CDG sees great opportunity for CDMA in India

Some time early this month, a very interesting development took place in Korea's telecom market. The CDMA Development Group (CDG) reported that LG Telecom's new CDMA2000 1x EV-DO Revision A (Rev. A) data service is flourishing in the Korean wireless services market, adding about 100,000 new data subscribers per month to its 3G data service, "OZ" ("Open Zone").

The OZ service has already resulted in a 14 percent increase in data average revenue per user (ARPU) from the previous quarter and a total of 287,000 OZ subscribers at the end of July.

Launched in April 2008, OZ gained market momentum by offering Korean consumers full-featured handsets with the compelling benefits of wireless broadband data services. The OZ service includes full browsing on the open Internet and unlimited fast data downloads, all at a flat-rate price. LG Telecom will expand its OZ service offering with 10 or more OZ-capable mobile handsets before the year end.

I caught up with Perry LaForge, executive director of the CDG, to find out a bit about the success of Rev A, and a little bit more about the global CDMA scenario, ARPUs, and his views on India, invariably!

Giving his overview of the global CDMA market, he said that globally, CDMA is growing rapidly and the ecosystem is strong. We're in the process of updating our numbers, but at the end of Q2 there were over 451 million CDMA subscribers worldwide, including 438 million CDMA2000 subscribers.

The EV-DO subscriber base grew from 65 million to 91 million over the past year, achieving a CAGR of 40 percent. Since the beginning of 2007, the number of commercial EV-DO Rev. A networks has also grown from three to 43, with another 35 being deployed.

CDMA continues to be the dominant technology in North America, while subscribership is growing fastest in Asian countries such as India and Indonesia. Additionally, the recently-restructured Chinese telecommunications sector has created a tremendous opportunity for CDMA with China Telecom.

Let's see what kind of services does Rev. A bring to Korea and globally. LaForge added: "LG Telecom launched its flat-rate "OZ" mobile broadband service, which is enabled by Rev. A and has been immensely popular, bringing in more than 100,000 subscribers per month since April 2008.

"The connectivity enabled by Rev. A is opening up a whole new level of wireless services to operators around the world, including user-generated content/social networking, broadcast TV/multicasting, mobile commerce, push-to-X, mobile advertising, mobile commerce, enterprise productivity applications and public safety initiatives."

So, how does the CDG foresee CDMA's growth in India?

Certainly, CDG sees an incredible opportunity for CDMA growth in India, especially when mobile broadband EV-DO services become widely available. Commenting on the new 3G spectrum policy, LaForge said it allows CDMA operators to gain access to 2x1.25MHz 3G spectrum in the 800MHz frequency band is a welcome first step towards that goal.

He added: "We welcome the DoT's announcement of the spectrum guidelines for 3G services and congratulate the DoT for opening up the IMT-2000 recognized bands of 450MHz and 1900MHz bands for 3G services, in addition to the 2100MHz band.

"Although no spectrum is currently available in the 450MHz and 1900MHz bands, we trust that they will soon be made available for bidding to maintain a level playing field with GSM operators.

"Just as the competitive forces of CDMA2000 1X stimulated the rapid growth of telephony penetration in India, we expect EV-DO will add the necessary impetus to take the growth of Internet penetration in the country to the next level.

"The CDG agrees with the recommended principles of using spectrum efficiently, ensuring technology and service neutrality, and establishing a level playing field through auctioning with a reserve price for allocation of 3G spectrum."

Part two follows in the next blog.

India announces 3G spectrum, MNP guidelines

Finally, the wait's over! The Indian government today announced the guidelines for 3G (third-generation mobile communications) spectrum as well as mobile number portability (MNP).

First, all players -- Indian and global -- have been invited to bid for 3G spectrum, making it a truly level-playing field. The condition for a foreign player or telecom operator is that it should have some experience in running 3G telecom services.

Those interested to know more about the guidelines for auction and allottment of spectrum for 3G telecom services, can download the documents from DoT's site.

Apparently, the 3G guidelines allow 10 players in the Indian 3G space, including both Indian and foreign players.

Spectrum in the 2.1GHz band would be available for the 3G telecom services through bidding/auction. Spectrum shall be auctioned in blocks of 2x5MHz in the 2.1GHz band. As per the DoT guidelines, the number of blocks to be auctioned may vary from five to 10, subject to the availability in different telecom service areas. Should there be non-availability, the number of blocks may be less than five in a telecom service area.

The MNP allows mobile phone users/subscribers to change their operators, while retaining their mobile phone numbers.

As per the DoT guidelines, a customer can approach a 'recipient operator' to port his or her number. The 'donor operator' cannot re-use that customer's ported number till such time the ported number is in use. The donor operator can only have the ported number once it has been surrendered by the ported customer.

Well, both of these announcements are going to add to India's brilliant telecom success story.

As for the foreign players coming into the country, quite a few are already present. It would be great to see the likes of NTT DoCoMo, SK Telecom, China Telecom, China Mobile, Telefonica, etc., enter the 3G space in India. As for 3G technology itself, TD-SCDMA, HSPA, etc., should be considered as well.

Oh yes, there's some good news for those itching to use the Apple iPhone 3G. Once, the 3G networks are in place, there's nothing that can stop this from happening.

On the MNP front, a good majority of Indian subscribers are on prepaid. So, there may be quite a few changeovers happening! It could well prove to be a nightmare for the operators, but then, that's the fun of having a level-playing field and the challenge of playing in the booming Indian telecom market.

Postscrpt: A reader, Abhshek, left a very interesting and relevant comment regarding 3G services that users could be charged heftily. I quite agree with him! The 3G operators would need to price their services right. It should be win-win for both operators and users.

To start off, service charges could possibly be on the higher side, as the 3G licenses won't come cheap, and operators would also look at the revenue angle. However, over time, service charges are quite likely to come down, if the pattern of the Indian telecom history is repeated. Many thanks for your comment, Abhishek.