Qualcomm sees domestic manufacture boosting 3G

A mobile phone bundled with a connection for Rs. 1,500 or even Rs. 1,000 and a third generation (3G) phone capable of high bandwidth data connectivity for Rs. 5,000 are "definitely achievable" in the near future with Code Division Multiple Access (CDMA) technology.

The lowering of prices is made possible, says Qualcomm, a CDMA technology major that owns a plethora of patents, by the business model that it follows. It licenses a variety of handset manufacturers and encourages innovation in technology development by even students. This approach will help in rapid growth of CDMA in the 3G era, says Kanwalinder Singh, President, India and SAARC region, Qualcomm.

"It has gone to Rs.1,999 and it is not far away from Rs.1,500 at a wholesale level," Mr. Singh said in reply to a question on entry-level CDMA handsets bundled with connections.

It is erroneous to cast the mobile phone technology debate purely in terms of Global System for Mobile Communications (GSM) versus CDMA because there are migratory paths created by Qualcomm for GSM operators to move to 3G.

The focus now has to be, according to Mr. Singh, on early adoption of the recommendations issued by the Telecom Regulatory Authority of India (TRAI) on licensing of 3G operations, as this was critical to bridge the digital divide.

Broadband data communications made possible by 3G will enable new services in education, healthcare and agriculture development.

The potential for high volume data transmission has been exploited for telemedicine by countries such as Brazil, Australia and South Korea.

"We would like to see quick adoption of TRAI's recommendations on licence policy, clearing of spectrum and pricing mechanism for the industry to move forward. There is a lot of work to be done and devices to be produced," Mr. Singh said. Qualcomm will work closely with operators to ensure that its 3G technologies, EV-DO and WCDMA are available to rural communities. Both fixed wireless phones and mobile phones will play a part in expanding voice and data connectivity.

Claiming Qualcomm's business model of licensing handset and hardware manufacture to be superior to that of dominant GSM companies (which license third parties but also themselves compete in the manufacture of networks, chipsets and handsets), Mr. Singh cited the example of sub-50 dollar handsets. There are 10 suppliers in this category for CDMA with 22 models, compared to five suppliers for GSM with 17 models.

Qualcomm's licensing of Himachal Futuristic Communication Limited to make 3G handsets is expected to lead to lower prices.

Handset prices of Wideband CDMA (WCDMA), a technology that is expected to grow in the next three years, have been going down steadily.

Asked whether CDMA technologies could grow significantly when GSM has a market share of a reported 82 per cent worldwide, Mr. Singh said Qualcomm was the innovator in two variants of 3G, CDMA 2000 and WCDMA. "CDMA 2000 is already deployed by Tata, Reliance and BSNL. WCDMA is the migration path for the GSM players," he added.

As GSM players evolve to WCDMA and then grow, it is not unrealistic to expect that India will follow the global track of getting to about 60 per cent market share. Half of the subscriber base from GSM will go to CDMA. This is a very healthy ecosystem to be in.

The debate about the differences between GSM and CDMA and individual operators shifting to GSM is not important. The world is moving to one of these variants, says Qualcomm.