Advantage CDMA

It is expected that the country will see a demand for 1-1.5 million handsets in 2001-02, if all the service providers start their services within 6-7 months time.

"The company is planning to launch  other models in six months time" WC Kim, managing director, LG Electronics System India Limited (LGSYS)

GSM
has been the monopoly of European companies but this is not the same for CDMA.
On the CDMA front, the major names to reckon with are not Nokia, Ericsson or
Siemens but it is Hyundai, LG and Samsung. The fast pace of activities on the
basic services front, be it allowing multiple operators in state wide circles,
allowing limited mobility and providing Letters of Intent (LoI) to 40 operators
is a welcome sign for the entry of CDMA in the country–in a big way.

Presently, the CDMA handset market in India is monopolized by the Korean
giants–Hyundai, LG and Samsung. LG and Hyundai have been there for a long time
whereas Samsung made its entry into the CDMA market recently, with the launch of
SCH-620 phones. Though Ericsson is strong on the CDMA front because of the
purchase of Qualcomm’s wireless infrastructure business, the company is yet to
launch CDMA handsets in the Indian market and is keeping a low profile.
Recently, the company has launched its first CDMA phone in the US market called
the A1228c, which delivers superior voice quality and easy access to the
Internet through a WAP micro browser. It seems that the company would like to
test this product in the US market before launching it in the Indian market.

Motorola is presently not planning to make its presence in the Indian CDMA
market felt. U Narendra Nayak, country operations manager — India, personal
communications sector, Motorola India Ltd, said about the likely date of
entering the market, "We would plan to roll out CDMA handsets in Q3 and Q4
of 2001-02." Once it enters the market, the company will provide a wide
range of CDMA handsets varying from US $130 to US $400 added Nayak.

Handset Brands

"Presently, it is not viable but we are planning to start manufacturing CDMA or GSM handsets once the threshold mass of subscribers reaches five million per year"

Rakesh Bharti Mittal, vice chairman & managing director, Bharti Teletech
Limited

One can find two types of handsets on the CDMA front–the limited mobility
and the fixed wireless type. In India, fixed wireless terminals are mainly used
for the Village Public Telephone (VPT) market as there are many villages where
one cannot take telephone wires as they are at high altitudes or in difficult
terrain. Fixed wireless terminals are also used for urban areas, which come
under Technically Non Feasible (TNF) areas thereby eliminating the TNF area to
the minimum.

Out of the three Korean giants, Hyundai, is very aggressive in the Indian
market. The company has launched two brands–HGC 120E and HGC 310E on the
mobile front. HGC 310E costs around Rs 9,800. Both these phones support
facilities like voice mail, short message service and caller ID, if supported by
the service provider. The company is planning to launch high-end models like HGC
610E and low cost models in the range of US $100 (FOB cost) says BR Lee, general
manager, Hyundai Electronics Industries Co. Ltd. The company has supplied HGC
310E to Tata Teleservices, and HGC 120E and HGC 110 to MTNL in Delhi. On the
Fixed Wireless Terminal (FWT) front, the company has supplied 148,000 sets to
Bharat Sanchar Nigam Ltd (BSNL) in association with HFCL. FWT (voice) terminal
costs Rs 13,000 whereas voice plus data costs around Rs 18,000.

Recognizing the potentiality in the Indian market, Samsung has launched
SCH-620. The phone offers up to 5 hours talk time and up to 10 days standby
time. Major features of the phone include voice-activated dialing and voice
memo. SCH-620 cost Rs 13,000. "The company plans to have 3-4 models in the
CDMA segment within a 10 month time frame in India," says IC Chung,
director, wireless communication division, international sales & marketing,
Samsung Electronics Co Ltd. Samsung does not have handsets in the fixed wireless
terminal front. 

LG is present in the Indian market through LG Electronics System India
Limited (LGSYS) and has supplied 15,000 DM110 to BSNL. The phone provides
Internet capability, SMS, PC sync and Audio Automatic Gain Control. "The
company is planning to launch other models in six months time," says WC
Kim, managing director, LG Electronics System India Limited (LGSYS). On the
fixed wireless front, LG has bagged 300,000 terminals from BSNL through its
partner Escotel.

Demand for Handsets

We would plan
to roll out CDMA handsets in Q3 and Q4 of 2001-02.

U Narendra Nayak, country operations

manager — India, personal

communications sector, Motorola India Ltd

With the opening up of limited mobility and the government giving LoIs for 40
circles to three operators–HFCL, Reliance and Tata, things are moving at a
fast pace and one can foresee a peak demand for CDMA systems in the end of
2001-02 and beginning of 2002-03. Once the frequency is allotted, the basic
service providers will take a minimum of 6 months from ordering of the
infrastructure, preparation of the site, test and commissioning, and launch of
the service. So, by the end of 2000-01, we will see an actual demand for around
1-1.5 million handsets in the Indian market. And in 2001-02, this demand will be
around 2.5 million.

If the demand for handsets goes up, one can see prices crashing in the Indian
market as it has happened in the cellphone market. Industry insiders feel that
the price of the handset will come down to around Rs 7,000 to Rs 8,000, with the
increase in demand and low-end models being launched in the Indian market.

Manufacturing

With such a huge demand for limited mobility handsets in the Indian market,
major manufacturers like Hyundai and LG are thinking of manufacturing these
handsets in the Indian market. Hyundai will finalize on manufacturing CDMA
handsets in India, within 6 months," says BR Lee of Hyundai.

It seems that telephone handset manufacturers like Bharti Teletech are
interested in manufacturing mobile phones in the country. On the manufacturing
front, Rakesh Bharti Mittal, vice chairman & managing director, Bharti
Teletech Limited, said, "Presently it is not viable but we are planning to
start manufacturing CDMA or GSM handsets once the threshold mass of subscribers
reaches five million per year."

So, India will witness an important landmark if manufacturing of CDMA
handsets is taken up in the country.

Manufacturing will depend on the demand for handsets in the country, which in
turn will depend on the quality of service that the operators provide to the
subscribers.

Pravin Prashant