Reliance Mobile GSM CDMAReliance Communications has become the first telecom company to get approval to offer GSM and CDMA mobile-phone services nationwide. Currently R-Com is the No.2 mobile services firm in India, providing CDMA services in 21 circles and GSM services in 8 circles.
The licence has been awarded in accordance with the Unified Access Service Licences and the approval is for providing GSM services in their respective circles. Other two companies to get approval are HFCL (Punjab) and Shyam Telecom (Rajasthan).
And within hours of receiving the approval, the Reliance also paid Rs.1651 crore to DoT as spectrum fee and prepare the network in 4-6 weeks. However, spectrum is likely to be allocated by March 2008 and Reliance may launch its services only in financial year 2008-2009.
However, the new move is being opposed by other GSM players as the Universal Service licence warrants use of either GSM or CDMA to get spectrum. Another issue that may arise is that the additional 4.4 Mhz spectrum which Reliance hopes to get would only be possible if the Defence ministry releases the spectrum.
Another conflicting issue can be the fact that PSU players, BSNL and MTNL could also offer both GSM and CDMA services without paying any extra licence fees. Although DoT has permitted to use both technologies inorder to expand network in rural areas.
But with entry of Reliance Communication into GSM, its CDMA vendor, Qualcomm would suffer loss of revenue on account of royalty on CDMA handsets.
But the going would also not be easy for Reliance as it would be either eighth or ninth GSM player in the new circles and by the time it launches its services, majority of potential customers would have signed with a different GSM service provider. This would make gaining market share a tough challenge for Reliance.