Betting on Data

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.

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

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.

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.

on the Reliance Menu







Multimedia Mobile service

on Demand
library of movies with multiple language subtitles

Landline phone, Centrex, E1 Trunk services, Calling Card, Universal
access number, Toll free number
point contact for customers through voice, fax, e-mail and postal
mail; Enquiry Handling; Provisioning/Connectivity; Billing and
collection; Sales support; Data services and tariff plans; Technical
Convenience Centers
sales an customer service points for Reliance Infocomm products and

Telecom–International wholesale network transport and
communications services
fiber network spanning four continents; Customer base of over
180 operators including top ten
international carriers; Global bandwidth,
IP, Internet, Ethernet and Co-location Services; Low latency global
MPLS based
IP network connecting world’s principal international Internet
Wireless Phone service

on Demand
wise music selection, Karaoke, Antakshari

Gigabit broadband, Video Conferencing
Office Processing
of Digital Products; Multicity video conferencing; Gaming Virtual
Office; Product Launches; Digital storage; Digital Movie
& NLD Services
Gateways in Mumbai, Delhi, Chennai, Kolkata and Ernakulam;
International Points of
Presence in Hong Kong, Los Angeles,
New York and London integrated
seamlessly with domestic gateways;
Data services on Reliance India
Mobile phones
TV with over 160 channels
Digital Subscriber Line (DSL), Local Multipoint Distribution
Services (LMDS), Leased Lines, Integrated Services Digital Network
(currently supports 10 languages); Business Process Management;
World-class technology and CRM deployment
a Gourmet Café

Range of food and beverage products
Card POS

Wireless Credit
Card Point of Sale
on Demand
and craft for children, Travel guides, Documentaries, Quizzes,
Health and fitness, e-mail, City guides, web chat, Web browsing
Security Solutions

Mobile Automatic Teller Machines
Data Centre Services

SAN, Hosting application, Database and system adminstration,
Monitoring and reporting, Mailing


Office Intranet on
Reliance IndiaMobile

Medical Diagnostics
Tracking System

Realtime vehicle tracking across India
High speed
mobile Internet connection
Video Recorder

Wireless broadband in campuses and public places like airports,
Home Controls

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

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.

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
n ATMs
can use a CDMA fixed wireless terminal at a third of the cost of a

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

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.

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

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

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.

want to leverage different mobile apps to get a bigger share of the
rising data ARPU pie”
Oka, head-finance vertical, Reliance Infocomm
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”
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

With inputs from RAJNEESH
in Mumbai

Connect on the Go

With R Connect, Reliance Infocomm now runs one of the largest ISPs in India.
It has logged in close to 300,000 subscribers. Though the four metros, along
with Bangalore and Hyderabad, account for the largest number of subscribers of R
Connect, surprisingly, it is subscribers in the cow-belt states of UP, Bihar, MP
and Orissa (who tradition-ally suffer due to poor infrastructure) who have
clocked the highest Internet airtime on R Connect. Subscribers in these four
states have logged upwards of 400 minutes of R Connect per month on an average,
far higher than that in the metros or mini-metros.

Reliance Infocomm offers three packages, gold and silver for Internet access
through its CDMA mobile service on
R Connect which, respectively, cost Rs 1,000 per month and Rs 500 per month for
unlimited access but with download limits of 250 MB and 100 MB, respectively,
and a standard package at a monthly rental of Rs 200 and Rs 0.40 per minute
airtime charge.

The Internet access service can work through any one of the following
devices: R Connect data cable, the fixed wireless phone/fixed wireless terminal
(FWP/FWT), the PDA phone and the GTRAN data card.

Why did the GSM world ignore data?

As demand for voice in India is still high, we have not seriously looked at
data apps till now. And even within data, we focused more on consumer and less
on enterprise. For one thing, till the unified license regime came, we or other
GSM players were not even authorized to develop fixed wireless terminals or
fixed wireless phones. Now, we are evaluating data seriously.

Vikram Mehmi, CEO, IDEA cellular

It is not true that [Airtel] does not focus on mobile data apps. It’s
always been a major focus for us. Data has brought in significant parts of our
revenue, and with the roll-out of Edge very shortly, we will see more enhanced
revenues. We have always been active on the GPRS front. Moreover, if you look
worldwide, in mature markets you see data revenue being driven by SMS–which
forms a major plank for our data strategy.

Atul Bindal, Group chief marketing officer and director, Bharti Televentures

What’s the competition doing about data?
We have all the enterprise apps: mobile ATMs, POS terminals, and are talking to
banks for deployment. We probably started even before Reliance, but while they
are making a big noise even before commercial deployment, we will publicize this
only once the apps are commercially rolled out.

Senior Tata Indicom official

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