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?"

Comments

Excuse me?

[fluxrad]

Could you provide a couple of links to back that one up?

GSM = cheap?

[Xenna]

I don't know how they do it but I've been to many poor countries where lots of people seemed to be using cell phones. Maybe it's because the GSM market is very competitive that the services can be so cheap.

In Europe it is rare for a 14 year old kid not to have a GSM. I understand that the situation in the US is quite different.

BTW: the Forbes article that is linked doesn't even contain teh word 'phone'!

Re:GSM = cheap?

[Xenna]

It's not unusual for Americans to have a flawed view of what happens in Europe (the reverse is also true). GSM is not a government mandated standard. It was developed by a consortium of commercial companies.

As to subsidies, the Dutch KPN company had to pay the state hundreds of millions of dollars for a G3 license. In Germany they paid billions for the same license. Strange way to subsidize a company, don't you think?

As a result many telecom companies are currently in trouble because G3 services (and customers) have so far failed to materialize. The reason is probably that GSM and GPRS (aka G2.5) are 'good enough' for the moment.

I don't think GSM would have been as competitive if it had been pampered.

X.

Re:GSM = cheap?

[DrXym]

Not just competitive but a mature and proven technology with broad industry support for the standard and numerous heterogenous solutions for customers and networks. Not to mention roaming and SMS.

That CDMA isn't used boils down to common sense. GSM is used everywhere with few exceptions (even the US has GSM) so that is the baseline. It would be just stupid to choose some other standard and miss out on those lucrative roaming charges not to mention pissing off your customers at the same time.

Re:GSM = cheap?

[Aceticon]

The situation in Europe was that the landline phone companies were usually a state-owned, legal monopoly.

When mobile phones came that cosy, outdated, calcified environment was shattered by new entrants:

• The mobile phone technology offered services that the landline technology couldn't offer (access anywhere, roaming, SMS)
• The slight advantage that the old telephone company had in terms of already having an already in the ground voice network was not enough to provide a barrier to entry for new companies in the mobile telephony area
• The new mobile phone companies started competing amongst temselfs and against the old telephone company. They came up with new ideas (pre-payed telephone cards, ...) and offered more services on mobiles (voicemail, ...) than had ever been available for landline telephones (let's just say that the old monopoly companies never felt the need to invest in services for they're customers)

The outcome of all this is that in Europe today still, landline telephony is crap (pay-per-minute charges, basic service) while mobile telephone is incredibly successful.

Still, since mobile telephony prices are constantly droping (thus becoming more competitive against landline), the old public telephone companies have mostly been privatised and the lanline telephony market has been liberalized, things are (slowly) improving for landline also.

Re:GSM = cheap?

[dackroyd]

Could be something to do with the fact that they can share the mobile phone.

The Economist has run a couple of stories on how development agencies can give micro-loans (~$100) to poor people in Africa and India, to allow them to buy a phone. That person then charges other people in their village a small fee to use the phone.

Result: massive improvement in quality of life for villagers as they can phone up to get day-to-day market prices to get the best prices for the foor they produce, can get medical assistance over the phone, can organise work etc.

Once a phone is shared between 30 people, the cost for each of them really does come down quite a bit....

Why go CDMA when G3 is being rolled out?

[nounderscores]

In australia G3 phones with graphical full colour web surfing, video conferencing and PDA features are being rolled out. Why go with plain vanilla CDMA?

Why not fly if you're having trouble walking? It uses different muscles.

Yea!!!

[Timesprout]

A positive outcome from the war with Iraq. Mohammed Said Sahaf got a job in the Qualcomm PR department

Poor premise about mobile phone

[fruey]

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?

Well the US happens to be the exception in the mobile phone market. You have to PAY to accept calls that people are making to you. Ridiculous. The European market would never accept that, the only time they pay to be called is when they're roaming.

Now, in Tunisia a group did a study for mobile phones, used the same logic, and now the country is lumbering with way below needed capacity of GSM service, and over 6 months waiting lists for activation, last time I checked. Mobile phones become a real status symbol in the developing world, and also allow someone (with prepaid schemes, especially) to be contacted from outside their country by relatives in the diaspora. This is why mobiles are popular. The market is much more open if you have the caller pick up the tab for calling the phone.

You guys in the US should revolt. It is disgusting that both caller and receiver should have to pay for a conversation.

Re:Poor premise about mobile phone

[stoops]

You guys in the US should revolt. It is disgusting that both caller and receiver should have to pay for a conversation

actually, the caller doesn't even have to pay when calling a cell, as long as its a local call (unless he's calling from a cell himself).

there's a simple reason why only charging the caller in north america won't work: cell phones use the same area codes as land lines. thus, there would be no way for the caller to tell whether he's making a free call to a land line or a paid call to a cell phone. to get around this problem, all cell phones would have to be issued new area codes. and that would be pretty chaotic.

Not everyone in India is poor

[Anonymous Coward]

It's a country with a population of over one billion people. If just one percent are well to do then there are more people in India that can afford a mobile phone than countries like UK, France and Germany, at five percent then there are more than the whole of the EU or the USA.

Then there is the fact that there are millions of early GSM phones floating around Europe that are virtually worthless here. Who wants to but say a Nokia 5110 today? Clean them up slap new covers on, a new battery and ship them out to places like India.

Finally you forget that laying masses of copper wires to every house is a very expensive operation. With a lack of existing infrastructure it may well be cheaper to stick up mobile masts than putting down a copper pair to every house in down town Delhi, or Bombay.

Re:GSM = working

[leonbrooks]

Many Indians - so I am told by my oft-resident expert - use mobile 'phones because it is reasonable to expect them to work, which is more than can usually be said for the landlines.

When will they learn

[hashinclude]

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.

From a subscriber's point of view

[raj2569]

I am a subscriber of Reliance phone and my expierience in one word is confusion . I am yet to receive my first bill and have no idea how much it is going to be. I had a BSNL mobile and has not decided to ditch it yet. I have also not given my Relience number to any one. All incoming calls are to my GSM mobile, which incidently is also free.

Regarding interconnectivity, I did not had any problem calling any one after they have started billing. The call clarity is excellent. I have no problems with the range also. I recently had a trip to Goa via road. (Trivandrum -> Mangalore -> Goa -> Bangalore -> Madurai -> Trivandrum) and except in forests and other deserted places Relience has range, But BSNL was even better, and I would say Relience is a close second.

The Video and Audio are working as advertised. I have a low end monochrome phone so cannot comment on the quality, but I guess it should be ok. They have a menu option called R-World and it has video audio and lots of other services.

They also have a dialup internet service where phone is connected to computer via usb cable and connects to net at 115,200 bps. The cable costs around Rs. 2000. In the demo I saw they used a dialer in XP and connects to an unknown number. The sales guy put his own number in the phone no field. Other than that it is all standard. (TCP/IP and PAP) I am hoping to get it working on Linux once I get hold of it. And things gets even better when I get a Sharp Zaurus and I am online any where in India :)

They do not have roming. They have some thing called TSS (Temp subscription service) Where I have t o dial *444 (etc...) from a new location and I get a new number. It is also told that i will be reachable in my old number also. But have not tested this. The customer call center is help full and reachable.

raj

PS: did not check for spellings, pl overlook the errors :(

The huge Indian middle-class

[jordandeamattson]

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.