Stepping onto the ferry from Vypeen Island, Krishnan Kutty realizes with a start that he doesn’t have enough cash. But he has to get his weekly supplies, and Vakkachen, his big supplier at the wholesale market at Ernakulam, won’t give him credit. But wait. There’s an ATM on this boat. Kutty goes up, swipes his SBI card. The CDMA network takes six seconds to carry the information from his card in Cochin to the bank in Bombay. In a minute, Kutty heads back, Rs 4,000 in hand. But he’s lost his seat by then.

Some 1,400 km away, Rajinder is just completing a home delivery for Hindustan Lever at Hiranandani Gardens, an upmarket housing complex in a Mumbai suburb. The lady of the house doesn’t have cash handy. No problem; Raju takes out his card machine, swipes her card and authenticates it online, and he’s off in a minute. He, too, has a CDMA phone clipped on to the terminal.

A petrol station attendant on the Mumbai-Pune expressway accepts a credit card payment, using a mobile POS terminal connected over the Reliance CDMA network

With a half day of driving around Kolkata ahead of her, Roma Ghosh has called in a new taxi service whose flyer she found in her newspaper last week. She realizes she’s low on cash, so tells the driver to go to an ATM first. No problem, the driver says, if you wanted cash to pay me, I take cards too. He has an HDFC terminal with a CDMA phone.

There’s one thread common to all these. A CDMA phone and Reliance Infocomm’s network.

While all the hype has centered around Reliance’s mobile voice services phones and their spiraling subscriber base, the company has shown remarkable innovation in developing a virgin market: data.

It’s the first mobile operator to take data seriously. While Airtel, Hutch, et al will immediately counter this and claim to have data "available" for over five years, India’s GSM operators either actively discouraged data use through ridiculous pricing, or have simply not bothered. And it didn’t help that their data service was mostly under 10 kbps.

The Infocomm Strategy
The most visible Reliance Infocomm offerings are the IndiaMobile and IndiaPhone. Amidst GSM players’ protests about Reliance violating the letter and spirit of TRAI regulations (the company started off with a license for WLL "limited mobility", but essentially offered full mobility, with roaming, after a fashion), IndiaMobile has succeeded in redrawing the map and speed of cellular phone penetration in India.

The GTRAN card costs Rs 14,700, and plugs into your laptop to provide quick wireless Internet access at most places in India. The flimsy antenna gets in the way and carries no warranty, and the software has trouble with power management. But the card works well and connectivity is cheap—one of the three plans gives unlimited access for a flat Rs 500 a month (for 100 MB of data). The big plus over using a mobile phone: no cables, phone or charger to lug around. On the flip side: there’s no phone: it’s data only; and off-the-shelf sales and tech support, and information, is poor as of now. Connect speeds are better than dial-up PSTN, between 50 and 100 kbps at different times. Overall: Expensive to buy, cheap to use, invaluable for the mobile laptop user, and it has no competition.

At the beginning of this year, IndiaMobile had nearly 5.6 million subscribers, while IndiaPhone (fixed wireless terminals) had over 290,000 subscribers, according to figures from the Association of Basic Telecom Operators (ABTO). Clearly, Relaince hastened the emergence of the "unified license" regime.

Apart from the enterprise apps, Reliance is gradually emerging as a major ISP through its R Connect business (See sidebar: "Connect on the Go"; table: "What’s on the Reliance Menu")

The Money’s in Banking
Oka and his team are focusing on two volume applications from the wireless stable: credit card point of sale (POS) authentication, and the wireless mobile ATM. It has offered its wireless services to different banks, to let them set up POS terminals—devices that read a card and obtain authorization from the bank—in remote locations. These are places that were effectively beyond the reach of credits cards so far, because the merchants would need to make a long-distance call for authentication. Now, authentication happens in seconds, with a brief connect that costs 40 paise.

Enterprises can use the Reliance fixed wireless terminal (FWT) device to connect their PBX networks and data applications for low-cost countrywide application deployment such as ATM connectivity, POS connectivity, headquarter-to-branch connectivity, CRM applications and travel reservations applications.

ICICI Bank already has a wireless ATM in Kochi and two in Mumbai using CDMA phones. One ICICI mobile ATM was recently deployed outside the Wankhede Stadium during the India-Australia one-day cricket match. Hindustan Lever is already doing a pilot with Reliance for its home delivery boys, who are carrying wireless POS terminals to swipe cards through. Some petrol pumps in the Mumbai-Pune Expressway and one inside the Dhirubhai Ambani Knowledge City in Navi Mumbai are also using wireless-linked POS terminals.

Reliance is using a mix of wireless for a rather extended last mile, and fiber at the back end. The fiber is supported by microwave in remote areas where fiber is not deployed—that’s almost 50 cities.

n ICICI has deployed mobile ATMs, and Reliance is into talks with HDFC, Bank of Punjab, SBI, Citibank and Venture Infotek for CDMA-based ATM and POS terminals c n ATMs can use a CDMA fixed wireless terminal at a third of the cost of a VSATs

Says Lalit Sawhney, VP of Reliance Infocomm’s enterprise business unit: "Our tie-up with banks will mean a surge in credit card use, and will allow banks to set up ATMs in places where lease lines are not available."

Shopkeepers currently process card payments by swiping them through POS terminals, which connect to a bank’s network access controller, usually through a regular (PSTN) dial-up phone line. The controller switches the transaction information to bank’s data center. The Reliance system will use its CDMA network to connect the POS location directly to the bank’s data center, skipping the PSTN connection and the network access controller. The merchant saves on long distance charges, and the authentication quicker than over dial-up.

Banks will also save on the cost of setting up network access controllers in different cities, and they can easily deploy online POS terminals nationwide, in the 1,100 cities covered by the Reliance CDMA network. Finally, banks can offer true mobility to merchants through applications for traveling salesmen, exhibition organizers, and broadcast fraud alerts, special scheme, etc, over SMS to merchants.

Kishore Oka is confident that soon most banks would come around to using CDMA-based ATMs. Sawhney says that it gives them tremendous cost savings, primarily because CDMA is far cheaper than the VSATs currently in use for ATMs. "Wireless will facilitate not only mobility, but also reach," he says. And CDMA-based ATMs do not require WPC/SACFA approvals or rooftop rights, unlike with VSATs.

No wonder, then, that SBI has launched a floating ATM on the Jankar boat that ferries passengers and vehicles between Kochi, in Kerala, and the Vypeen islands, linked by a Reliance FWT phone.

Paying Bills Online
There are other applications for FWT-based systems. Two that have already rolled out are online bill payment, and online lottery. So far, Reliance IndiaMobile phone bills can be paid online, using any Citibank-supported credit card. In the first ten days, nearly Rs 12 lakh was paid through a thousand online transactions. Punjab National Bank has already connected FWTs at small extension counters for online bill payments, and Reliance is trying this out with other banks.

The CDMA-based ATM and POS systems bypass the traditional links and switches, connecting the terminal directly to the bank’s data center

Sawhney says that data rides on multiple layers of security, and the CDMA interface scrambles voice and data, "making interception nearly impossible." There’s also secure socket layer (SSL) and 128-bit encryption of all data, including customer data like PIN and credit card numbers. A third level of security is the fact that IndiaMobile handsets are hard-wired to communicate only with the Reliance Application Platform, which is protected by firewalls and physical security at Reliance Infocomm data centers.

Betting on the Lottery
Reliance Infocomm is also selling wireless data connectivity to online lottery companies across the country.

Online lotteries have not taken off in India because they do not tap the masses. Reliance says its wireless data connectivity will let people in smaller towns access lottery schemes. Sawhney says that online lotteries can pull in a substantial chunk of the offline lottery business.

Reliance has also sold 2,000 FWTs to Dhoot Entertainment Network, which conducts the V-1 online lottery operations. Already three-quarters of Dhoot’s online lottery machines are connected through CDMA technology.

Linking the Enterprise
New products and services in the pipeline: VPNs, closed user groups, data connectivity and a "mobile office" service.

Rajiv Singh and Priya Mehra—members of Sawhney’s group—say that the team is working on other applications which will sit on the mobile intranet: mobile directory download, group/bulk SMS, office mail access, vehicle tracking systems, sales force automation, payment/business transaction applications. Some of these applications are already being tested in pilot projects in organizations like HLL. The corporate security aspect has been vetted by financial institutions like ICICI, HDFC, PNB and Citibank.

"We want to leverage different mobile apps to get a bigger share of the rising data ARPU pie" Kishore Oka, head-finance vertical, Reliance Infocomm "We have a three-pronged approach: target enterprises horizontally, focus on key vendors in the finance vertical, and roll out projects like auto-meter-reading for utilities" Lalit Sawhney, VP enterprise business unit, Reliance Infocomm

Large organizations like HLL, with large supply and distribution chains, so far connected their entire stockists and distributors over the Internet. However, the Reliance mobile intranet service "provides a cheaper and more convenient alternative, making the supply chain more efficient", Sawhney says.

Cheaper e-governance applications can also be developed. The Tamil Nadu government reportedly wants to connect "fair price shops" (ration shops). So does Gujarat: 10,000 such shops.

Is There Headroom?
If data usage really ramps up, and voice does too, what happens with network availability if the Reliance network saturates? Especially with POS, ATM and other critical applications?

Sawhney says that the network has the headroom for growth, and Reliance has the resources for expansion.

That is very likely, but quality of service will be critical in many of these applications. All it could take is some instances of an ATM or credit card machine not responding, for people to believe that CDMA-linked terminals aren’t as reliable as leased lines or VSATs.

But at the end of the day, the speed which this giant corporation can move at is always amazing. It can ramp up from zero to a million subscribers in a week. When faced with user and dealer backlash as happened with the Dhirubai Ambani Pioneer scheme, it can step on the brakes and turn on a dime. So even if the Indian telecom industry have taken eight years to figure out that there’s something called wireless data, if one company can really make it happen quickly, it’s probably Reliance.

So after all those SMS spoofs on marketing lines like "Kabhi mobile, kabhi computer", it’s Reliance that’s likely to have the last laugh.

With inputs from RAJNEESH DE in Mumbai

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