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Delays and Problems for India's New CDMA Network
securitas writes "The NY Times and Bloomberg are reporting that Qualcomm is touting an expected 6 million Indian subscribers using CDMA by year end. But the facts seem to fly in the face of that with Reliance experiencing technical problems and delays with the launch of India's first CDMA network, covered on Slashdot late last year. Part of the problem is that the GSM operators won't allow Reliance's traffic on their networks, not to mention a court challenge and no approval by regulators. Is this just a hopeful diversion from the loss of the Iraq contract, where MCI chose GSM? How does a country where the per capita annual income is $390-$420 (depending on whose number you use) expect people other than the elite to afford mobile phone service, even if the handsets and service charges are heavily subsidized? Forbes discussed the problem of affordable mobile phone service in Africa where incomes are similar. Is this another wireless/fibre optic bubble akin to the one we saw a few years ago?"
according to m commerce times the GSM networks have been in europe and asia since the 80s so the tech is more mature. More mature means that mass production drives down the cost.
- You set up a home/factory/school someplace where you can't get a landline. More often that not that's just temporary.
- It's more cost effective for your particular use.
I haven't seen or heard of anyone who uses mobile phones because the landlines are unreliable. Might be a rare few, but they are probably an anomaly.The official per capita income is 380-420, do you know the number of people who dont report their income?
Anyway around here, every cabbie, peon and roadside hawker has a cell phone.
One note - mobile penetration in Europe is around 50%. At least 50% of the US population can easily afford a mobile (if Europeans can then Americans can). The UK has 60 million inhabitants, Germany 80, the US 300. 30 million people from the UK + 40 million from Germany and 150 from the US = 220 million > 10 million (1%) or 50 million (5%) of India's population.
Add together Europe's and the US population and you have 600 million rich people.
Many more people can afford phones in Europe and the US than can in India - regardless of India's larger population.
I agree with your point, though, that the country is large enough that a very low cellphone penetration still make up a sizable number, but the EU is close to a population of 400 million, and as far as I know all member states have a cell phone penetration of more than 50%, some well above 80%.
But regarding price, you are right. That is why cell phone penetration is Africa has increased so rapidly. It's massively cheaper to build out a wireless network than a wired network - the only reason we're being charged more for wireless in Europe and the US is that the landline network is already there, and has been written off decades ago.
In Nigeria, on the other hand, where a population of 120 million have been sharing around 500.000 landlines, and installing more lines typically means extending the network, it took only 6 months before more people had cellphones than landlines because it is much easier to get a cellphone than to get a landline installed.
are spreading FUD!
YIAARI (Yes I am a resident Indian) and from what I see, CDMA networks are doing just fine!
Reliance has sorted out all the interconnect issues and everything is going on smoothly since May 1, 2003. There are more than a dozen players in mobile phones (GSM, 3G GPRS, CDMA 2000 1x WLL) so it is natural that this thing took time... two months more than they had projected.
In this cut-throat market, which is growing at >98% per annum, it is natural that one player will make things hard for other, especially if the other player is offering long distance calls at less than 1 US cent per minute (within their nation wide network and other WLL networks). If anybody thinks that it mean demise of Indian cellular market he must be smoking something damn hallucinating.
As for the per capita income bullshit, yes the PCI is low, but you are using the wrong standard. In the US, the median and average incomes are pretty close, so companies usually interchange them for their analysis... a grave mistake if they do so for countries like India and China where median and average incomes are damn far away. Apart from that Indian consumer is very selective in things he purchases... given value for money, he won't hesitate in buying and with current trands in economy where our forex reserves are on all time high and IT sector is doing quite well, people do have money to spend on credit cards, mobile phones and other luxuries. Yes, salaries are around 5-6 times lower, but you got to understand that living expenses are lower by 6-7 times (my monthly food bill is around $60-$100 and I eat pretty lavishly).
In short, this news is OLD and full of BS. Anyone who's thinking CDMA in India is sinking is on crack... and FYI Reliance is a 1000 KG gorilla and one of the biggest company over here... they have already laid over 3000 km of fiber all over country for CDMA and data connections (yes they work... equivalent to dual ISDN) and is doubling that figure in next 6-12 months... and they pretty damn know what they're doing.
- mritunjai
Reliance is not India's first CDMA network. Others have already deployed networks that are showing signs of growth; in places like Chandigarh, for instance, the number of mobiles have outstripped the number of landlines for the first time in India. Reliance Infocomm's troubles are only partly because of regulatory concerns; the other more significant problem is that its distribution network for the phones is showing signs of failure.
Not that the telecom regulatory rules are okay, (here's a very interesting and candid interview with the telecom minister on the tussle and other aspects of reform), but let's not write off Reliance that easily. They are one of the largest Indian companies around and have succeeded even during the (socialist, insulatory) Licence Raj period in the petrochemicals industry, traditionally considered closed to private sector participation.
They've had some massive lobbying effort in Indian political circles; Roads and Buildings Dept employees often complain how they get calls from their political masters in the middle of the night because they threatened to go against Reliance Infocomm's country-wide road-digging and laying of optical fibre network (a process which, while admittedly professional and impressive, apparently bends a few rules here and there).
Let's face it:- these people are powerful enough to make rules for themselves. They won't give up so much investment without a fight.
More than mere navel gazing.
CDMA service has started in India just a few months back. If anything, people are not yet ready to switch to CDMA (Reliance or Tata Indicom) simply because it is not a well-established technology, even though it is quite cheap (40p - 100p per minute depending on various factors).
For GSM service, the whole country is divided into "Cellular Circles", and operators need a license PER CIRCLE to operate there. However, with CDMA, there is no such zoning, as CDMA operators are not (yet) allowed the full privilege of supporting Roaming and other facilites enjoyed by regular cellular operators.
GSM has been around in India for close to 8 years (well established? I would think so). CDMA has just about started. So *OF COURSE* people are reluctant to go in for CDMA mobile phones.
As the YIAARI above mentioned, the interconnect deals have been fixed as of 1st may, so there are no more fights (so to speak) amongst cell operators, just price wars.
And one *very good* thing we learnt and implemented early on was to have different codes for cellphones as opposed to land lines. Now actually we have multiple categories --
* All 98aa xxxxxx numbers are cell phones, with the 'aa' being the Area code (so for example 9811 xxxxxx is Delhi, while 9822 xxxxxx is Pune).
* All BSNL (www.bsnl.co.in) cellphones are 94aa xxxxxx
* All reliance phones are 3
* All Tata-Indicom numbers are 5
* All BSNL Landlines are [2] depending on the city of operation.
Makes life very simple for everyone, as they instantly know what number they are calling.
US is now divided as the "Red" and "blue" states. Red States = communist countries. Coincidence? I think not
Anyway, there are unlimited plans for around 50 in most European countries as it happens. There are also unlimited plans for local/national calls and Internet available from around 50 month, including high speed ADSL or Cable connections.
I think the caller picking up the tab to disturb me on my portable phone is more just. I don't like getting disturbed on it anyway.
Just because some things (like free local calls) are taken for granted, doesn't mean that this is really the best economic model for the telcos. Look at Haiti (who continue to have free local calls, because they used the US model as a starting point) - they have enormous problems now because there would be a revolution if the telco starting charging for local calls. But they really do need to charge for local because telephony is a big mess and unsustainable with "free calls" to the Internet and then hackers... etc
Check out the bigger picture before insulting a whole continent. And don't take anything that could be misconstrued as anti-American as being a direct attack, perhaps it is just constructive criticism.
Conversion Rate Optimisation French / English consultant
... about the mobile regime in India is that contrary to other countries, in India, the mobile wars are overlooked and regulated by TRAI (telecom regulatory authority of India).
TRAI makes sure that operators are competing/fighting on fair grounds and big companies are not wiping out small players by predatory pricing. Thus making it easier for small players to compete big gorillas.
Reliance issue was actually TRAI (and others) kicking it in butt for twisting (if not breaking) rules by allowing transparent roaming in its WLL service. By the set rules, WLL operators are not allowed to provide roaming facilites, but Reliance twisted the rules by providing trasparent and dynamically re-registering clients in the areas they visit and forwarding calls to that number. Thus the user dynamically gets allocated a new number BUT all calls on his original number are automatically forwarded to the new number... thus providing a roaming-kind-of facility. This is not roaming service by the book (the user gets a new number) but in spirit its twisting of rules, and TRAI kicked it in balls for this.
However, while taking decisions TRAI officials (much detested so-called beaureocrats) keep in mind public benefit... this is evident in the final settlement that they allowed Reliance to continue BUT then it has to go by the book that says charges have to be network provider agnostic... ie. calls from all WLL operators will cost the same... so now other WLL operators cal also offer similar pricing.
TRAI makes it a point to review policies often and make corrections. It forces companies to provide cost based tariffs so that big companies can't eat small ones for lunch by offering cheap service for short durations to take out small ones and then increasing prices. This also makes sure that state owned telecom providers don't subsidize their services to attract customers. Thus the state owned providers are competitive and actually make profit rather than losing money.
Right now TRAI is reconsidering the license structure and license pricing... I'm hopeful that once its done it will open doors for more players to enter at cheap costs and those savings in costs will be passed on to customers in a fair way.
- mritunjai
I'm not sure what you mean here. Considering that I could use my Ericsson in Sweden, Norway, Finland, USA, the entire god damn Europe and most other parts of the world without a hitch tells me that GSM works just fine. CDMA coverage is... Well... Mostly zero around here. However - both standards work. Doesn't that mean that they both suck, but in different ways?
War is one of the most horrible things a human can be exposed to. And one of the worlds largest industries.
While the average income in India is quite low, this is due in large part to the disparities in the Indian economy at larget. While you have a family that makes $30 dollars a year, you have folks that make $30,000 a year. The Indian middle class is 50 to 100 million folks out of a population of 1 billion. They have the income and the desire to embrace cellular service.
I just returned from India - on a business trip for my company - of the 200 people at our facility in India, I would estimate that 95% had cellular phones. When I went visiting, I saw people in the middle-class who had cell phones everywhere. Even my driver - who would be considered lower, middle-class, had a cell phone.
Another factor to be considered is the quality - or lack - of landlines in India. It can take 3 or more months to get a phone line installed by the PTT. And just as long to get a service call. And you thought dealing with your cable company was hard? Wait until you hear some of the horrow stories that were shared with me.
Finally, I think GSM has this market locked up. Folks in India go to Europe and the US frequently. They want one phone to meet their needs throughout the world. For them - and me - Triband GSM is the way to go.
Bottom line: beware the averages, they lie! Look at the size of the "middle-class" and the income of this middle-class. These are the folks that will adopt cellular service.