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CDMA Vs GSM - What's in it for you?

Thomas K Thomas | March 11, 2003

When Reliance India Mobile released its first ads, the deal looked like a steal. STD at 40 paise a minute, free handset, just Rs 500 a month, et al. Now that other mobile services companies are into price-cutting themselves, it's time for a rethink.

If you are among those who still cannot decide whether to go in for Reliance's Code Division Multiple Access (CDMA)-based 'limited mobility' phones or the 'full-fledged' cellular phone services provided by GSM (Global System for Mobile) operators, welcome to the club.

Which one is cheaper, which one better? While a number of issues still need clarity from the regulatory angle, let us take a close look at what Reliance is offering compared to a GSM phone.

First, the service: one of the limitations of a WLL (limited mobility) phone is that the user cannot go beyond a short distance charging area (SDCA) - which is roughly a radius of 25 km.

While Reliance has attempted to overcome the problem by offering multiple registrations, this still is not the equivalent of the roaming services offered by cellular operators.

For instance, if a subscriber in Delhi travels frequently to Mumbai, Reliance will register the subscriber in both the cities at an additional cost of Rs 20 to Rs 30.

So when the subscriber is in Mumbai, all calls landing on the user's Delhi phone number will be forwarded to a pre-allocated number in Mumbai. The user does not have to change the handset or put in a new SIM card for availing this facility.

However, when the user is in transit between the two cities, the phone does not work, unlike a GSM phone which offers roaming anywhere in the world.

Reliance is also offering text messaging services to cash in on the popularity of SMS. However, for the moment, any text message sent by a Reliance phone user can only be received by another Reliance user as GSM operators do not recognise this as a legal service. Even Tata Teleservices, another WLL operator, is awaiting clarity on this issue.

When it comes to data services, there is not much difference between GSM cellular operators and Reliance in terms of offerings.

Subscribers on either network will be able to send and receive e-mail, surf the Net, watch video clippings, send multimedia messages, and download games and ringtones.

The difference here is that while Reliance offers these services to all its subscribers, cellular operators offer such services only to those subscribers who have taken a General Packet Radio System (GPRS) connection - which requires a GPRS-enabled handset. The difference is also in the way the services are priced.

While Reliance is charging a regular talk-time rate of 40 paise a minute and a monthly fee of Rs 100 (under the club membership head), cellular subscribers have to pay a monthly fee ranging from Rs 250 to Rs 600, depending on the offerings, in addition to specified tariffs for each service.

For sending a multimedia message (MMS), cell users pay Rs 3 per MMS. For making voice calls, Reliance is charging 40 paise a minute. The finer print here is that this tariff is applicable only for calls made to another Reliance WLL subscriber.

Reliance is also offering STD calls at 40 paise a minute, but this too applies only to Reliance-to-Reliance calls.

If, for instance, you wish to call up a BSNL subscriber, you pay the standard Rs 4.80 per minute. The proposition looks strong only when you consider that Reliance is hoping to get one crore subscribers. But that may be some time away.

Initially at least, the WLL subscribers will end up making most of their calls outside the Reliance network and for this the user will have to pay an additional access charge, which ranges from 30 paise to 50 paise a minute, as specified by the Trai.

For instance, if a Reliance user calls a cell subscriber, the tariff applicable will be a maximum of 70 paise a minute.

In comparison, a cellular subscriber pays just 10 paise more at 50 paise a minute when calling any of the 11.5 million cell users and 80 paise a minute when calling a WLL subscriber.

While WLL operators can claim the advantage of offering free incoming calls, come April 1 cellular subscribers will also get free incoming calls - thanks to Trai's recent tariff order. Some of the cellular operators have in fact already implemented a free incoming call regime.

However, Reliance is offering a 15-second pulse rate as compared to the 60-second pulse being offered by cellular operators. This means that if you make a 15 second call on a Reliance phone, you pay only 10 paise while on a cellular phone you pay the entire 50 paise.

On the other hand, the acquisition cost of a Reliance phone is on the higher side with subscribers having to pledge the billing money three years in advance in the form of post-dated cheques.

The billing includes Rs 400 as monthly rentals, Rs 100 as club membership fee and Rs 100 as finance cost for the handset.

Subscribers also pay a hefty Rs 3,000 as club entry fee for availing themselves of value-added data services, though in reality this money is being charged for the handset, which, by the way, is not free with the connection.

That makes a total of Rs 24,600 for three years. In return, you get 400 minutes of talk-time free each month - that is 14,400 minutes for three years.

There is a three-month trial period when you can exit. If the subscriber wants to quit after the three-month period, he or she stands to lose Rs 40 from each of the post-dated cheques.


Regular cellular subscriptions are slightly more expensive than WLL phones. Apart from monthly rentals or fixed tariff plans that range from Rs 400 to Rs 1,500, cell users also pay additional charges for caller line identification, security deposits and activation fees. But overall, there is not much of a difference at the moment between Reliance's WLL phones and GSM phones in terms of tariffs and services.

If you are someone who doesn't travel much, are not SMS crazy, do not want to be disturbed in transit while travelling, and are looking for an alternative to fixed-line phones, and do not mind getting locked to an operator for three years, the Reliance WLL phone is not a bad choice.

Otherwise, you get a wider choice among GSM players.

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