Prices of mobile handsets are set to dip and consumers spoiled for choice with US-based CDMA Development Group (CDG) picking India for the launch of a global CDMA Open Market Handsets (OMH) initiative that is projected to add 100 million subscribers in two years.
CDMA handsets have traditionally not been available over-the-counter but come bundled with the service. The CDG hopes to change this with its historic expansion of the CDMA ecosystem this year through the OMH launch, expected within October this year.
“The CDMA open market handsets will target the mid-to-high income segment offering rich features like Internet browsing, e-mail access, downloading clips, music and video streaming at competitive price points. GSM handsets in the similar price range offer merely voice and SMS,” says Perry LaForge, executive director, CDG.
As the world’s fastest growing telecom market and also the second largest CDMA market globally after US, India is a natural choice for this global launch. In May 2009 India’s CDMA market crossed the 100-million subscriber mark against 315 million for GSM, pushing Reliance and Tata to second and fourth largest CDMA operators globally. India continues to add 2.5 million CDMA subscribers every month (highest in the world).
According to LaForge, the CDMA opportunity in India looks even more promising with the entry of new brands, expansion of existing players Tata and Reliance and addition of new operators like Sistema Shyam, Virgin Mobile and BSNL. “India is a promising market both for upgrades for the existing CDMA subscriber base as well as for new subscriber acquisitions. The CDMA-OMH launch will give consumers both choice and flexibility,” he says.
The CDG claims that CDMA mobile service in India has grown much faster than GSM. CDMA was launched in 2003 and hit the 100 million subscriber mark in six years in May 2009 with just two operators. GSM, which was launched in 1995, took seven years to hit the 100 million subscriber number, says LaForge.
When probed about Tata and Reliance now encouraging customer migration to their new GSM networks, which will hurt growth, LaForge disagreed. “Reliance and Tata continue to be extremely supportive of CDMA. In late May both companies publicly stated that they are only offering GSM because they don’t have access to additional spectrum for CDMA.”
According to the CDG, CDMA has played a central role in making mobile communication affordable and accessible to all in India. Within a year of CDMA’s introduction, tariffs dropped 42% and teledensity increased by 1.7%, says LaForge.
“The OMH initiative is expected to revamp the CDMA handset distribution network altogether. Its success could further influence CDMA strategies in other countries,” says Nakul Duggal, senior director, Engineering Services Group, Qualcomm, US.