Reliance's Huawei card

Reliance is known to play the game well. Its decision to give part of the 100 million line GSM project to Chinese manufacturer Huawei is a smart move considering that global majors like Ericsson and Nokia Siemens (the two controlled 100 per cent share of the Indian GSM equipment market until now) will be under pressure to match the benchmarks set by the $500 million deal. As it is both Ericsson and NS have walked away from parts of a medium sized contract offered by BSNL due to the low price points. Now with Reliance choosing to go with Huawei for the initial supply of GSM equipment, would the two global giants let the larger part of the RCOM contract go out of their hands? For Huawei, this is the first major GSM contract in the fastest growing cellular market. The Chinese have probably arrived.

Meanwhile it is really interesting to see how a completely fixed line operator has managed to become a full fledged GSM mobile operator- in true Reliance style. The latest round of battle between RCOM and existing GSM operators is similar to the fight between the two sides when Reliance wanted to get into the mobility space using the CDMA technology. In both instances- policy was tweaked to accommodate RCOM, in both battles there was a huge drama played out in the courts and in both cases it was RCOM which finally got what it wanted. However in the market, despite fears among existing GSM players like Bharti Airtel that Reliance's CDMA plans would bulldoze everyone else out, after more than 5 years-Airtel has won that battle. It remains to be seen whether RCOM's latest move to get into Bharti's own backyard with a GSM network would change that status. That's good news for telecom consumers like myself as the two giants fight it out in the market I am sure there will be more tariff cuts in the offing.