Indian Telecom Industry:CDMA subscriber base reaches 50 million mark
CDMA vs. GSM? – Which is more ubiquitous? Well, the obvious answer is GSM, but this answer may not be that obvious few years down the line – CDMA is quickly catching up with GSM; and the subscriber base (for CDMA) in India has already surpassed 50 million fixed and mobile device users.
As per the report from CDG,
- 50 million subscriber growth reached this milestone only four years after the technology’s introduction to the market, while it it took GSM more than ten years to reach the same number.
- CDMA growth rate exceeds than that of GSM on a monthly basis (5% vs. 4,1%).
- With up to 2.01 million net subscriber additions in June 2007, CDMA2000’s 5 percent growth rate exceeded that of GSM, at 4.1 percent,.
- Reliance Communications and Tata Teleservices, are among the top 20 fastest-growing operators in the world.
- CDMA2000 is quickly becoming the technology of choice for emerging markets.
- Reliance has embarked on one of the largest CDMA2000 network expansions on the planet—with plans to reach more than 20,000 towns and 300,000 villages.
Key reasons behind this growth are:
- Availability of very low-end (VLE) handsets – There are currently 45 VLE CDMA2000 devices from 14 suppliers available below US$50 in wholesale price.
- Rapid expansion of the CDMA2000 networks into the rural areas of India to deliver state-of-the-art telephone and broadband Internet access
- Price gap between 2G GSM low-end handsets and 3G CDMA2000 handsets has narrowed to only $4 USD
To add to this, BSNL is also pursuing it’s CDMA strategy very strongly (after it faced capacity crunch in GSM segment)
Summary of Indian Telecom Subscriber base
Overall, the total number of telephone subscribers in India has reached 225.21 million (i.e. 22.5 crore, and the overall tele-density now stands at 19.86). Here is the breakup:
- Total wireless subscriber base stands at 185.13 million
- Total wireline subscriber base is 40.09 million
Of the 7.34 million wireless (GSM, CDMA, WLL-F) subscribers that were added in June,
- GSM additions were 5.2 million, and
- CDMA accounted for 2.1 million.
Teledensity in India
- Teledensity in India is low with 50 per cent of the area and 40 per cent of the population not covered by the service providers.
- To connect the unconnected, the operators needed to invest around Rs 50,000 crore per year
- CDMA operators are demanding MNP (mobile number portability) while GSM operators are opposing that. [source]
I do see an increasing demand for CDMA phones – they have more packaged features (FM radio/music player) and are available at a very cheap price (in local colorful flavors).
Having said that, CDMA may not be the ‘executive phone’, but definitely has a strong appeal for the ‘Bottom of Pyramid‘ segment.
What do you think? If you use GSM, what will make you switch to CDMA?Apart from the price/value benefit, does CDMA has a better network quality/coverage?
Or will you prefer dual mode phones (Spice Telecom has already launched dual mode cellphone) ?
Please share your comments.
tags: indian telecom industry
, Image credit:india-cellular
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About the author - Ashish Sinha is a Startup Mentor/Product Strategy Coach, and the founder/chief editor of pluGGd.in.
He has launched/managed couple of products (consumer as well as enterprise) in US and India, and now consults with startups/small businesses on their product/media strategy. He can be reached at: ashish (at) pluGGd.in [+91 98452 06443]
Hi Ashish,
Great article – I think a few of the uses below would drive CDMA growth more apart from the factors you mentioned.
1) Data connectivity over CDMA. One may dismiss it offhand but people like Reliance have built great uses piggybacking on CDMA’s inherently superior data and connectivity. I was surprised when I gifted my Dad (who uses Reliance and is totally a newbie in technology / phones) a cool GSM phone. He asked “Can I book train tickets through this?”, Can I check cricket scores?
I was pleasantly surprised to know that. CDMA (and reliance especially) id driving behavior and geting acceptance.
2) Price and moving to a higher model – CDMA is typially priced well lower than GSM and Reliance etc have made it easy to move to a higher end phone (in case u need to).
3) Connectivity issues – I have personally faced lots of issues with GSM connectivity vis a vis CDMA (have both). I totally empathise with the Kajol ad, in which she says “17th floor pe connection Gayab!”
Great piece of analysis. The only reason why I’ll shift from GSM to CDMA is better network. Technically, CDMA is better than GSM but the only problem is you are tied up with the mobile number..
Hi Anoop,
I totally agree with ur remarks. But the issue with being tied up with a mobile phone will eventually phase out with new mobiles launched with RUIM cards. But the quality ensured in CDMA is spectacular and its quality is best tested in huge cities like Mumbai, Bangalore etc where GSM (time slot based) is becoming utter failure.
I have used GSM for two years and am currently on CDMA for another two years. I find, voice quality on CDMA is unbeatable. (Choice of handsets is lousy, though.)
CDMA uses available spectrum efficiently, hence the number of towers required to cover a given area is lower than GSM, which makes it cost effective. Apart from that, Reliance has always been aggressive in its pricing. So, it will continue to be cheaper alternative.
I guess, CDMA can add another 100 million subscribers in next 5-7 years.
this report might give a new insight to you guys on why CDMA is able to catch up with GSM
http://www.slideshare.net/pacificleo/mobile-handset-value-chain/1
as they say its all about numbers
I have been using Reliance for over 3 years. I was never unhappy with the tech. per se.
As you correctly point out in the post, they have very good entry level phones and various data features like cricket scores etc.(Pratyuh’s point).
With more aggressive push from Reliance and Tata Indicom(these days), I see the CDMA usage going up.
However, the concern I have is we will be left with a kind of duopoly in this area (Reliance, and Tataindicom) in the CDMA.
Also how’s the game going to change with the 3.5g if it ever roles out in the next few years?
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Gsm is better in india due to only availiablity of wide gsm network.
One thing is important is that people are not aware about advantages of cdma.
do you know the future of cdma mobiles in india
Ankur – You might want to check out this report: http://www.pluggd.in/2007/12/future-of-mobile-vas-in-india-market-research-report
I have been using Reliance for over 3 years. I was never unhappy with the tech. per se.
As you correctly point out in the post, they have very good entry level phones and various data features like cricket scores etc.(Pratyuh’s point).
With more aggressive push from Reliance and Tata Indicom(these days), I see the CDMA usage going up.
However, the concern I have is we will be left with a kind of duopoly in this area (Reliance, and Tataindicom) in the CDMA.
Also how’s the game going to change with the 3.5g if it ever roles out in the next few years
I have been using Reliance for over 2 years. I was never unhappy with the tech. per se.
As you correctly point out in the post, they have very good entry level phones and various data features like cricket scores etc.(Pratyuh’s point).
With more aggressive push from Reliance and Tata Indicom(these days), I see the CDMA usage going up.
However, the concern I have is we will be left with a kind of duopoly in this area (Reliance, and Tataindicom) in the CDMA.
Also how’s the game going to change with the 3.5g if it ever roles out in the next few years
i m telecom student of pakistan.
i have a question.
how we can solve the problem of selective fading?
thanks.
dani