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Home > Business > Business Headline > Report

Videocon picks CDMA for telecom rollout

October 09, 2007 01:23 IST

The Reliance [Get Quote] Anil Dhirubhai Ambani Group and the Tatas have competition on hand. Consumer electronics to power giant Videocon [Get Quote], which has applied for a unified access service licence, will be using the code division multiple access and not the global system for mobile technology to roll out its mobile services.

Confirming the development, Chairman Venugopal Dhoot said, "We will use the CDMA technology for mobile services in the country."

Videocon has also said that it was in talks with a US telecom major to partner for the services. However, it declined to comment on the possible talks with US telecom major Verizon as a partner.

Dhoot said, "We cannot divulge the name of the partner."

The move by Videocon might be a strategic one as most of the 300 other applicants have shown interest in running the GSM service. As a result, the shortage for spectrum will be restricted to GSM and not among CDMA players.

At the moment, there are only two players in the CDMA space, with Bharat Sanchar Nigam Limited having only limited operations in some circles. The government has around 20 MHz of spectrum, which it hopes to vacate from the defence services.

However, experts in the business say that the key reason for most companies opting for GSM is better valuation.

Industry experts say globally the move is shifting towards GSM rather than for the proprietary technology from Qualcomm in the CDMA space.

In India, even CDMA players, such as Reliance, have publicly made their choice for GSM and applied for pan-India licence.

According to a telecom analyst, "Most investors are ready to pay a premium for GSM companies and of course there are more telecom players in the GSM space."

Dhoot of course faces competition from over 20-30 big to small companies, which have put in applications for a pan-India UAS licence. These include realty developers such as Unitech, DLF, Parasvnath, and Omaxe among others; companies ranging from steel majors such as Ispat group, telecom firm such as HFCL.

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