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CDMA 2000 1x Comes to India
nilesh writes "Yesterday, Reliance Infocomm launched one of the largest CDMA networks in the world [Google news]. This wireless network will cover 90% of India's population on a backbone of 60,000 kms of optic fibre. They have dreams of providing an Internet-enabled Java-powered CDMA2000 1x phone to almost every Indian citizen for around tariffs as low as 40 paise per minute or 0.8 cents per minute. The Samsung/LG/Kyocera phones will be replete with applications ranging from internet banking to video on demand and online gaming. Now all we need is Quake for Java and we'll have college kids playing deathmatches with each other in classroom at 144kbps. The next game revolution is in sight."
Answer: The Internet and a booming Consumer middle class.
As an Indian, I grew up amongst the ideas of conseravationist approach to life - use less electricity, lead as less materialistic life as possible - remenant of Gandhi's self-reliance theory. Since we don't have resources so we must consume less.
This changed with the 90s reform, globalization, and the Internet. People learnt to consume - letting go off securities of saving money and spending judicially to credit cards and financing cars. Cable TV and MTV (Asia) encouraged the youth to let go of the seemingly secure shackles and embrace a consumer lifestyle - Ray Bans, Nike, Levis, Budweiser etc. All these "new" ideas found roots and manifestation is spending money on things besides necessities. The circle of consumption is now established and people are open to the idea of faster, better, cheaper.
The Internet acted as catalyst. The two "sects" using the Internet were rich people and academia. And then the students in academia went on to be corporate managers etc so it spread. The Internet brought Linux few were in for ideology while most are in for the coolness factor. In India a brainy chap is cool although with the 'aping the west' the term "geek" has made it into the pop-culture. These "geeks" are wannabe geeks.
So socio-economic transformation and H1B people's exposure to business and s/w has development has tilted the scales in favor service economy. Service economy depends on tiers of services which is another win for business spending. All these factors contribute to a demand for communication among other things.
India has a healthy middle class of 300million - more than US' entire population and more for China who has witnessed fruits of globalization earlier and with Taiwan next doors as an evidence of success, Chinese and Indian are eager to catch up.
IMHO, US has the greatest and strongest economy however current trend of "cutting cost" to serve an unknown master is not doing anyone any good.
This has absolutely nothing to do with helping the poor, or trying to get a phone to a beggar in India. It has everything to do with the fact that Reliance is providing the right service at the right time.
Reliance is not just a J Random company in India. Reasons why this will be a killer service in India.
They have done their groundwork beautifully well. They have been laying fiber optic all over the country, for quite a while, and have enormous clout. As an example, where other providers have so far been unsuccessful in getting govt. clearance for certain services in India, it looks like Reliance will not be having that problem.
Reliance is using existing technology customised for India, at the Indian Inst. of Technology Madras. Details here.
You have NO idea the way the demand for bandwidth for both voice and data is growing in India. Want figures? Find them here.
Do you know the proposed cost of deployment of RIL's telecom plan? You pay Rs.3000 initially ($60) and Rs.600 monthly ($12) you get the instrument and the service, but will have to service for a period of 3 years, as part of the Rs.600 will go towards your instrument. Just look at their pricing schemes.
In fact, pricing is one of the reasons why Reliance will succeed. Reason? They chose NOT to use GSM as the initial cost is high, but wanted to help atleast the middle class.
;-)
If you still are not convinced, goto Chaoszone, run by cygnusx. He has been keeping track of this for a long time, and has very interesting links on the current scenario and WHY this WILL work.
You are forgetting one very basic point. Yes, India has poverty to handle, but you do not solve it by denying all other technology, atleast that's what your attitude sounds like. There is a significant chunk of the middle class for whom the rates that reliance offers is EASILY affordable, and that comes to a significant portion of the population of a billion.
Read this interview with Mukesh Ambani. Forget quality, they'll see gold through quantity. And that is exactly what Reliance is banking on.
And as a geek, I sure as hell hope they do, am looking forward to getting one of their J2ME enabled thingys
Somehow, I doubt such a plan would succeed. Is such a low tariff even possible, much less for this kind of expensive service?
Reliance is a fairly old but very successful company. I have been following news about them for several years and have never seen them do anything that is both big and naïve. While I cannot say that people come first for them, surely business and money do.
These are at least some of the reasons why we should expect costs of telecom services to be low in India:
Technology - The infrastructure was built practically from scratch in the last 6-7 years. Even regular phone service coverage was around 4-5%. As opposed to the US, which has been building its infrastructure over much a longer period - laying copper and then fiber. India is starting with fiber for which the cost-per-bit is very low. IIRC, Reliance built its fiber optic network in the last 3-4 years.
Labor costs - One of the biggest costs in building infrastructure is labor. But labor is very cheap in India. I expect labor wages to be around USD30 per month.
Competition - There is a lot of competition, the other major players are Bharati, TATA, and the government (yes, the government is in this too). So, including Reliance that makes it at least four major competitors. There are some small companies (BPL, Birla, Satyam, etc. - don't know what happened to Worldtel) too but so far they have not had any major impact.
And all this is the exact opposite of what you see in the US. So...
I copied this sig.
This system is WiLL which means no handoffs. This type of system is great for replacing existing (or non-existant) land line infrastructures to single points (like homes). This reduces the complexity of the system and therfore the cost of installation and upkeep. However, this system doesn't work if the user is moving around, so it's no substitue for a true cellular system.
You simply do not understand India or the times that you live in. So what does Microsoft really "own". Guess who is the biggest bigger - Coca Cola, FedEx or Microsoft ?
So what is the fastest growing industry now in India ? Software ? wrong - it is Biotech. So who are slated to be the largest H1B visa holders from India in 3 years time ? Software ? no Teachers. So what am I trying to say ? India simply doesnt have the time nor the resources for the old model of "build brick industries, sell stuff, wait for profit".
Indian middle class is 300 million strong - much more than the entire population of US combined. We have population, a HUGE middle class and highly skilled labor force that costs a pittance. So our model is export workforce to any, I repeat *ANY* sector that needs skilled people, rake in money and build highways with that money. Thats what is happening today and thats what will happen in the future.
From the guys who started it all. By the way this company is no joke. These guys(Ambanis) started with literally nothing to turn into a fortune 500 company with an annual revenue of $13.5 billon in a short span 27 years. So, when they say we will do it, they are taken very seriously. Reliance Infocomm Ushers a Digital Revolution In India http://www.ril.com/eportal/media/NewsDetails.jsp?i d=N279&page_id=72
Second, in mid 2003, with an enterprise netway revolution by providing 100 mbps Ethernet links to every desktop and device to half a million enterprise buildings initially and eventually to 10 million buildings.....
Third, in end 2003, with a consumer convergence revolution by providing high speed Ethernet links to 80 million homes initially and eventually to every home.....
The Dhirubhai Ambani Developer Programme will create a new platform for innovations in information technology. One thousand developers of software solutions are being enrolled now to eventually grow to 100,000 developers by December 2003
Reliance is a huge, listed, petro-chemical company. They are the largest listed company in India. They are not in the business of charity. They are in the business of making money. Their business plan for this launch is hard-nosed and focussed on making money. It is not altruistic. Their vision is to : - provide a phone to every citizen at low tariffs - AND make money on every subscriber There is no government intervention / funding on this project. So there is no question of public funds being spent on providing cell phones to citizens when they should instead be spent on poverty alleviation. Surely, living in a capitalist economy like the US, you agree that a corporate has the right to invest its money in whatever venture that it may decide, will bring the greatest returns.