Reliance to launch dual-mode phones to woo GSM customers

Reliance to launch dual-mode phones to woo GSM customers
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First Published: Tue, Jul 31 2007. 12 19 AM IST
Updated: Tue, Jul 31 2007. 12 19 AM IST
New Delhi: Reliance Communications Ltd, India’s second largest wireless telecom services firm, plans to introduce phones that run on both the GSM and CDMA (the platform it uses) networks in a bid to attract customers reluctant to get stuck with one standard.
Of the around 180 million mobile phone customers in India, operators using GSM or global system for mobile communications technology, account for about 135 million. The rate of growth of GSM subscribers is higher, too, with industry leader Bharti Airtel Ltd and Vodafone Essar Ltd adding about 3.5 million users a month compared with the two million new customers at Reliance and fellow CDMA user Tata Teleservices Ltd.
CDMA stands for code division multiple access, a US-developed technology.
According to a Reliance executive who didn’t want to be named because the phone firm is yet to make an official announcement, the Mumbai-based company is set to introduce a low-priced, dual-mode phone over the next few days.
“With this, someone who buys our phone is not tied to our network or that of the CDMA operators,” said the executive who declined to provide specific price details but hinted that the phone will be an entry-level model. Reliance had, in May, offered CDMA phones for as little as Rs777 and notched up sales of one million handsets in the first week alone.
“Dual-band is a very nascent market,” said Nishna Biyani, research associate with Mumbai broker Prabhudas Lilladher Pvt. Ltd. “Since the possibility of switchover (by the customer to a rival network) cannot be ruled out, the possibility of subsidizing the cost of the handset is limited.”
Analysts point out that if the company targets the entry-level market, it will be a challenge to bring the price of a non-subsidized GSM-CDMA phone below the Rs1,000-1,500 entry- level prices for GSM-only phones. Meanwhile, handset manufacturer Spice Mobile Pvt. Ltd, part of the B.K. Modi group, will also launch such dual-mode phones this week costing around Rs10,000 each.
H.S. Bhatia, head of LG Electronics’ GSM operations in India, says that while it is popular in markets such as China, certain issues, including the size of the phone, will influence consumers.
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First Published: Tue, Jul 31 2007. 12 19 AM IST