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BSNL plans to spend Rs400 crore on CDMA expansion

BSNL plans to spend Rs400 crore on CDMA expansion

India’s biggest phone firm by revenues, Bharat Sanchar Nigam Ltd (BSNL), plans to procure additional telecom equipment worth around Rs400 crore to expand CDMA (short for code division multiple access, a wireless technology platform) networks across 500 towns in India.

“We would like to procure more CDMA equipment from ZTE (Corp.), as it is an existing vendor, and it would help us procure fast," said Kuldeep Goyal, chairman and managing director of BSNL. “We are looking to have another 7,000 base transceiver stations for the CDMA business."

In October 2005, BSNL had placed an order for more than two?million CDMA?fixed-phone lines with China’s ZTE Corp. Last year, India’s department of telecommunications (DoT) accepted the nation’s telecom regulator’s recommendation of allowing a single operator to offer phone services through both CDMA and GSM (short for global system of mobile communication) technologies paving the way for BSNL’s expansion in CDMA-based networks. Until now, BSNL was offering just what is called fixed wireless CDMA-based phone services not mobile.

Initially, BSNL will not be looking at building a huge capacity for CDMA mobile services, “but instead only focus on providing roaming facility in around 500 towns through its CDMA network," added Goyal.

The state-run firm wants to compete with private sector rivals such as Reliance Communications Ltd (RCom), which serves around 38 million customers through CDMA. “We want to leverage CDMA primarily for providing high-speed data access to our subscribers," said Goyal. He says, BSNL users could access data and browse the Internet at speed up to 2MB per second through the technology.

At a time when CDMA firms such as Tata Teleservices Ltd and RCom are planning to roll out their GSM networks, “it does not make too much of business sense for BSNL to look at a full-play CDMA mobile service," said Romal Shetty, head of the telecom practice at consultancy firm KPMG International. “However, if BSNL has plans to make bucks on data services, then it may be worth it."

BSNL also hopes to use the new CDMA network in areas where it has no GSM coverage. “It becomes a kind of fall-back strategy for us," said Goyal.

The Indian market for wireless telecom equipment, including switches and networking gears, could almost double to Rs32,000 crore, says researcher IDC India, as the new entrants apart from firms such as BSNL establish new networks and compete with each other for a share of what is projected to be 500 million mobile customers by 2010.

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