Reliance : Migrating from CDMA to 3G

CDMA vs GSM:

Capacity :
Tremendous capacity of CDMA is uncomparable to that of GSM.
Power :
CDMA definitely hogs less power for the same number of subscribers.
Performance :
CDMA caters to users individually than GSM that has a single frequeny with different codes for each user.
Quality :
Sound quality of CDMA is governed by speech coding technique, CELP(code excited linear prediction).CELP is better than its GSM counterpart MELP (Multi-pulse excited linear prediction coding and allows to code speech more efficiently using low bit rates.

So much so far, still...

Why is Reliance moving to GSM?

CDMA typically works at 1900 MHz spectrum for which most of the commercial equipment vendors are present in the US market and the natural migration part is EVDO (Evolution Data Optimized ) from the current CDMA 1X. Whereas in case of GSM operators, the natural migration is WCDMA and that works at 2000 MHz frequency. It seems DoT or TRAI are thinking of the idea that the 3G spectrum will be available at 2000 MHz, for which there are not many commercial equipment vendors for CDMA.

So, if Reliance Communication move to WCDMA, which works at 2000 MHz; they are certainly heading right..as the capex would be definitely higher. Thus, it is better to go for GSM and put a GSM overlay on the CDMA backbone and eventually migrate to WCDMA in the 3G space.

The incremental capex is not going to be large because the inactive portion of the network today costs almost 60-70% of the capex, where the active portion, which is the electronics portion will be new cost, maybe 30-35% of the total network and for that too they will go in a selective manner.