Cdma-Based Will Systems Set To Storm Indian Market

Code division multiple access: New frontIer in wireless tech

Code division multiple access (CDMA)-based wireless in local loop (WiLL) systems are set to take the Indian basic telecom services market by storm. Five of the eight companies holding letters of intent to operate basic telecom services in 12 circles are in advanced stages of discussions with CDMA-based WiLL system manufacturers.

Leading the discussions is Bharti Telenet of Madhya Pradesh one of the companies which has signed the licence and interconnect agreements with the department of telecommunications (DoT) which has shortlisted Qualcomm and Motorola for supply of the WiLL and radio transmission part of the network.

 

Qualcomm is the pioneer in developing CDMA systems (used in satellite communications in the 1970s) for personal communication systems, while Motorola, like 23 other vendors, is a licensee for the technology.

The cost of the Bharti project in Madhya Pradesh is expected to be in the range of some $300 million (over Rs 1,080 crore). Bharti Telenet was the only company which participated in the third round of basic telecom bidding process last year.

Other companies like Essar Commvision (the LoI-holder in Punjab), Reliance Telecom (Gujarat), Tata Teleservices (Andhra Pradesh) and the RPG-led Basic Teleservices (Tamil Nadu) have decided to implement WiLL systems in their networks and are closely studying CDMA-based systems, sources told the Business Standard here yesterday.

Essar Commvision (project cost: $1 billion or Rs 3,600 crore) has been examining CDMA-based WiLL systems and vendors like Motorola are in active discussions, according to unconfirmed reports. Tata Teleservices (again project cost: $1 billion) has been holding talks with US companies like Lucent Technologies and Nortel for over six months now and is veering towards a CDMA system, sources said.

The RPG-NTT-Itochu consortium is also in the final stages of shortlisting vendors for its Tamil Nadu project (costing about $1.2 billion or Rs 4,320 crore). Fujitsu and Siemens have been reported to be in the running for the deal. Fujitsu has been working in tandem with Motorola for the CDMA-based WiLL part of the network. The $1.2 billion Reliance project has also been discussing with WiLL vendors, sources said.

Other LoI holders like Hughes-Ispat Communications, Himachal Futuristic Communications Ltd (HFCL) and the Usha group-led Techno Telecom are not part of the CDMA bandwagon.

Hughes Ispat, the Maharashtra and Karnataka LoI-holder, has finalised its network vendors for Maharashtra: Alcatel is to supply the switching systems, while Hughes Electronics will supply the WiLL solution, which is based on enhanced-time division multiple access (E-TDMA) technology.

Techno Telecom has just started evaluating proposals from vendors. HFCL has a case against DoT which attempted to encash the companys bank guarantees for the four basic telecom cirlces Delhi, Haryana, Uttar Pradesh (West) and Orissa. The company is expected to pick up at the most one of the circle licences if it wins the case, and is engaged in preliminary discussions with vendors.

Cost-effectiveness and short time of setting up networks are the two main factors driving basic telecom companies to choose CDMA-based WiLL networks. WiLL systems cost less when compared to the enormous costs like digging trenches and municipality fees involved in fixed-line networks. Also, wireless systems can be activated in a short (thereby promising quick revenues) while compared to fixed-line systems.