11 Comments

Summary:

India will have 150 million 3G connections by 2014, according to Wireless Intelligence. India just concluded a 3G auction (marked by bureaucratic delays) that raised about $11 billion, a big price tag which will ensure that the 3G rollouts are slow and 3G access expensive.

India will have 150 million 3G connections by 2014, according to a new forecast from Wireless Intelligence, a service of trade group GSMA Ltd. Indian authorities just completed a long, convoluted auction process which was marked by delays, thanks to classic bureaucratic snafus. The auction raised about $11 billion, a price tag guaranteed to make the 3G rollouts slow and 3G access expensive. The fact that none of the carriers really have a nationwide 3G footprint won’t help matters, either.

Wireless Intelligence’s data makes clear that carriers expect 3G data revenue per user (ARPU) of $11 vs. $5 a month for voice services. In order to pay for spectrum and 3G rollouts, the carriers are going to have to execute some fiscal miracles. Here are some other stats from the Wireless Intelligence report:

  • There will be 10 million (WCDMA & HSPA) 3G connections by the first half of 2011.
  • There will be 100 million 3G connections by the first quarter of 2014.
  • By the end of 2014, there will be 150 million 3G connections.
  • State-owned BSNL and MTNL, which were the first carriers to launch, have managed to get a mere 1.5 million 3G connections.
  • BSNL & MTNL are expected to control about 25 percent of the market, the three largest non-state-owned carriers — Airtel, R-Com and Vodafone — 43 percent of the market.

India is expected to have more than 600 million mobile connections by the end of the first half of 2010 and a billion connections by 2013. Like many developing economies, it’s leap-frogged fixed telecom and is instead embracing the wireless revolution. Huge pent-up demand and ultra-cheap calling plans thanks to a highly competitive market and low-priced handsets have made the wireless phone a fixture even in the most remote parts of the country, bringing telephony to far-flung rural areas.

It’s hard to get one’s head around the impact of India’s mobile revolution. The mobile industry has become the golden goose and the corrupt government structure is trying to kill it by what I think are bone-headed moves.

In my opinion, the long delays in the 3G auctions and rollout has put India behind in the telecom race. By the time 3G gathers momentum in India, the rest of the world will be aggressively embracing LTE, the next-generation wireless broadband standard.

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  1. Sanjay Maharaj Thursday, June 10, 2010

    Om, I did not know that BSNL and MTNL were state owned companies, what is the state doing owning companies which the private sector should be owning and running?. State has really no business being in the mobile platform but these enterprises should be left to the private sector with the state only ensuring that fair trade and telecommunications rules are in place.

    1. BSNL: Bharat Sanchar Nigam Ltd.
      MTNL: Mahangar Telephone Nigam Ltd.

      THose are names no self respecting private sector company will have :-)

      1. Funney names indeed

  2. Yes, India is behind in the telecom race.
    But 1 billion Indians with mobile phones and connectivity, with 150 million 3G connections by 2014 will certainly have a profound impact on the country and beyond.

    1. Brian

      In 2014 3G will be last generation technology. It would mean that they would be playing catch up on LTE or whatever.

      If it needs to grow up the technology food chain, the company needs to come up with ways to use its big market and then develop products that world would want. You do that when you are using the latest technologies and not yesterday’s products. I have written about this in the past, so won’t repeat for now.

      I am fearful that on 3G they whiffled.

  3. 3G is going to be a game changer for India in the coming years.They are already offering 4G for the Rural India through wimax or LTE the next generation wireless broadband.

  4. The 3G auction did become farcical. It was/is preposterous that you get all these 3G handsets and the technology is not available, and nor is it going to be in the immediate future.

    But as far as LTE is concerned, it seems that TRAI is keen to fix the problems that plagued the 3G process and jumpstart it, because they’re due any day now to release a white paper on it, and the minister of state for ICT recognises the importance of cheap wireless broadband (since wired broadband has really failed to take off in India). It looks like 3G and 4G might happen simultaneously, which would be great for the country.

  5. As with anything I expect the rollout in India to be full of gitches and demand is going to outstrip demand several times over for 3G.

  6. Sunil Malhotra Tuesday, June 15, 2010

    So private sector cos are gaining market share at the cost of BSNL and MTNL. Great. The BIG difference is that state-owned entities didn’t care about their customers. Private players don’t care about users. Mera Bharat Mahaan!!

  7. @Om Malik: Do you know about the BWA auctions. The rollouts are going to happen simultaneously. So why do you say, that by 2014, “they” would be playing catch up… I don t agree at all.
    The whole idea behind keeping the prices less for BWA was, more penetration of Broadband wireless in India.

  8. Om, I did not know that BSNL and MTNL were state owned companies, what is the state doing owning companies which the private sector should be owning and running?. State has really no business being in the mobile platform but these enterprises should be left to the private sector with the state only ensuring that fair trade and telecommunications rules are in place.

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