GSM Vendors Want A Piece Of Limited Mobility Pie

New Delhi: | Updated: Jan 29 2003, 05:30am hrs
Wireless in local loop (WLL), when implemented on a global system for mobile (GSM) communications standard, is essentially a low-end mobile segment with high usage volume potential, and should thus be addressed with a low cost solution. In the recent past, some of the GSM network and terminal equipment vendors have come up with a business proposition for the GSM-based cellular players to tackle the competition from WLL M in India. They say that since a lot of cellular operators already have their GSM-based networks in place, they can put in incremental expenditure and provide WLL M services based on GSM. But, to do the same these companies need to buy a basic service provider license. So, what we now have is a war of standards at the limited mobility level.

Industry experts say GSM is accepted as a matured open standard technology with the Global Mobile Suppliers Association (GSA) having around 669 vendors/operator members compared to around 110 members in the CDMA Developers Group (CDG). As a mature technology and open standard, GSM provides a cost-efficient solution required to provide profitable limited mobility WLL services., says Nokia Networks director strategy Sanjay Bhasin.

But CDMA-backers like Qualcomms director for technical marketing Rishi Dhingra point out, The International Telecom Union has endorsed CDMA as an open standard and around 110 companies with the likes of Lucent, Nortel Motorola, Samsung, LG are members of the CDG.

With around 460 GSM networks in the world across more than 165 countries, global roaming is much easier when you are on the GSM network, Nokias Mr Bhasin adds. But how much of that logic would an operator buy when one is talking about limited mobility

CDMA is a relatively new technology, admits Mr Dhingra. As for economies of scale, since there are 750 million GSM users in the world and 82 per cent of new subscribers worldwide are riding on GSM, operators on a GSM network get access to a much wider network, explains Mr Bhasin.

Talking about economies of scale, Mr Dhingra points out that CDMA has much higher levels of capacity, which makes it more appropriate for a service like WLL M as it is targeted aimed to be cheaper technology. To cater to a certain number of subscribers, CDMA requires a quarter of the cell sites that would be required for GSM, Mr Dhingra says. This implies lower capex and thus, lower opex, he adds.

Mr Bhasin argues that subscribers to GSM networks enjoy the widest choice of terminals, offering different styles, features and prices. At the lower end of the market, in particular, GSM handsets offer value due to the technologys economies of scale, he adds. He does have a point there as even though the latest private WLL M players have come up with relatively wide ranging handsets, the customer still doesnt get as wide ranging a choice as a GSM handset user.

Across the world, a CDMA-based user has to pick up a handset from the range provided by his mobile operator. The only exception being China, where China Unicom has recently started providing SIM-based phones for its CDMA-networks.

Potential subscribers will make their choice based not only on tariffs, but also the range of terminals and network services available. For example, service interoperability which allows WLL subscribers to exchange short text messages (SMS) and multimedia messages (MMS) with friends and families across national and global networks, is possible on a wider scale with GSM standards.

Mr Bhasin says that GSM is the natural technology for WLL, bringing a wide range of benefits both because of its competitive services and terminals and because it is relatively cost-effective to deploy and operate. But, the fact is all the current limited mobility operators operate on CDMA networks in India.

GSM provides the full range of features required to provide limited-mobility WLL services, says Mr Bhasin. Not only will the services interoperate with the extensive GSM mobile world, but a wide range of attractive, low-cost terminals will appeal to users and help to drive Indias own applications industry.

It needs to be mentioned that countries like the USA, China, Hong Kong, Singapore have both the network standards in their countries. Interoperability between these two networks, be it for voice or enhanced data services, will not be a problem, point out experts. Though, as of now, this definitely is an issue. CDMA will work in parts of Asia, US, etc, but not in European destinations. But again, why would this bother the limited mobility players, when they are not allowed to provide roaming services as per the regulation

Operators with existing GSM networks are best placed to benefit due to high degree of similarity between the mobile and WLL systems. In addition, as the major cost of connectivity lies in the handsets, the widest choice and lowest cost of terminals are the most compelling reasons to choose GSM evolution, argues Mr Bhasin.

According to an UK-based Ovum Research document, at an international level, in terms of providing services, both technologies are more or less at the same position. GSM/WCDMAs strength lies in the size of the subscriber base, standardisation and dominant position. But CDMA has been catching up and the CDMA market has been growing at an average growth rate of 56 per cent during the last three years compared to GSMs 45 per cent during the same time. However, GSMs market share in the global mobile market stands at 69 per cent compared to CDMAs 14 per cent.

Given the above costs and benefits of both the standards, it would be interesting to watch if the cellular operators who have GSM-based networks decide to provide WLL M services on the same networks.