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Globally, majority of the CDMA players have started investing heavily in GSM platforms to run their cellular networks. The CDMA Development Group's (CDG) claim on mobile phone prices dipping following the launch of global CDMA Open Market Handsets (OMH) initiative raise eyebrows since two major CDMA operators in India –- Reliance Communications and Tata Teleservices are also looking at GSM as its future.

If there is no significant increase in demand for CDMA handsets, chances for decline in prices are minimum. CDG feels OMH initiatives are expected to assist in adding 100 mn CDMA subscribers in the next two years.

Availability of handsets has been a barrier for CDMA players. CDMA handsets have traditionally not been available over-the-counter but come bundled with the service. The CDG is expecting to change this scenario through the OMH launch. It is expected that this move of CDG will boost the Indian CDMA market and will create a new excitement and hope among the CDMA operators.

Though the CDMA players are very excited with this initiative of CDG, the biggest questions here is: Is this the right time and decision of CDG to launch this initiative in the Indian market, where on one side GSM is a clear leader and on the other side, two major CDMA players have now started the GSM service and they are now encouraging customers migration to their new GSM network.

Both CDG and CDMA players like Sistema Shyam and Reliance Communications are very positive about the OMH initiative. Speaking about this, Perry LaForge, executive director, CDG said, “Reliance and Tata continued to be extremely supportive of CDMA. Both the companies have clearly stated in May that they are only offering GSM because they don't have access to additional spectrum.”

Manoj Kohli, CEO and Jt. MD, Bharti Airtel said, “CDMA is losing their ground in the Indian telecom space because most of the CDMA players are now moving towards GSM. CDMA as a technology is not sustainable.”

In May 2009 India crossed the 100 mn CDMA subscribers mark making it second largest market globally after the US. According to CDG, this is a landmark for the CDMA industry and also reiterates the huge potential for CDMA to grow in India. But this is also a fact that GSM is already dominating the Indian telecom market with over 315 mn subscribers base and close to 75% market share and handsets prices are already very low in the Indian market.

"Reliance has always supported wider availability of CDMA handsets in Indian market both through its own proprietary development as well as the open market channels. We welcome this initiative of CDG which will ensure that a broader choice of mid and high-end handsets will become available to CDMA customers both for upgrade as well as new connections. Timing is also right as CDMA subscriber base has crossed 100 mn in India which is 2nd highest in the world. This ensures that viability of any open market handset operation is in place for all participants,” said SP Shukla, President (Personal Business), Reliance Communications.

The OMH initiative is a global effort being led by the CDG to enable full-featured CDMA devices that can be used in any OMH complaint operator network. This is accomplished by moving all network and subscription provisioning from the device to the Removable User Identity Module and ensuring consistent behavior between OMH compliant devices and networks. The result is an open market that creates wider variety of CDMA devices for consumers, greater economies of scale for manufacturers and more flexibility for CDMA operators to expand their voice and data services. Comparing the CDMA and GSM technology, Vsevolod Rozanov, President and CEO, Sistema Shyam Teleservices says, “Now that GSM and CDMA have leveled up on the open handsets parameters, the consumer driven market will shift its focus on comparing its service quality and other features. CDMA is a far superior and faster technology as compared to GSM, which consumers have already started experiencing”.

According to Perry LaForge of CDG, “The CDMA opportunity in India looks even more promising with the entry of new brands, expansion of existing players and addition of new operators like Sistema Shyam Teleservices, Virgin Mobile and BSNL.”

He added further, “India is an ideal market both for upgrades for the existing CDMA subscribers base as well as for new subscribers acquisition. The CDMA-OMH will give consumers both choice and flexibility.”

One of the major reason for GSM dominating the India market has been that so far, on CDMA, every time the subscribers wanted to change or upgrade their handset, they had to change their number. And in the Indian market, where mobile number has almost become second identity, there was a lot of resistance to this.

Commenting on this move of CDG, SC Khanna, Secretary General, Auspi, says, “The OMH initiative is a welcome move. Since Indian CDMA market is one the biggest market in the world, this initiative will move faster and also increase the competition in CDMA handsets market.”

According to Rozanov of Sistema Shyam Teleservices, “We are confident that CDG's move to launch its open market handsets initiative will receive a very positive response from the consumers. The timing has been perfect as the number of subscribers are growing on a daily basis.”

Although the market today is dominated by GSM, the tele-density in the country still remains at just 33%. Two-third of the market still remains untapped. So, there is lot of opportunity still existing for the CDMA operators to grab these untapped area and strengthen its footprint. But GSM players are enjoying market share and more aggressive in India.