Financial Daily from THE HINDU group of publications
Friday, Dec 19, 2003
Financial Daily from THE HINDU group of publications Friday, Dec 19, 2003 |
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Info-Tech
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Telecommunications Gartner sees 96 pc growth in cellular phone base Our Bureau
Mumbai , Dec. 18 FULL-MOBILITY code division multiple access (CDMA) cellular services and an aggressive competitive response from GSM operators are expected to drive growth in the Indian mobile market in 2004. According to research published by Gartner, provisional forecasts suggest that cellular connections will reach 56 million by the end of 2004, representing 96 per cent growth over the current year. "The pace of growth has been accelerated by India's adoption of a unified licensing regime, which has legitimised the use of limited-mobility CDMA services for wide-area cellular operation," says Mr Bertrand Bidaud, Vice-President Asia-Pacific, in Gartner. Growth in the CDMA cellular market is driving major changes through the wireless industry, prompting cooperation between handset vendors and carriers. "These changes are expected to reshape the cellular industry landscape in India during 2004, with both GSM and CDMA operators reducing tariffs and bringing down barriers to entry," says Ms Kobita Desai, Principal Analyst Telecom in Gartner. The CDMA market has been driven by the low price of service tariffs combined with the ready availability of CDMA terminals at highly subsidised prices. Samsung and LG enjoyed an early mover advantage working with operators such as Reliance to install the infrastructure, supply local-branded handsets and work through the problems of service deployment. In the latter part of 2003, Nokia and Motorola started to make their presence felt in the CDMA market, introducing a range of new devices and securing sizable supply agreements with operators GSM operators that were initially dismayed by the introduction of CDMA services have responded with aggressive promotions and handset subsidies to maintain their share of net new connections. GSM growth has been spurred by the availability of a range of attractive new handsets at different price points, with special focus on the low-tier market. "The relatively stable situation in the GSM market reflects the efforts made by some major handset vendors during the past 18 months to regularise distribution channels and scale down black-market activity, which has dominated the Indian handset market in the past years," says Ms Desai. Volatility in the Indian cellular market is expected to continue for at least the next 18 months as the main operating groups carve out their future market positions, while some players attempt to establish niche positions.
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