In an attempt to consolidate its presence in the telecom sector, CDMA operator Tata Teleservices Limited (TTSL) has announced its foray into the GSM space.
The company had earlier planned an investment of $2 billion over the next two years, of which $1.5 billion would be used to build a pan-Indian GSM network. According to company officials, the amount would be raised through a mix of debt and internal accruals.
In March 2008, DoT gave TTSL the green signal to start GSM services in 19 circles under the crossover technology policy, whereby CDMA operators can offer GSM services through their existing licences after paying a fee. TTSL has so far received GSM spectrum for 10 circles: Andhra Pradesh, Chennai, Tamil Nadu, Punjab, Maharashtra, Karnataka, Uttar Pradesh (East), Orissa, Kerala, Mumbai.
The Mumbai circle will be advantageous for TTSL, given that it accounts for the highest ARPU in the country. But rolling out services will not be easy considering that seven operators are already present in the circle, with Idea Cellular launching operations just last month.
In Mumbai, TTSL has been allotted 4.4 MHz of spectrum in the 1800 MHz band. Termed as “trial spectrum”, operators are expected to complete trials within a given time frame.
However, a few concerns remain. According to company officials, the delay in allocation of spectrum in other circles was putting the company at a competitive disadvantage as CDMA player Reliance Communications has already softlaunched GSM services.
Also, according to analysts, the slew of launches is likely to result in subscriber churn from one operator to the other ?? and, in turn, impact the already dwindling ARPUs of existing operators. While the increased competition may be a win-win situation for consumers, as it may lead to a further drop in tariffs, TTSL will have to pull out all the stops to create a niche in the already overcrowded GSM space.
