Reliance Per Subscriber Equipment Rate

[Greens 21]

Turbo charged

As India joins the wireless revolution, a new chapter in its telecom future is about to unfold.

The Business World

The equipment and handset vendors are clearly keeping the growth story going. Reliance Infocomm's deal with Lucent Technologies in 2002 set the benchmark for the lowest equipment prices in the world. If two years ago, capacity enhancement cost over $100 per subscriber, it is under $40 now. Nokia is now getting increasingly aggressive in the Indian telecom equipment market. Recent data suggests that its equipment rates have come down to $25 per subscriber - once again, among the lowest in the world.

In fact, impressed with Reliance Infocomm's negotiating capabilities, two US-based wireless operators called the company in the past month asking if they could source jointly, and thus bring down overall costs! In another landmark agreement, equipment vendor Ericsson agreed to a revenue-sharing deal with Bharti for upgrading its Delhi network to the 'Enhanced Data Rate for Global Evolution' (EDGE) technology. Based on a GSM data technology, the system will allow Ericsson to earn a percentage of revenues every time a subscriber downloads video or plays a Java game. In fact, some of the vendors that Businessworld spoke to admit that participating in the Indian market has forced them to radically reduce costs in their own companies.

Edited May 4, 2004 by Chirag