Reliance pushes CDMA in India with Qualcomm, Alcatel-Lucent

Reliance Communications, a CDMA network operator in India, tapped Qualcomm Inc. and Alcatel-Lucent to help it expand its wireless network in India in what Alcatel-Lucent called one of the largest telecom expansions undertaken by a telecom operator anywhere in the world.
Reliance-with about 30 million subscribers, the largest CDMA operator in India, according to the CDMA Development Group-is expanding its CDMA2000 1x network to address voice and data services for rural, urban and enterprise markets in India. The goal, according to Reliance, is to cover more than 20,000 towns in the country, from 8,000 towns today.
Alcatel-Lucent said it was awarded an all IP-based contract to provide Reliance next-generation infrastructure using both GSM and CDMA technologies. The $400 million contract will expand Reliance’s networks to 20,000 towns and 600,000 villages, Alcatel-Lucent said.
Meanwhile, Reliance is working with Qualcomm on handset chips. Kanwalinder Singh, president of Qualcomm India, said that Reliance’s expansion focuses on rural India. The two companies have worked together to make low-cost CDMA handsets available in the country and largely succeeded, Singh said. Last year, the average selling price (ASP) for entry-tier CDMA phones was about $40. Today, that figure is less than $25, below the ASP for entry-tier GSM handsets, according to Singh.
The lower cost of entry-tier handsets should allow Reliance to more than double its network footprint in rural India and reap the rewards of rapid growth for its partners such as Qualcomm and major handset vendors, including LG Electronics Co. Ltd., Huawei and ZTE, among others, Singh said.
“That’s the significance of this announcement,” said Singh. “We’ve achieved affordability in handsets and that will enable Reliance’s expansion and its ability to further diversify its data service offerings.”
Singh said that India’s government has “aggressively pursued” policies to encourage the provisioning of broadband services in both rural and urban areas.
India represents a particularly bright spot in CDMA technology’s outlook worldwide, according to James Person, chief operating officer at the CDG. Since a 2003 ruling by the country’s Supreme Court that opened the market for CDMA to compete with rival GSM technology, CDMA has captured 47 million, or 27%, of the country’s 178 million mobile subscribers, Person said.
Currently, a lack of 800 MHz and 1900 MHz spectrum is inhibiting CDMA expansion in highly populated urban areas of India, according to Person. Spectrum in rural areas-where Reliance is focusing its current network expansion-is sufficient, he said.
Right now, large swaths of CDMA-friendly spectrum for urban areas is held by India’s military and, thus, new spectrum availability is “a political question,” Person said.