While CDMA phones have been there for some time in the country, it was only in 2002–03 that the market for these phones really hot up. This was largely because of the launch of CDMA-based limited mobility services by Reliance Infocomm and extension of the services by Tata Teleservices in Delhi, Gujarat, Tamil Nadu and Karnataka. India emerged as a priority area for not only leading CDMA phone vendors like Samsung and LG but also for Nokia that has traditionally been known for its GSM phones. Apart from volumes, the launch of services by these two operators also encouraged vendors to launch handsets with advanced features in India. Earlier, even though BSNL and MTNL and some other private operators had been offering CDMA services, the handsets offered were too basic in terms of features. On the other hand, with Tata Teleservices and Reliance Infocomm launching CDMA2000 1X-based limited mobility service in December 2002, Indian consumers got a chance to buy one of the world’s most advanced and feature-rich handsets. The handsets that CDMA vendors are offering in India are capable of providing users access to a variety of multimedia content, including news clips, sports highlights, movie previews, music videos, and personalized video messages. They come equipped with features like polyphonic sounds, 65,536-color TFT LCD screens, and digital cameras.

Costlier than GSM Phones
Unlike GSM phones, CDMA phones are usually sold through service providers who bundle them with connection. In other words, the cost of the handset is included in the cost of buying a CDMA connection. Even though service providers are offering a slew of schemes and claim to either subsidize handsets or offer it for free, the fact is that CDMA handset prices are on the higher side to begin with as compared to their entry-level GSM counterparts. Entry-level CDMA handsets being offered by vendors like LG or Samsung start at a price of Rs 6,000–6,500 unlike GSM phones which now cost as low as Rs 4,000. However, though not as affordable as the GSM phones at the entry level, CDMA phones come with many more functionalities and capabilities. These advanced features offset the high price of CDMA handsets to a large extent.

CDMA phones have historically been 30–40 percent costlier than their GSM counterparts, worldwide. This is largely because the number of CDMA2000 1X phones sold annually is much less than that of GSM phones. Both vendors and service providers argue that the price of CDMA handsets will come down once volumes grow in India.

Korean Vendors Rule
For the record, whatever market for CDMA handsets that was created in India in FY 2002–03 was the work of Korean players—LG and Samsung. While the GSM handset vendor Nokia (which commands around 44 percent of the global GSM market) also entered the market and made its presence felt, Motorola kept away from the market. Korean players gained an early-mover advantage by signing big deals with Reliance Infocomm and Tata Teleservices. Besides, they had much more to offer in terms of range of products and prices as compared to their GSM counterparts. Also, the Koreans appeared to be taking the Indian CDMA market much more seriously than others, and launched products with a lot of noise. LG is planning to spend $5 million on marketing in the next one year, while Samsung had a marketing budget of $2 million, which was supposed to be spent in the last quarter of 2002–03. Nokia made an entry in the Indian CDMA space, launching one of its CDMA handsets (Nokia 6385), and making its intentions amply clear that it too wanted a share in the emerging Indian CDMA pie.

Voice&Data estimates that CDMA operators would have bought around 10.44 lakh handsets in FY 2002–03. In value terms, the market size would be to the tune of Rs 522.52 crore.

Ravi Shekhar Pandey