A friend working - rather unhappily - with a telecom company made a number of interesting observations that set me wondering about the telecom industry in India. Before I discuss the industry, let me first list out the observations:
- CDMA is a better technology than GSM. All the talk about 3G being "the best" for mobile internet access is just a lot of hype. Connection speeds are anyday better on a CDMA network.
- Tata Docomo is in serious trouble. Having sunk about R28,000 Cr to build its own transmission infrastructrure (each tower costs Rs80L!) it is now witnessing a serious erosion of revenue streams. So much so that it has recently jumped into the GSM bandwagon to try and make some money. Docomo, meanwhile, is left wondering when - or if - it would be able to recoup its investments in the JV.
- MTS (another JV between Russia's Sistema and Shyam Telecom, India) is using the Tata network to offer high speed wireless internet connections.
It is actually his last point that grabbed my attention. I had purchased an MTS dongle a couple of months back. Manufactured by ZTE-China and branded "MBlaze", the choice was based on the assumption that a new company was less likely to have a congested network, and, hence, higher connection speeds. The salesman also made a strong case against the bigger companies by pointing out that even Vodafone used the MTS network for its data-packages. To drive home the point, he logged on to the Vodafone homepage and showed me the fine print. He was right.
Now my friend tells me that MTS itself is hanging on the Tata network! And like trapeze artists in a circus, the big players seemed to dangling on the smaller players, who in turn, are holding on for dear life to other big players.
When you dig a bit deeper it does make sense and many things fall in place - like pieces of a jigsaw puzzle.
The Mblaze USB-modems use the CDMA network, which is based on the 800MHz band. The GSM networks, on the other hand, uses the much higher 1800MHz band. Higher frequencies are a lot less efficient in covering distances and many more towers to cover a unit area, and hence, GSM networks are most effective for those living closer to the transmission towers.
Vodafone, Airtel and Idea have all banded together to share their GSM transmission towers while the CDMA players, Tata and Reliance are on their own. Since CDMA is indeed a better technology - especially for data transmission - the big-three are now trying to offer "Mobile Broadband USB Modems" by tieing up smaller players like MTS who have already obtained spectrum capacity from CDMA players like Tata-Docomo.
So, without owning a single tower, MTS is focusing all its efforts in a marketing blitz and making money on the side by leasing CDMA spectrum to the bigger GSM players. A perfect case of having somebody else's cake and eating it too! :)
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LINKS
Code Division Multiple Access (CDMA) Development Group - www.cdg.org
GSM World - www.gsmworld.com
Now my friend tells me that MTS itself is hanging on the Tata network! And like trapeze artists in a circus, the big players seemed to dangling on the smaller players, who in turn, are holding on for dear life to other big players.
When you dig a bit deeper it does make sense and many things fall in place - like pieces of a jigsaw puzzle.
The Mblaze USB-modems use the CDMA network, which is based on the 800MHz band. The GSM networks, on the other hand, uses the much higher 1800MHz band. Higher frequencies are a lot less efficient in covering distances and many more towers to cover a unit area, and hence, GSM networks are most effective for those living closer to the transmission towers.
Vodafone, Airtel and Idea have all banded together to share their GSM transmission towers while the CDMA players, Tata and Reliance are on their own. Since CDMA is indeed a better technology - especially for data transmission - the big-three are now trying to offer "Mobile Broadband USB Modems" by tieing up smaller players like MTS who have already obtained spectrum capacity from CDMA players like Tata-Docomo.
So, without owning a single tower, MTS is focusing all its efforts in a marketing blitz and making money on the side by leasing CDMA spectrum to the bigger GSM players. A perfect case of having somebody else's cake and eating it too! :)
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LINKS
Code Division Multiple Access (CDMA) Development Group - www.cdg.org
GSM World - www.gsmworld.com
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