Wireless Battle Intensifies in India

With the entry of Vodafone, the fastest growing Wireless market in the world is witnessing an intensified war from Bharti Airtel, Reliance and Vodafone-Essar.

Reliance Communications still starving to get PAN-India GSM spectrum introduced  low cost handset through its CDMA division. Day later, Nokia introduced low cost handset to uphold the spirits of GSM operators. However, Reliance low cost handsets were atleast $8-10 less than Nokia’s. Bharti Airtel made an intelligent move and announced nearly 50% drop in subscribing to lifetime prepaid mobile phones to mere Rs 495 thus equalling the entry cost for new subscriber with that of Reliance. Voadafone-Essar and Idea followed Airtel’s move.

In December 2006, Sarin had struck a deal with ZTE to manufacture low cost mobile handsets – Vodafone 125 and Vodafone 225. This means Sarin was confident of buying out Hutch in the Hutch Essar JV and was to kick off a rate war in India. [I just love such CEOs, one was Mr S M Datta, ex CEO of HLL, who masterminded the merger of Broke Bond India, Lipton India, Ponds India and Tata Oil Mills into HLL over a period of 5 years.] Just a while ago, Vodafone announced that it will launch its low cost handsets Vodafone 125 and 225 in India and Tanzania.

The battle just doesn’t end here. Pre 1999, it would cost us $ 2 / Minute to call the United States. Now, Airtel Mobile has announced that it will cost mere Rs 2 / Minute to call the US and Canada using their calling card. I am wondering if this is the beginning of the shakeout ? Is their any operator who wants to extend the rate war to Broadband and put millions of Indians on the Info-Highway ?

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