25 Comments

Summary:

Indian operators are aiming to roll out 3G even before earlier generation services like GPRS take off. The country’s telecom regulator is already beavering away on issues like the price of 3G licenses, the allocation of spectrum and how much companies can charge for value-added services, […]

Indian operators are aiming to roll out 3G even before earlier generation services like GPRS take off. The country’s telecom regulator is already beavering away on issues like the price of 3G licenses, the allocation of spectrum and how much companies can charge for value-added services, and now it has allowed Bharat Sanchar Nigam Ltd., Mahanagar Telephone Nigam Ltd., Bharti Airtel and Hutchison Essar Ltd. to use 3G spectrum to test equipment in anticipation of a launch later this year, says Reuters .

Optimists say India can leapfrog slower-bandwidth tech with a speedy launch of 3G. But there are some questions whether India is really jumping ahead of the curve or blindly following in the footsteps of operators in more developed markets—where 3G’s fancy gizmos proved hard to sell to consumers. We know, high-end data and video downloads and Bollywood movies on your mobile, yada, yada, yada. But here’s a frank assessment: “3G as a revenue booster [in India] is far-fetched at this time,” Shubham Majumder of Macquarie Research told GigaOM.

On the upside, freeing up the 3G band may alleviate a spectrum shortage that makes a mobile call in a place like Bangalore a crapshoot on a good day—plagued by dropped calls and that infuriating “network busy” signal. But don’t get too excited yet. “A sudden, massive overnight migration to 3G may be unrealistic to expect,” Tonse Telecom’s Sridhar Pai told GigaOM. “It will also come with a fee, and some won’t adopt it immediately. In the intermediate time, it may make things worse.”

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  1. I lowe my India!

  2. Hi-
    Well the article is written without any good explanation of why 3G will not be a hit. My opinion is that it will be a big hit. Remember when mobile stated in India it was a more luxury in India than the car! But today we see even begger and transexuals (another form of beggers only in most cases) queing up in photos published.
    I remember one incident here. AT&T had hired a big consulting firm to check validity of mobile services in US. The firm advised it will not be viable to invest in mobile services and the whole market by 1995 might reach 70-100 million USD!!! How wrong the company was!
    So cheerup lady and have some positive view about india!

  3. Few points to note are, 3G license fees is still under consideration and the rollout may not happen until Q1-2007 in metro circles. 3G will be launched in localized context.

    It should have acceptance with post-paid subscribers first and slowly gradually with pre-paid. I expect 30% of India’s total mobile subscribers to be using 3G services.

  4. The spectrum has been offered for trails just for a month right now. Only the GSM players have been given time to test out their infrastructure on a non commercial basis.

    http://www.mobilepundit.com/2006/09/14/3g-trials-get-off-the-ground/

    Lots to be done before it actually reaches the common man. I wonder how Nokia’s “3G For All” initiative will play into it!

  5. Its a good idea to skip 2g and go directly to 3g. As far as handset support is concerned there is not going to be too many issues. Indians love their handsets and actually see them as a statement of style and cool and status. On an average the handsets I’ve seen in india are better than the carrier subsidised crap that owns market share in the us.

    Also with the pathetic state of indian broadband penetration I can see Indians directly using 3G handsets as their only internet connnection. The data rates 3G can provide are more than that dished out by the indian broadband pipes.

    India is also more welcoming of media content on their mobile phones. Think music. Most Indian teenagers cannot really afford a mobile phone AND and Ipod AND a camera. They would happily use a mobile for these functions (and they already do). Rolling out a mobile music download service makes a lot of sense in India. ( yeah Yeah I know making people pay is not easy .. but still the possibilities are intriguing)

    There is no reason to upgrade to 2G. It does not really provide too many advantages. Its better to skip directly to 3G. However as I see it, the rollout will be slow.

  6. Good luck with using 3G handsets for internet connection. Even though these systems promise high data rates, the available bandwidth is shared among many users and in India’s case, among many many more users. In earlier 3G systems, the standards bodies completely ignored the need for upload speeds and later hurried in to add it in what they call 3.5G. I think India should not lose track of the potential of wired broadband. Wireless is more of a convenience and cannot guarantee quality of service. A 3G upgrade to ease voice congestion makes sense but for data, it may not be a bad idea to let all the 4G developments based on OFDM and MIMO to mature.

  7. Forget 2G, India has 3G Plans…

    Shailaja over at GigaOm seems to be implying that the country is jumping to 3G while skipping 2G in the process. This was “discussed here”:http://www.indianpad.com/story/12052 yesterday.

    However, I must clarify that India has had 2G and 2.5G netw…

  8. Murali

    I completely agree with the limitations that exist on 3G Data. However you have to realise that when 128kbps is considered broadband. 3G is a viable medium for last mile connectivity.

    Also customers in india seem to have less trouble accepting lower quality of disruptive technologies. Camera phones are a very good example.

  9. Problems with 3G:

    1. Cost of spectrum: The India Defense buys equipment from both north and south blocs, which operate on different frequencies. Hence, it occupies more spectrum. The cost for the defense to migrate to another spectrum is estimated at around Rs.1000cr.

    2. Cost of infrastructure: In the US, Verizon, Sprint and Singular have spent a combined $10 Bn on establishing 3G networks. If import duties in India (at 37.5%, I think) come into force, you can imagine the investment required. I’m not sure if the duties applies to “infrastructural electronic goods”, but the government will extract its pound of flesh.

    3. 3G mobile handsets are more expensive. In Finland, the government subsidised phones in order to make them affordable. Add duties to 3G phones initially imported into India. Reduces margains for handset manufacturers.

    Experts at the Mobile India Forum, which I attended recently, recommended that India should hold on, and research packet based technologies that work on internet protocol. They said that India should invest in creating IPR in NGN and 4G, instead of following the fashion. With such high investment, chances are that low adoption could ruin the operators.

    Maybe someone can convince me otherwise. Please.

    Also, I’ve read here before that in India, 128kbps is considered broadband. Let’s just set the record straight – according to a government notification, only connections at or above 256kbps are broadband. It’s certainly not enough, but it’s still 256kbps and not 128kbps.

    Yuvamani – I don’t think acceptance of poor quality photographs is an indication that poor connectivity is also acceptable.

  10. India skipping 2G?

    Try telling that to the 150 million Indians using the 3 major GSM networks, or the many others using the 4 CDMA networks in India…

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