COAI clarifies – CDMA real beneficiary
Countering allegations of Qualcomm about India’s mobile spectrum policy, COAI issued a notification that it does not favor either GSM or CDMA but has set a level playing field and encourages both the technologies to co-exist for the benefit of consumers and FreeMarkets.
COAI, clarified its stand in a letter addressed to Telecom Minister, Dayanidhi Maran
We respectfully submit that the truth is, in fact, the exact opposite, since the CDMA operators not only have a huge initial advantage over GSM as a result of paying a lower entry fee, but also continue to enjoy an enormous ongoing advantage in terms of lower annual spectrum usage charges.
This effectively means that CDMA operators actually paid only around one-fifth the price that the spectrum/licence would have attracted if the same had been acquired in the open market.
Under the above circumstances, it is submitted that the CDMA demand for equal MHz spectrum is completely untenable, if the current policy is maintained, would perpetuate a digital divide in India over the long term by keeping Indian customers on limited voice only 2G services.
It is understood that if CDMA operators migrate to full mobility under Unified Access Licensing(UAL), they would have paid lower entry fee(compared to GSM operators) and would have had access to five times the spectrum capacity than GSM operators have. Qualcomm needs to understand that the economics works different in India than the rest of the world. Indians have to achieve world standards with limited resources 
Royalty is the issue, not spectrum policy – Maran
Dayanidhi Maran has made it clear that their is no fault in India’s spectrum policy. Qualcomm chief also offered to establish and fund a Telecom research institute in Chennai,India. Maran and his officials maintained that it is the handset cost and incompatability of CDMA handset with GSM technology that is scaring away consumers from opting for CDMA based services. Qualcomm has also hierd US Ambassador to India to lobby for the firm with IT ministry officials.
Soon after the meeting Maran, Paul Jacobs said
There was no meeting of minds on the spectrum issue.
The policy artificially influences operators’ technology considerations by actually rewarding the selection of the less spectrally-efficient technology and is causing distortions in the marketplace, such as the present case in which Reliance Communications reportedly must consider GSM so it can stake claim to double the amount of spectrum limits the ability of CDMA operators to pursue aggressive subscriber growth plans and introduce next-generation wireless,
Reliance has also asked Qualcomm to make CDMA handsets compatible with GSM technology to which Qualcomm is highly reluctant and has always supressed the issue. My insiders tell me that Reliance-ADAG officials have already chalked out plans on converting CDMA handsets to GSM should their grandiose GSM plan turn into a reality.
- So far talks with Tata’s have also failed.
- Qualcomm and Reliance Telecom officials are expected to meet today.
Qualcomm – Tata Indicom talks Fail
FE is reporting that the talks between CDMA pioneer Qualcomm and Tata Indicom have failed. Tata Indicom team for the meeting included Ratan Tata and Darryl Green, while Paul Jacobs led the Qualcomm team. It is understood that, Jacob expressed inability to reduce the 7% royalty which was one of the main issues on the agenda.They have also discussed the fate of Tata Indicom in the event Reliance switches to GSM. Details of this are unavailable.
In a separate development, Qualcomm officials denied a statement issued by Korean Information and Communications minister Rho Jun-Hyong that Koran manufactirers Samsung & LG can stop paying royalties to Qualcomm from August this year on handsets seold in the country. However, Qualcomm quickly denied about the royalty waiver.
Qualcomm team is expected to meet IT minister, Dayanidhi Maran later today and Reliance-ADAG chief, Anil Ambani tomorrow.
GSM Vs CDMA, 3G spectrum war in India.
With Reliance’s application for GSM spectrum, the war has intensified further. Some pointing that the spectrum allocation policy by DOT is totally flawed. Lets try to understand what the current policy is.
GSM operators have been allocated spectrum in the ranges of 890-902.5 MHz paired with 935-947.5 MHz and 902.5-915 MHz paired with 947.5-960 MHz. This gives the GSM operators total of 25+25MHz. CDMA operators have been allocated 824-844 MHz/869-889 MHz 20MHz+20MHz. DOT reasoning was that CDMA operators were more efficient in using the same and hence slightly lesser. Operator who adds more number of subscribers can get more spectrum.
While in most other countries, spectrum is auctioned off when a mobile license is provided. This helps in efficiently deploying and using the network. However, in India, due to severe crunch(Defence & Military holds the Majority), DOT awarded initial spectrum upong issuing a license and upon request additional allocation was made. Also DOT favored GSM over CDMA because the latter networks were more efficiently using the same. TRAI in its recommendations had asked DOT to have a technologically neutral approach while allocating the spectrum.
Insiders learn that Qualcomm executives will meet Telecom Minister, Mr. Maran. However, Maran is bent upon forcing Qualcomm to cut the roylaty charged to Indian CDMA operators on equipment and handsets which is abnormally high in India.
Why did this WAR breakout ?
GSM in India currently runs on 2G networks. With demand for value added services on mobile phones, networks have to be upgraded to 3G. For GSM operators W-CDMA a technology developed by NTT DoCoMo is the natual choice and migration path is also easier with the availablity of multiple equipment vendors. For CDMA vendors they have to migrate to CDMA-2000 to provide 3G equivalent services. The migration path for CDMA vendors can prove to be little bit expensive.
Qualcomm executive Mrs. Singh adds that,
- All royalty charges are levied directly by equipment and handset manufacturers.
- Primary challenge for CDMA operators in India is lack of spectrum. Current Indian regulatory policy favours GSM by making significantly more spectrum available for them.
Mr. Singh, instead of pointing fingures at Handset & Equipment manufacturers, take a lead and convince your San Deigo management to cut royalties.
It is likely that, TRAI & DOT will adopt a technology neutral approach while awarding 3G spectrum, but that may not stop Reliance to backout from CDMA.
Bharti-Airtel, worlds 10th best tech company.
India’s number one mobile service provider, Bharti-Airtel is world’s 10th best technology company as rated by BusinessWeek Magazine. Bharti has inched up from 19th rank previous year to 10th. Bharti-Airtel is likely to announce terrific growth in its customer base over the next four quarters. In my earlier blog, I had reporetd that Bharti-Airtel’s unique business model was applauded by IBM CEO and followed by Hutchinson in India. Congratulations!, Sunil Bharti Mittal.
Reliance & Nokia shake Qualcomm. Airtel CEO calls CDMA dying technology
Last week and this week their have been reports that India’s third largest mobile service provider, Reliance Infocomm would kiss goodbye to CDMA technology and slowly migrate to GSM. Reliance Infocomm’s subscriber constitute 8% of Qualcomms total subscriber base and around 10% fo the bottomline(I am not positive). This announcement has prompted Qualcomm CEO Paul Jacobs to fly to India and meet Reliance executives.
Nokia also announced that they would stop making CDMA handsets. Both of these developments sent the Qualcomm stock down 10% this week.
Sunil Mittal, CEO of Bharti-Airtel has called Qualcomm’s CDMA as a dying technology as all the GSM operators are migrating to W-CDMA to offer 3G services.
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