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