Qualcomm Inc (QCOM)

[khemara_qc]

GSM slump will boost CDMA : Qualcomm

Sanjiv Shankaran / Chennai September 07, 2005

http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu1&leftindx=1&am....

The fall in revenue from Global System for Mobile Communication (GSM) users will soon push the entire mobile phone market towards Code Division Multiple Access (CDMA) technology, said Kanwalinder Singh, president, Qualcomm, India and Saarc. Qualcomm is a pioneer in CDMA technology.

Singh said GSM companies in India would mimic those in Europe and evolve towards WCDMA (wide-band CDMA), at a workshop in Chennai. In a year or so, the debate about the respective merits of CDMA and GSM will become irrelevant, he forecast.

The trigger in India will be the falling trend in average revenue per user (ARPU), he said. The telecom industry’s ARPU in March 2005 was Rs 407, as compared to an ARPU of Rs 634 two years ago.

The only way to reverse the trend is to provide more value added services, which would mean a shift to CDMA technology because it offers both data and voice services on the same spectrum.

Singh said that in Europe, a big GSM market like India, companies such as Vodafone and France Telecom had already begun to make the transition to WCDMA.

WDCMA equipment is placed on top of GSM to make the transition.

Singh said the GSM companies’ cost of making the transition was not trivial, but remained manageable.

Though European telecom companies are evolving towards WCDMA, a similar evolution in India depends on the government’s decisions on spectrum policy. “Without spectrum decision nobody is going anywhere,” said Singh.

Qualcomm is in talks with the government on the issue and pushing for a quick decision, he added. The problem is that in metros some GSM service providers have 10 Mhz of spectrum as against about 5 Mhz of spectrum that CDMA players have.

Singh said Qualcomm was pushing for equal spectrum allocation among different technologies. If that were to happen quickly, it would catalyse the next phase of growth in mobile telecommunications, he added.