India mobile market expected to heat up further on new policy and licenses

This week Indian Department of Telecommunications (DoT) gave nod to current CDMA technology service providers to offer services in GSM technology as well after payment of license fee and by allotting additional bandwidth to these operators. This is under DoTs Unified Access Service Licences (UASL) policy against which many existing and new operators had applied for licenses and spectrum.

Biggest gainers so far is Reliance Communications who has nationwide CDMA service and limited GSM services in few circles. Tatas who are second largest CDMA operator plan to start GSM services if granted the required spectrum. GSM operators will be allowed to provide cellular services using CDMA technology although as of now no GSM players plan to offer CDMA services. The decision has left CDMA operators happy and GSM operators and Cellular Operators Association of India (Group respresenting the GSM players like Bharati Airtel and Vodafone) fuming.

Reliance Communications is the biggest gainer as it had applied for nationwide GSM license last year and have been in parallel gearing up its network to offer GSM services. They have within days of the ruling paid Rs16000 odd million (Rs1600 crores) fee required by the DoT after which it may be launching nationwide GSM services as early as 6-8 weeks. They will get 4MHz spectrum in each circle to offer GSM services.

Bharti AirTel is still waiting for additional spectrum for catering to its growing base of subscribers and to offer new generation services. DoT also raised the bar for GSM operator's eligibility for allotment of additional spectrum. They will need to have a larger subscriber base than what was mentioned earlier for additional spectrum allocation.

Bharti which has the largest cellular subscriber base in India's fast growing cellular market may start loosing out to Reliance Communications which is known for its aggressive marketing and pricing.

Mobile services are among the cheapest in India. While the prices remain low, both CDMA and GSM players have been adding millions of subscribers every month and with shortage of spectrum and crowded networks quality of service is a big challenge that the operators are facing.

- Neeraj