CDMA tech operators face image problem

Andi Haswidi, The Jakarta Post, Jakarta

With more CDMA-based cellular handsets entering the market, variety and price are no longer the main obstacles to the industry's growth in Indonesia, operators claim.

When CDMA technology entered the Indonesian market some six years ago, most operators targeted entry-level users by positioning themselves in the fixed wireless market and offering much lower prices than GSM technology.

Its coverage-area restrictions and the "cheap" image have fed CDMA's reputation as an underdog with technological limitations.

During a CDMA Development Group (CDG) discussion forum with reporters Monday, operators agreed that the stigma was a positioning issue that needed be addressed.

Indosat fixed brand head Sasotya Pratama said the lower price was also enabled by the fact that CDMA technology offers efficiencies.

"The problem is not one of technology but more one of perspective," he said.

"The stigma does exist," said Mobile-8 chief operating officer Cheek Pok Tin. "However, I think the new advancement that allows users to have broadband connections under 3G technology will easily change people's perspectives on the technology."

Mobile-8 is the first CDMA operator to launch 3G technology and the only CDMA operator to hold a license for national coverage.

CDG chief operating officer James Person said product positioning was also important.

"In countries such as Japan, Korea, New Zealand and the U.S., CDMA technology has already reached the high-end market with a company like KDDI holding a 50-percent market share due to its excellent services," Person said.

Person announced that the total number of CDMA subscribers in Indonesia had surpassed 10 million under five brands: Esia, Ceria, StarOne, Flexi and Fren.

And the figure will only go up, he said.

"In a market where only one in four people have access to phones, CDMA2000 has proven to be the technology of choice to deliver telephone, internet access, television and broadband data services," Person said.

As the rights owner for CDMA technology, Qualcomm promised a new technology that could further lower the price of CDMA handsets.

"Most handsets now use four chipsets. Our latest technological advancement merges the four into just one chip, which could bring down production costs," Qualcomm Indonesia country manager Herry K Nugraha said.

"Furthermore, the battery life will be longer as it would only feed one chip instead of four."

Herry said the growth of CDMA subscribers would be supported by increasingly advanced handset technology, variety and prices.

"Wholesale prices for low entry-level CDMA handsets continue to decline rapidly. They have reached about $25 in India today and about $30 in Indonesia."
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