Why CDMA phones aren't dominating in India?

Last week we jotted down 5 best CDMA handsets, which wasn’t easy, owing to the dearth of CDMA phones in India. Now, we don’t mean there are just a handful of phones, but definitely one can’t find an array of devices to choose from, while looking for a smartphone. There are umpteen choices in the low end, entry level devices, but try moving up the tech ladder for a higher-end device and that’s where you will suddenly hit a roadblock. An overview of the mobile market, and seemingly, GSM, has a much larger share of the pie compared to CDMA in India. As of October 2011, India had a subscriber base of over 851 million subscribers. GSM enjoys a larger share of the market in India of about 80 percent, while CDMA is still lagging at about 20 percent. In fact, globally too, GSM is believed to be dominant across the world, except for America and a few other markets where CDMA is favored or enforced.
 
It eventually raises a question whether we have lesser users opting for CDMA devices or is the constraint of CDMA network operators and better handsets obstructing the growth of this standard? Well, the answer is both as these aspects are interlinked and it’s eventually a vicious circle. CDMA phones are believed to be focused on rural regions, where the purchasing power and users demands aren’t high, but the price point definitely matters.

Rahul Malhotra, Regional Head - Product Marketing, Mobile Devices, Motorola Mobility, states, “At the moment the CDMA device market in India is largely driven by entry level devices. Demand for handsets is often based on the services carriers are deploying and how they are marketing handset categories. Globally Motorola makes devices for all major network technologies, and in any given marker we offer handsets based upon customer needs and the requirements of our carrier partners.”

More from News & Analysis

What is the US HIRE Bill and why is India’s $250-billion IT sector worried? Is the internet dead? What's this theory that OpenAI's Sam Altman says might be true?

Advait Vaidya, Product Manager, Research In Motion believes that the CDMA market is here to stay. He says, “T_he CDMA market in India is small but from a capability point of view has the most unadvertised/unrealized potential today. Tomorrow is about data & availability & the CDMA operators in India are very well positioned to cater to these requirements.  CDMA in India is here to stay and CDMA networks will keep drawing customers to its folds with remarkable ease & regularity_.”

Here are a few pointers that have obstructed the growth of the CDMA market in India:

Flexibility
Flexibility is one of the main factors that has been affecting CDMA usability in India. When CDMA was introduced in India, it was mostly a single operator phone. For instance, Reliance had its small army of phones then. No one wants to get tied down to an operator, despite the fact that CDMA arguably offers faster speed than GSM. The standard was introduced in India in a very tied-up fashion, without too many operators who would make switching between carriers easier. This formed a very constrained image of the CDMA standard. Although newer methods and features have been introduced to change this notion, we don’t see it showing any change in the number of CDMA users.

Feels locked up

More Prepaid users
We are an emerging nation and mobile phone usage figures have rapidly increased in the last few years, reaching to more youth and penetrating into the rural and remote areas. India has a larger prepaid market compared to postpaid. According to the Nielsen survey last year, about 97 percent youth use prepaid schemes. Here, users look around for profitable tariff charges and lucrative plans. With GSM, it is easier to go network hopping, since that simply requires one to change the SIM, thereby avoiding the tedious CDMA procedure. Moving to a new carrier network and accessing the benefits of the tariff plans is quicker and people get the choice to change the network according to schemes available.

Network Operators
The number of CDMA operators is limited. The allocated spectrum and operators here show that for every circle the number of GSM operators is more than three times the number of CDMA network providers. So, lesser choices may result in the number of users opting for GSM to be much higher compared to those who opt for CDMA , which in turn compels network providers to concentrate on GSM devices. We have phones with both GSM and CDMA abilities, which has upped the number of CDMA phones, like the Motorola XT 800 and Samsung Duos, among others. Here again, it is opening doors for the GSM network, which is already more popular. Taking into account CDMA:GSM provider ratio,there are lesser number of CDMA operators, therefore making their choice sparse compared to GSM. Reliance and Tata Teleservices are the key players, alongside some others, such as BSNL.

Low-end handsets
CDMA is usually linked to new, entry level phones. Entering the smartphone era, wherein people are looking for advanced technologies, very few such options available have further crippled the CDMA market, in terms of newer and smarter phones. However, there has been a change, since the Open Market Handset (OMH) was initiated to enhance the CDMA ecosystem. Its only then that we saw better phones and the dual GSM+CDMA segment spruced up. There were a few higher end models introduced, which again were limited. The most recent and over-hyped Apple 4S also had both GSM and CDMA slots. The range of higher-end CDMA phones is limited to iPhone 4S (Airtel and Aircel) and a slew of BlackBerry handsets (Reliance and Tata Indicom). Also, if you see closely, Reliance had targeted the rural circles, with BSNL and Reliance catering to rural areas where consumers aren’t exactly looking out for smartphones, but affordable schemes and low priced phones. To sell more in regions with purchasing power, it will need exclusitivity of devices with a competitive price tag.

Entry level..not smart enough

“RIM offers the best in class smartphones that work on GSM & CDMA networks. Additionally, we also offer world phones that work on CDMA as well as GSM networks which allow users to have flexibility of using the same phone when they are roaming on international networks,” said Advait Vaidya.

Efforts to make enhance the CDMA ecosystem
 
Open Market Handset (OMH)
Open Market Handset (OMH) focused at providing better flexibility in the CDMA ecosystem. OMH, led by CDMA development group (CDG), aimed at enhancing the handset and operator convenience for the CDMA base to use voice and data services. Companies adhering to the OMH standards are Reliance Communications, Sismeta Shyam (MTS), Tata Teleservices and Virgin Mobile India. There are OMH based handsets already available in the market. For instance, the Samsung Galaxy Pop claims to simply need an OMH SIM card from any operator to use the phone, while MNP can further help retain the same number.

It’s only after the Open Market handset came into that picture that higher end CDMA phones entered the market and gave flexibility to the customers. However, we have to understand, till the measures were implemented top CDMA players like Reliance and Tata Teleservices had begun their GSM service along with CDMA, slimming the number of CDMA users again.

With 4G and LTE standards being accepted in developed nations, it shouldn’t be too long before 4G services catch pace in India. Yes, we know that 3G penetration would take some more time and 4G seems far fetched at the moment, but, looking at the rapid growth in the way we access digital data and the popularity of mobile world, one shouldn’t be surprised to see some price drops, wider acceptance of 3G and entrance of 4G services.

Image Credit: Getty Images