How do you reconcile the two numbers 36 per cent subscriber acquisition and 48 per cent volume shipment?

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1 Kanwalinder Singh, Qualcomm's president for the India and SAARC region, is very upbeat about the progress made by CDMA vis-ã -vis GSM. Not only has the price gap between the two narrowed considerably, volume shipments too are almost at par. In a recent interview with tele.net, he talks about the future of CDMA in India, the time-frame for introduction of EV-DO and Rev. A into the country, and the commitment to CDMA Excerpts... How would you describe the CDMA experience in India so far? The CDMA experience in India has been great so far. Last year, in terms of subscriber acquisitions, CDMA reached 36 per cent. So, the subscriber numbers are growing and we expect to grow them even further. However, the real news is in devices. CDMA, with aggressive handset launches in 2005, has been able to get a large number of affordable handsets into the market. According to the Yankee Group, in the last quarter of 2005, volume shipments for CDMA and GSM devices were practically equal, with CDMA at 48 per cent and GSM at 52 per cent. And what is important is that at the very low end, CDMA handset shipments outperformed GSM handset shipments in the same tier in December On the price side, the overall average selling price (ASP) of CDMA handsets was below GSM's throughout Finally, contrary to all the announcements, the ASP between GSM and CDMA handsets at the very low end has actually narrowed down to just over $3. So, volume and price parity on devices is happening. While there have been many announcements of low-cost low-featured handsets on the GSM side, we have been at work trying to address affordability requirements along with functionality, variety and compelling form factors, which are equally important for consumers. In addition to the excellent work being done by operators to introduce service innovations, we are pleased to see CDMA doing very well on devices. How do you reconcile the two numbers 36 per cent subscriber acquisition and 48 per cent volume shipment? The 36 per cent subscriber acquisition is for the whole year and the 48 per cent device sales are for the fourth quarter of However, clearly there is a disparity which comes from the fact that in the GSM world, it is not the devices but the SIM cards that are counted or as some may say, double-counted. For example, one person might have multiple SIM cards that are used with the same handset. In addition, on the GSM side, subscribers are counted as soon as the SIM is introduced but may not be activated. Therefore, there is a difference between device volumes and subscriber numbers. How much CDMA growth do you expect in India this year and next year? 1 / 4

2 I am focused on looking at growth in terms of device sales, as the real success story lies there. We would continue to be at parity with GSM volumes. However, we have always said that in CDMA it is not just about voice but a differential experience. We have executed on that philosophy through our value platform, which is being specifically evolved for India and emerging markets. For example, with Qualcomm's single chip (QSC), we are addressing four requirements: affordability, functionality, variety and compelling form factors. This is not just about the cheapest phone. In fact, Indian market data shows that if the phone is not compelling and doesn't have enough features, then, despite the low cost, it would not sell. This is an important validation of our differentiation approach. With QSC, what we are trying is to enable a common chipset, a common platform so that handset manufacturers can build multiple tiers of phones from a common design. For instance, the QSC family has three tiers of chipsets the QSC 6010, 6020 and QSC-6010 is for the entry-level device, with some data and BREW applications and then moving on to some functionalities such as full data and music in the 6020 and camera with and camera in All these chips are pin compatible and can be used interchangeably on a common board design. Thus, using these chipsets, the handset manufacturer can create a common platform that can be reused for multiple tiers. So, the design effort and time required will be dramatically reduced. We hope to reduce the time gap to get the devices to the market. Having narrowed the price gap and achieved volume parity at the very low end, QSC will enable us to move forward with more functionality and the variety the market seeks at affordable price points. Was the focus on low price (rather than higher bandwidth and accompanying applications) by the leading CDMA operator in India the right strategy? Have operators in India been able to exploit and "sell" the full potential of CDMA technology as has been done in many markets worldwide? I don't want to comment on any specific operator's strategy as every operator has his own strategy for subscriber acquisition. What I would say is that in the Indian market, one has to have the volumes and the differentiation. Those things are not mutually exclusive. CDMA operators in India have really focused on making things very cheap. For example, even at the very low end, we are able to provide not just voice/sms but features like polyphonic ringtones and some BREW download functionality. Therefore, a rural subscriber cannot just SMS but also download information on market prices, etc. Operators like the Tatas and Reliance are moving forward with this on a very affordable platform. Both operators are seeing higher adoption of data in non-metro areas. At the higher tiers, the Tatas have extensively used BREW-based applications and now Reliance is emphasising on BREW from Java-based applications. With market maturity, variety and volume will become integral to operator strategy. When can consumers expect to see EV-DO or Rev. A in India? Rev. A is going to be deployed in the following way Rev. A infrastructure would come with Rev. 0 software and will be launched with Rev. 0 devices. We expect that to happen over the next few months. CDMA networks would then be futureproof as everything is backward 2 / 4

3 compatible. Rev. A devices would start becoming available in Q4 of this year or Q1 of next year, and these would be devices that take advantage of Rev. A's higher bandwidth, low latency as well as the multicast capabilities. The key application that Rev. A would enable is voice-over-ip (VoIP). Finally, you would have a network that would house the old as well as the new IP infrastructure on an affordable platform. Assuming that the government finalises the spectrum policy in the next few months, we should expect EV-DO and Rev. A deployment in Q3-Q4 of this year. What potential applications of CDMA (current and future versions) hold the most promise for the Indian market? With VoIP becoming available, we will be able to do voice and data simultaneously for the subscriber, which we call concurrence. This would enable the user to talk and access data simultaneously. This would be the first application you can expect. With low latency of EV-DO Rev. A, you can expect push-to-talk or even push-to-video capability becoming accessible. On the application side, platforms like BREW will become even more supercharged with EV-DO capabilities and would help, say, increase the potential for enterprise and consumer entertainment applications. 3D and multiplayer gaming will come onto these devices. On the chipset side, above our value platform we have the multimedia platform, the enhanced platform and then finally the converged platform which will enable superior consumer devices and experience.we expect GSM operators to migrate to WCDMA for voice efficiencies and advanced data capabilities. There might be a short deployment of UMTS but a large deployment of HSDPA. Looking beyond CDMA 2000 and WCDMA, we are very bullish about broadcast technologies like MediaFLO and mobile TV. These technologies will overlay on the 3G networks and will be seamlessly integrated into 3G devices. Finally, we think that macro networks will become integrated with what we are using in offices and homes. Tell us about MediaFLO in India... MediaFLO is a technology that is well tuned to Indian needs. First, in India, we have a very large number of mobile subscribers and entertainment is a huge industry. We believe MediaFLO is well suited to address mobile mass market demand at an affordable price. Second, MediaFLO is designed from the ground up for the mobile device, enabling exceptional video quality (QVGA, 30 frames per second) with channel switching time of less than 1.5 seconds. Competing technologies which were developed from the terrestrial world do not even come close. MediaFLO's quality of content and viewing experience is going to make TV mobile. Finally, we think that the market is getting to a point where voice revenues are flat. In fact, we feel that high quality mobile broadcast will actually increase data usage as subscribers would be prompted to, rather than have to, discover data applications. For example, buying a song after viewing a music video will be a natural usage scenario. How committed are you to CDMA 2000? 3 / 4

4 Extremely committed. CDMA 2000 has a robust roadmap that delivers a seamless migration path, backward compatibility and ongoing performance improvements. CDMA 2000 operators in India will migrate to EV-DO Rev. A and Qualcomm is committed to further innovations and technological advancements in this space. This is reflected in DMMX which is our vision for DO in the year Second, we are innovating both for CDMA 2000 and WCDMA to not just address "high tier" segments that are prevalent throughout the world, but with chipsets like the QSC to address the affordability issue, which is key for emerging markets like India. Qualcomm contributes to both 3G standards CDMA 2000 and WCDMA. We see the adoption of both these technologies in the Indian market, and are very committed to seeing both technologies succeed. About Us We are Hiring Contact Us Subscribe Privacy Policy Advertise Terms & Conditions Copyright 2010, tele.net.in All Rights Reserved 4 / 4

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