Business Daily from THE HINDU group of publications
Friday, Sep 08, 2006
Business Daily from THE HINDU group of publications Friday, Sep 08, 2006 |
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Info-Tech - Outlook Reliance seeks nod for pan-Indian GSM services Our Bureau
Switching tracks First Indian operator to switch to competing tech Lack of cheap CDMA handsets hindering growth In talks with Qualcomm to slash royalties
New Delhi , Sept 7 Reliance Communications has approached the Department of Telecom seeking permission to offer GSM-based cellular services in 21 telecom circles of the country. The company had earlier applied for six circles, including Delhi and Mumbai. When contacted, Reliance Communications officials said that the move was in line with the company's enhanced focus on GSM. However, it is clear that the company would continue their current focus on CDMA and would deploy GSM for future expansion just like many global CDMA operators who are using GSM for future expansion. "The enhanced focus in GSM would catalyse Reliance's subscriber growth, as it would be able to gain market share of the GSM segment as well,' said a company official. Market analysts had earlier said that the Reliance foray into GSM was a positive move for the company, as it would enable the operator to leverage the scale offered by the technology, which is used by more than 70 per cent of the global mobile operators. Reliance had raised concerns of cheaper CDMA handsets not being made available in the market, which was hindering its growth. The company has had a series of meetings with the promoter of CDMA technology, Qualcomm, to reduce royalties, which could enable it to deliver cheaper CDMA handsets. Most of the CDMA handsets in the country are being subsidised by the operator to be competitive with GSM operators. This is the first instance in India when an operator has chosen to switch to a competing technology. Internationally, China Unicom and the US-based AT&T have made similar switches. Reliance has close to 20 million mobile subscribers to its CDMA-based service. Though Reliance Communications already offers GSM-based services in the six circles of Kolkata, West Bengal, Madhya Pradesh, Orissa, Bihar, and the North-East, it had been betting big on the CDMA business so far.
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