In 2002, the Ambani brothers-Mukesh and Anil, had stepped on a rather challenging and less popular Code Division Multiple Access (CDMA) technology in their telecom business, wherein the world was getting adapted to the Global System for Mobile Communication (GSM) technology.
But, 14 years after backing the CDMA technology, Reliance Industries Ltd chairman Mukesh Ambani's telecom services bet on the fourth-generation long-term evolution (LTE) technology is ironically set to relegate the CDMA radio technology.
The CDMA never had the hold on the telecom market unlike GSM. As on 31 December, 2015, CDMA had less than 5% share of the total wireless subscriber base in India, according to the Telecom Regulatory Authority of India (TRAI). CDMA subscribers accounted for just about 47 million of the total 1.1 billion wireless users as on 31 December. The rest are GSM subscribers.
Reliance Jio has spent 1.2 trillion in financial year 2015-16 for the 4G launch.
"As we approach the launch of fourth-generation (4G) services by Reliance Jio Infocomm Ltd (R-Jio), we believe it could likely mark the end of CDMA services," Sanjesh Jain, research analyst, wrote in an ICICI Securities Ltd.
"It is critical for R-Jio as completion of 850MHz (megahertz) spectrum refarming by R-Com infers that R-Jio could use the spectrum (through sharing/trading route) for its 4G-850MHz pan-India launch. R-Com has already vacated 850MHz in nine circles. Due to strong data card business, 55% of CDMA revenue comes from post-paid, which could be a low hanging target for R-Jio," added the ICICI Securities report.
Meanwhile, sources say that Reliance Communications is expected to complete the migration of CDMA to 4G LTE service by mid-August, as most of its customers have already opted for the offered upgrade to 4G LTE services.
