GSM to boost Reliance Communication''s subscriber base

New Delhi: Reliance Communication is expanding into GSM services in a big way even as the global GSM service base is crossing the 2-billion mark. The launch of the GSM service is expected to give a big boost to the sagging subscriber growth under the Reliance brand.

The Anil Dhirubhai Ambani Group-controlled Reliance Communication has sought spectrum in 1800 Mhz band to start GSM services in the country.

Reliance, which claims to have a subscriber base of over 20 million, currently offers CDMA-based mobile services pan-India. However, CDMA players are hampered by royalty obligations towards the technology developer.

CDMA operators have to mandatorily give a royalty to US-based Qualcom to use its technology. This is an added cost to CDMA operators compared to GSMA operators who have no such obligations. Industry sources said this was also one reason for Reliance Communications' switch to GSM technology from CDMA.

Reliance's application for CDMA spectrum for the fifth carrier (1.25 Mhz) in both Delhi and Mumbai has been pending with the DoT since October 2005 though guidelines for allocation of spectrum for the fifth and sixth carriers were issued in March 2006.

Reliance has a unified access service licence (UASL) under which it can provide basic and mobile services using technology of its choice. It did not require permission to start GSM services, sources said. Reliance Telecom, a subsidiary of Reliance Communications, offers GSM services in the eastern and north-eastern states.

Under the existing GSM norms, Reliance's plan to launch GSM service will make it immediately eligible for 6 Mhz of spectrum each in Delhi and Mumbai, giving it ample time to go up to 15 Mhz by the time it clocks 21 lakh subscribers in each circle.

Reliance spokesmen, however, declined to comment on the application and whether the company planned to start GSM services in these two circles.

Analysts expect Reliance to make the most of the present spectrum allocation procedure and take the maximum advantage of both CDMA and GSM technologies.

Meanwhile, Communications minister Dayanidhi Maran, has welcomed Reliance Communication's plan to expand GSM services. The Cellular Operators Association of India (COAI) has also welcomed Reliance Communication's decision to start GSM services and has invited Reliance to participate in the ongoing GSM Associations' meeting in New Delhi.