Reliance Data-comm

Posted on | April 22, 2006 |

Reliance Infocomm has always touted its CDMA network’s data advantage over GSM operator’s GPRS offering. There is no doubt that Reliance’s CDMA2000 1x network is better suited for carrying data traffic than most GPRS capable networks of GSM operators in India.

But here is the irony - Reliance has the right data technology but wrong customer base. It entered the market late as an operator and by then the cream of users was already taken by the likes of Hutch and Airtel. With lack of international roaming on CDMA networks and absence of number portability, there is very little reason for the top end users to move to Reliance. On the other hand, GSM operators have the customer base capable of using and paying for better data offerings but their GPRS networks are too slow. And they are too busy acquiring new customers to waste time in upgrading their existing networks to EDGE. Besides there is a dearth of necessary spectrum also.

This is validated by COAI secretary general TV Ramachandran’s statement in this Business Standard article on Reliance’s data (mobile and broadband) plans.

Sure Reliance’s main thrust has been on data, but their revenue from non-voice services as a part of their total revenue is half of that of the leading GSM players.

Non-voice (VAS) revenues of GSM operators is believed to be around 10% and a large part of that is P2P SMS (7% approx.) alone. According to TVR’s statement, Reliance’s VAS revenues comes to 5% of total and P2P SMS should be taking lion’s share of that 5%. So what does it leave for non-P2P SMS VAS revenues - R World video clips et al - which Reliance claims high usage of.

Reliance’s advantage is its ubiquitous data network and pervasive availability of R World. I would recommend a Reliance data card for your laptop because of its nationwide data network, sensibly priced data plans and workable speed of connection.

It currently has its network available in over 2.4 lakh towns and villages across the country constituting for 42 per cent of the rural population. But by the end of the year, it wants to nearly double the rural coverage to four lakh villages - about 50 per cent of the rural population.

That is far more ambitious that the best GSM player in the marketplace. For instance, according to Cellular Operators Association of India(COAI), coverage of the most aggressive GSM player in villages is around 1-1.5 lakh (much lower than Reliance) and is expected to hit about three lakh by the end of this year. However, if Bharti figures are anything to go by, till December last year it had reached over 58000 villages and non-census towns around the country.

But to cater to the rural market would need specialised content apart from the popularity of entertainment (movie clips, song downloads, etc). The company has already worked out a bevy of such services - like online price of cops in mandis, weather report at local levels and of course introduction of virtually all the regional languages to surf information.

• Customer base: 18 million
• Number of data enabled phones: 10 million
• Wireless traffic per day: 320 million minutes
• Wireless multimedia users 5.3 million
• Coverage: 3700 census towns and 240000 non-census towns and villages
• Rural population covered: 42%
• Urban population covered: 97%

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