CDMA: The Die Is Cast

The wireless market in India has been doing exceptionally well, with a
subscriber base of around 10.15 million as of October 2002. In India, GSM has a
5—6 year lead time in comparison to CDMA and dominates the wireless scene with
around 9 million subscribers as compared to CDMA, which is estimated to have
around 1.15 million subscribers.

But CDMA has a faster growth rate.
While the GSM network is inducting 0.4—0.5 million subscribers per month,
CDMA network is adding around 0.11 million subscribers. With the ‘big bang’
launch of Reliance Infocomm’s services and with Tata launching services in new
circles, 0.36 million CDMA subscribers are likely to be added per month.

According to Qualcomm, the worldwide CDMA subscriber base stands at around
134 million (as of September 2002). Of this, Asia-Pacific contributes around 50
million. In India, of the 1.15 million CDMA subscribers, around 440,000 are for
WLL (M) and the rest are for fixed wireless terminals (FWT). On the CDMA front,
things are moving at a fast pace, with Tata Teleservices launching services in
Tamil Nadu and Karnataka, to be followed by launches in Delhi and Gujarat in the
first half of December 2002. Reliance Infocomm is also moving as per the
schedule of 28 December. BSNL is also enhancing its pilot project and is going
for a commercial deployment of WLL (M) in a big way.

Big Four
Four players, Reliance, Tata, BSNL, and MTNL will push CDMA in the country.
Reliance is well ahead on the front and is planning to make its Infocomm
operations a success by putting a lot of focus and synergy, supported by a good
deal of financial muscle.

Reliance Infocomm is being touted as the service provider that will change
the face of CDMA in the country. (CDMA innovator Qualcomm is also betting
heavily on Reliance, having invested around $200 million for a 4 percent equity
stake.) Reliance is planning to deploy 5 million lines in more than 1,000 cities
spread across 18 circles (except in J&K, A&N, and Northeast). Initially,
both Nortel and Lucent were in the race but according to sources, Lucent edged
an advantage over Nortel in terms of logistics as well as the capability to work
in Indian conditions (read, the period when India—Pakistan tension was at its
peak). According to industry sources, till date, Reliance has given CDMA
infrastructure orders of around 3 million lines to Lucent Technologies. Talks
for another 2 million lines are reportedly on with Samsung, Nortel, and Lucent.

“Fixed wireless is dead but it is okay for certain applications like PCO operations or any other application that is compulsory due to regulation”

Vijay K Gupta, 
director, business development, Asia, Lucent Technologies Asia Pacific

In spite of having tasted the success of CDMA in Andhra Pradesh by being the
first company to commercially offer CDMA services in the country, Tata
Teleservices has been moving cautiously on the CDMA turf in new license circles
of Delhi, Karnataka, Tamil Nadu, and Gujarat. On the CDMA infrastructure front,
the company has opted for a pessimistic approach and has given a 610,000-lines
infrastructure order to Lucent for all its new circles.


BSNLAll India33,432,87417,677196,699
& Delhi

In Maharashtra, where Tata has acquired Hughes, the company is
planning to provide CDMA-based service once the acquisition process is
completed. It is expected that the company will launch CDMA-based services in FY
2003-04. At present, the company is providing TDMA-based fixed wireless services
in the country and its fixed wireless subscribers are around 49,552 (as on 31
October 2002).

A strong GSM player, Bharti has reported that it will foray into the CDMA
space through its basic services arm Bharti Telenet. The company has applied for
spectrum and will initially limit its services for fixed wireless in the new
circles of Delhi, Haryana, Karnataka, and Tamil Nadu, along with Madhya Pradesh
where the company has been providing CDMA-based fixed wireless services in the
past. The company has kept its options open by acquiring spectrum space.
Depending on how the market moves, the company can launch fixed wireless
services. And with the spectrum license in hand, the company can also think of
launching WLL (M) services in future.

“CDMA’s growth in India is high because of the low teledensity and the absence of an extended network. Players get ample room to enable leapfrog to wireless technologies”

Rajan Mehta, 
VP (service provider segment), Nortel Networks

The incumbent operators–BSNL and MTNL–are also moving at a fast pace on
the CDMA front. MTNL has given expansion orders of 1 lakh lines each to Fujitsu
for Mumbai and Motorola for Delhi. The company has also come out with a tender
of 4 lakh lines each in Delhi and Mumbai. BSNL too is expanding the pilot
project that was done in 22 cities. It has given an order to LGSYS for 2.1 lakh
lines. The company has recently finalized a tender of 5 lakh lines for which
purchase order is yet to be placed. It has recently floated a tender for 745,000
lines for which bids are yet to open.



Players like Shyam Telelink and HFCL Infotel are also moving at a fast pace
in their respective circles of Rajasthan and Punjab. Currently, the service
providers do have the monopoly in a majority of the cities but soon we might see
Reliance and BSNL also providing CDMA services in these circles.

The Infrastructure Market
Taking the overall performance of all the service providers in the country,
Voice&Data estimates that India will have around 2.4 million subscribers by
March 2003 and 8.7 million subscribers by March 2004. In volume terms, CDMA is
forecasted to achieve a growth of 552 percent in 2002-03. In 2003-04, the growth
is forecasted to be around 253 percent. This sudden surge in growth as well as
volume is due to the launch of new circles by Tata Teleservices and all-India
launch of Reliance. This, coupled with the aggressive approach of incumbent
operators, will lead to those numbers.

A Northbound Market

The CDMA equipment market in India will grow at a rate of 192 percent in fiscal 2002-03, in revenue terms

In number terms, the growth will look even more impressive

There will be a cumulative subscriber base of 2.46 million as against 376,741 the previous fiscal
Thus, CDMA subscriber base will register a growth of 552 percent

According to VP Chandan, president, Qualcomm India, the country will reach a
base of 10 million subscribers by the end of December 2003. Even WC Kim,
managing director, LG Electronics System India echoes the same feeling.
According to him, by March 2004 India will have 10 million lines and CDMA will
achieve in three years what GSM has achieved in eight years.

The majority of CDMA lines will be for WLL (M) handsets. Vijak K Gupta,
director (business development–Asia), Lucent Technologies, who was till
recently head of Lucent in India, feels that fixed wireless is dead but it is
okay for certain applications like PCO operations any other applications which
is compulsory due to regulation.

In FY 2002-03, the CDMA infrastructure market in value terms is estimated at
Rs 2,788 crore as against Rs 955 crore in FY 2001-02. In terms of value, the
market will grow by around 192 percent in FY 2002-03. With the increase in
deployment of CDMA infrastructure in the country, there has been about
20-percent drop in equipment prices since the last year, says WC Kim.

According to Rajan Mehta, V-P (service provider segment), Nortel Networks,
the CDMA growth rate in India is the highest because of the low teledensity here
and the absence of an extended network. This gives CDMA players ample room to
enable leapfrog from wireline to wireless technologies.

Infrastructure Vendors in India
LucentNumber one
in the country (in terms of number of lines installed) as well as No1 in
the private sector. The company has bagged large contracts from almost all
the private operators. Not very successful on the government front, the
company has bagged only few orders from BSNL
Infocomm, Tata Teleservices, HFCL Infotel, Shyam Telelink, BSNL
successful Korean player which has done pretty well in the Indian market
and is the first to achieve one million lines in the public sector. It is
the only company which has a direct presence and has its own manufacturing
base in India
Number two
Korean player in the country doing pretty well on the BSNL front
FujitsuThe only
Japanese player present  in
the country has been able to break the jinx by bagging the MTNL account.
The company has recently received the expansion order for Mumbai
MTNL (Mumbai)
MotorolaPresent in
the Indian market right from the beginning but has not been very
successful. Initially bagged Bharti which is quiet dormant and has bagged
MTNL Delhi order. Also got the expansion order for MTNL (Delhi)
(Delhi), Bharti Telenet (MP)
ZTEA Chinese
player, has recently entered the Indian market and has done pretty well by
doing a clean sweep in the 350,000 urban tender of BSNL. On the price
front, the company has given a good fight to the Korean players which have
a firm foothold in India
NortelWas front
runner in the Reliance Infocomm deal but was unable to bag the deal. The
company is now looking actively at the BSNL/MTNL market
to open its account
player has recently made its presence in India through Punjab
to open its account
player has recently made its presence in India through HFCL
to open its account 
EricssonThe company
has made its presence for the for the first time in the Indian market by
participating in the 7.5 lakh BSNL tender inspite of being in the county
from a long time
to open its account

Qualcomm is also looking at alternate revenue streams on the infrastructure
front and is promoting GSM 1X in the country. The technology is aimed at
providing the existing GSM operators the advantages of both CDMA as well as GSM
technologies. Using this technology, the GSM service providers can move to
next-generation technology by upgrading their network to 3G using the same
frequency band and expect speeds equivalent to 1X EV-DO. So, on the GSM front,
one can avail of facilities like roaming and prepaid, while on the CDMA front
the company can avail of high data rate and high capacities.

“By March 2004, India will be having 10 million lines. CDMA is going to achieve in three years what GSM has achieved in eight years in the country.”

Won-Chul Kim, 
managing director, LG Electronics System India

Currently, the chip for GSM 1X has been perfected and sampled and it is
offered to the manufacturer. They, in turn, have to come out with a prototype,
says Chandan. This chip can also be used for dual mode/dual technology, which
will be helpful for GSM operators as they can have one number for GSM to be used
for roaming and second to be used for CDMA WLL (M) applications.

The Vendors
Vendors from three countries–the US, South Korea and China, dominate the
CDMA scene in India. The US companies like Lucent, Motorola, and Nortel are
present in India and so are Korean companies like LG and Hyundai. From China,
while there are a lot of new companies but the lead has been taken by ZTE, which
has recently bagged an important order.

Lucent Technologies has been the front runner in India as it has bagged all
major deals in the private sector. Unsuccessful on the Reliance front, Nortel is
rethinking on its strategy in India and is now planning to target BSNL through a
partner and to bid directly for MTNL.

“The future of CDMA is very bright in India. The country will reach a base of 10 million subscribers by the end of December 2003”

VP Chandan, 
president, Qualcomm (India) Inc

LG has been successful in the government sector but is yet to make a mark in
the private sector.

Motorola and Fujitsu have also done well on the MTNL front. ZTE, the Chinese
company has recently bagged good orders and made its presence felt in India.

With the market opening up for CDMA in the country, many new companies are
getting aggressive either directly or through their partners. The huge size of
the CDMA market is throwing up new opportunities for vendors. At the same time,
with the competition rising, prices of infrastructure are bound to fall with
each new tender. What’s more, service providers won’t just be looking at the
prices but also evaluating the supply record and proof-of-reliability of the
vendors in the fray.

Pravin Prashant

CDMA Development in India (FY2002-03)


  • 16,000 line CDMA infrastructure order finalized early in FY 2002-03
  • 290,000 line CDMA infrastructure order finalized in June

  • Urban expansion order of 210,000 in 16 cities finalized
    in September

  • Urban infrastructure order of 500,000 lines was bagged
    recently by ZTE but the company is yet to recieve the Purchase Order

  • Rural expansion order of 473,000 lines finalized recently
    for which Purchase Order is to be given

  • 745,000 CDMA infrastructure tender issued recently where
    seven vendors participated through 11 bids. MTNL

  • Recently expansion order of 100,000 lines each given to
    Motorola in Delhi and Fujitsu in Mumbai

  • Tender issued for 400,000 lines each for Delhi and Mumbai
    yet to be finalized

Reliance Infocomm

  • Issued order for 5,000,000 lines to Lucent to be deployed
    in 18 basic services circles

Tata Teleservices

  • Issued order for 611,000 lines to Lucent for the new
    circles of Tamil Nadu, Karnataka, Delhi, and Gujarat

  • Expected to add around 100,000 CDMA subscribers in
    existing circle of Andhra Pradesh


  • Focussing more on FWT but with Tata acquiring Hughes, the company will provide WLL(m) services in FY 2003-04

Bharti Telenet

  • Plans are for deployment of fixed wireless terminal based
    on CDMA in the new circles as well as in Madhya Pradesh.

Shyam Telelink

  • Expected to add around 30,000 subscribers in FY 2002-03

HFCL Infotel

  • Expected to add around 50,000 subscribers in FY 2002-03

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