Reliance Communications (RCOM) has no intent to hive off or sell its CDMA business, the company CEO (Consumer Business) Gurdeep Singh disclosed during its earnings conference call for the quarter ended March 31, 2014 (Q4-FY14). This was in response to an analyst question on media reports of the telco looking to sell off its CDMA business to reduce debt.
Elaborating on this, Singh mentioned that they had chalked out a strategy to dominate data in their dual technology markets about 14 months ago. They currently have a fair share in the markets where it has rolled out CDMA as a data technology. He also pointed out that the emergence of universal chipsets and universal devices which support both CDMA and GSM, is helping them grow the availability and bring those devices to consumers.
Singh added that the CDMA data part of the business has always been growing and will continue to grow with more Rev B oriented devices come in. Their biggest worry in the past was the decline in the CDMA voice revenues, which they were able to hold it in the month of March and they are optimistic of it contributing to the telco’s revenue growth in the future.
He also pointed out that RCOM is currently the only pan-India CDMA operator. Remember that Tata Teleservices had surrendered 20MHz CDMA spectrum in December 2013 while Sistema which operates its telecom services in India as MTS India has CDMA spectrum only in eight circles right now.
“We have 26 CDMA phones today which are the same products as its GSM variants, which are being marketed in all our markets and we are beginning to see traction against those. We believe this is the right time when the whole market is moving towards multi-mode multi-band chipsets and universal devices. This is the time for us to really use the power of dual technology. We are strongly focused and will stay invested in the business.” Singh added.
8% of RCOM’s consumers are on multi-mode devices
Responding to a follow-up question on the penetration of multi-mode devices, Singh mentioned that 8% of their consumers are currently on multi-mode multi-band devices since such devices just started coming in to the Indian market six months ago. They are currently available in the price range of $260 – $270 but he believes they will be able to get the prices down to $100- $120 by the second half of this year, based on all their “discussions and the preparation of device roadmap of our own proprietary and open market handset ecosystem”. From early next year, all devices right from $70 – $80 price point and above will apparently be multi-mode and multi-band devices.
Besides this, RCOM has identified premium markets where the company is upgrading its network to Rev B which gives over 14.7 Mbps on 800 MHz spectrum, which is kind of equal to or better than a normal 3G experience on 2100 MHz.
In the previous quarter, Singh had mentioned that the company is renewing focus on its CDMA business since its CDMA voice revenues is almost stabilizing and the CDMA handset ecosystem is improving in the country. He had also mentioned that they had taken several CDMA oriented initiatives recently like launching GSM+CDMA smartphones, introducing a dedicated CDMA team within its mobility business and upgrading its EVDO network to Rev B in non-3G circles.
He had also pointed that they see an opportunity to offer high speed data services through its 800MHz network currently deployed in the market, due to low competition in the CDMA segment. More on that here.
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