soon have close to 100 CDMA networks operational.
“If India wants to see China-like exponential growth, this is the route to be taken. The entry of CDMA will lead to more competition and ensure increased penetration in short periods. Also, GSM growth will be constrained due to limitations of the spectrum. Moreover, CDMA can meet 90 percent of mobility requirements at the cost of a landline phone,” noted Pramod Saxena, executive director of continental India for Motorola India.
The biggest scoring point in favor of CDMA is the low tariff fixed by the government. The limited mobility tariff is the same as landline tariffs.
“Given that limited mobility is allowed and the tariff is attractive compared to GSM, I believe that customers will switch to WLL operators. Also, since limited mobility covers a fairly large area under SDCA, very few people will have a need to roam to other systems and pay roaming charges to mobile operators,” said Sam Samra, senior director of technology programs at the CDMA Development Group, an association representing CDMA carriers worldwide.
Sensing the large size of the market, all key CDMA manufacturers have firmed up their India plans. Motorola said it will target one-third of the CDMA market, including infrastructure as well as handsets. In the handset market, Samsung announced aggressive plans to capture 50 percent of the market by the end of the year.
“We believe the government has decided to let both the technologies operate in order to achieve its teledensity targets. With clear distinction established through limited mobility for CDMA and full mobility for GSM, we see both these technologies developing simultaneously in India,” stated K. S. Kim, managing director of Samsung Electronics India Information and Telecommunications.
However, fast CDMA rollouts will depend on the resolution of policy and spectrum-related issues. Cellular operators are demanding a level playing field vis-a-vis CDMA operators in terms of spectrum charges, revenue sharing and interconnection fees. CDMA players are also demanding a stable policy and regulatory environment. They feel that the spectrum allocation of 1.25 megahertz initially and increasing to 5 megahertz for every basic operator will not meet the spectrum needs to serve large numbers of customers.
“Sufficient contiguous spectrum needs to be allocated to WLL operators,” said Samra. He added that import duties should be reduced if India wants to meet a high teledensity target, because it lacks domestic CDMA manufacturing capability.
