McKinsey doing GSM study for Anil? 

The company has 2 million GSM users in some circles.

NEW DELHI: The buzz first: the Anil Ambani-controlled CDMA major Reliance Communications has mandated consultant McKinsey & Co to conduct a feasibility study on GSM mobile services.

Reliance Communications, however, “categorically denied” any such development.  As for McKinsey, a spokesperson said, “Our global confidentiality policy does not allow us to talk about any particular company or comment on the work being done for a company.”

The chatter, however, refuses to subside, because Reliance Communications, which has around 20 million CDMA subscribers, also has 2 million GSM users in some circles.

What’s more, Reliance’s royalty tussle with CDMA patent-holder Qualcomm is not going anywhere at all.

Interestingly, Mukesh Ambani had hired McKinsey for a feasibility study of CDMA before launching the venture Reliance indicated its GSM interest to the Department of Telecommunications (DoT) a couple of months ago, according to sources. In its letter, the company sought additional spectrum for starting GSM services in Delhi and Mumbai, to begin with.  In June, DoT sought details from Reliance on its GSM plans, before arriving at a decision on additional spectrum allocation. Reliance is yet to it, sources said.

Meanwhile, the US-based Qualcomm continues to be in talks with Reliance Communications to ensure that the company stays on the CDMA platform. Qualcomm is the patent holder for CDMA chip and earns royalty from CDMA handset manufacturers.

Reliance and Tata Teleservices have told Qualcomm that the royalty charge is very steep and that it needs to be reduced, to make handsets affordable. But so far, Qualcomm has maintained that royalty charges are already low at 5% of the handset cost, and that there’s no room for further reduction.