Moving the User Way

For India, the biggest telecom phenomenon of recent years wasn’t the

Internet–it was the cellular phone. And it is pretty evident from the ongoing

war between GSM operators and Reliance Infocomm. Reliance Infocomm has already

caused enough panic among beleaguered GSM operators by unveiling its limited

mobility services in 18 circles all across the country. Soon after, GSM

operators also joined hands to announce the tariff cuts that are eye-popping. It’s

a clear indication that the stage is set for the battle royale between GSM

operators on the one hand and Reliance on the other, both on technology and

pricing fronts. But at the end of the day it’s the user who will benefit no

matter what the operators have in store for them. Things are progressing the way

the user wants them to be.

The

customer in the cellular arena will get to choose from the best without having

to spend extra money. Tariff cuts are bound to continue, as the fight for

supremacy is here to stay. And, customers’ who know this are a happy lot. The

cellular service providers have announced a uniform mobile-to-mobile STD rate of

Rs 2.99 per minute. All STD mobile-to-mobile calls, irrespective of distance

(beyond 50 km) and time would be charged.Reliance has made its intentions clear–it

is going to take on the combined strength of cellcos on pricing after offering

the cheapest telecom services in the country. Although, India boasts of the

lowest cellular tariffs in the world, it is nowhere near what Reliance has

offered. The success of the ambitious giant Reliance very much lies in issues

like interconnectivity and spectrum allocation. GSM operators have already

closed their doors on the interconnect issue and the two government bodies MTNL

and VSNL have partially agreed to help on the interconnect issue. The spectrum

issue is still an area of concern for both GSM operators as well as for

Reliance.

GSM still has the 10 million-subscriber base in India whereas Reliance will

have to start from scratch and to make a dent in the cellular subscriber base

they have to work on a totally different strategy, one of which could be

offering value-added services. Though Reliance has announced that the

value-added services offered by them are incomparable, the question is how many

users really want this kind of value-added services like watching movies or

cricket matches. Skeptics agree that all the claims made by Reliance are mere

marketing gimmicks and the cost of running operations would not enable them to

bring down the prices to a great extent. The handset is another issue that can

put Reliance in quandary as it falls within a price range of Rs 3,000 to Rs

10,000. Though the company is providing handsets on subsidized rates, initially

an average user will dither on taking up their offer because of technology

issues. Another drawback the CDMA user will face is its limited mobility wherein

a user will be allowed to stick to a particular circle only and cannot avail of

roaming facilities. The only added advantage that Reliance actually has right

now is its pricing. In a cost- conscious consumer economy like India, this

certainly looks like a killer idea.

Price and technology will act as differentiators in the long run and yes it’s

obviously the range of services that is going to separate the boys from the men.

For the common man, technology doesn’t mean anything. Services do. On the

other hand, cellular operators are ready to offer limited mobility through their

existing GSM networks. They have options of either offering limited mobility on

the existing 900/1800 MHz spectrum or acquire a basic license and deploy

additional GSM network equipments to offer limited mobility on 800 MHz. Cellular

operators can also jump into limited mobility services if the verdict goes

against them.

Though Reliance seems to have won half the battle after its service offering,

global mobile telephony scenario should be more than encouraging for the GSM

operators. In terms of sheer numbers CDMA has less 90 million customers in total

worldwide. By contrast, GSM had reached 500 million people globally by early

2002. With all of these factors in mind, the wireless realm may soon have a new

reigning monarch.

Rahul Gupta



CNS