BANGALORE, INDIA: India has witnessed the highest growth rate of mobile subscribers, registering 49 percent in the period 2009-2010 and with the advent of 3G, the telecom industry and mobile services are only expected to see an upsurge.

The 3G/BWA spectrum and the advent of WiMAX and LTE-based 4G technologies will play a crucial role in shaping the broadband industry in India, finds Frost & Sullivan.

Also Read: BWA: Game Changer

Frost & Sullivan, recently concluded its second annual flagship event, 'GIL 2010: India - The Global Community of Growth, Innovation and Leadership', in Bangalore.

The Indian mobile market is still voice-intensive and is the operators’ major source of revenue. In this context, voice-based 3G services will see greater acceptance, adds the analyst firm.

According to Anand Rangachary, MD, Frost & Sullivan, South Asia, Middle East and North Africa, said: “The pricing wars in India have put pressure on ARPUs. This coupled with high churn rates and falling voice tariffs means that a wireless data strategy will be essential for operators going forward.”

A successful 3G business model would require a portfolio approach to 3G services and expanding the set of applications and services, exploiting new trends that expand the addressable market and ARPU potential and adopting a clean-slate approach to avoid repeating the mistakes of other developed market operators.

The ability to provide a richer portfolio of applications and services will enable improvement in data ARPUs.

Introduction of 3G/BWA has opened a huge market for equipment vendors, content providers, and smartphone providers. Smartphones are changing consumer behavior like never before by enabling consumers to access the Internet via mobile devices.

The smartphones volume for CY 2009 was 2.4 million units; growing at a CAGR of 39.20 percent for the period FY 2010 - 2016. The success of the smartphone as a consumer device has fundamentally improved the ease of use and access of 3G services.

The 3G opportunity increases with the options on handsets, dongles and other devices. Emergence of third-party application stores that provide greater revenue share to developers and enable consumers to access a greater variety of applications would be a crucial tipping point.

The operators are evaluating partnerships, outsourcing opportunities to rollout their network and services and this provides a tremendous opportunity to the equipment providers.

The VAS market for 3G is expected to be USD 1260 million; and will grow at a CAGR of 21.70 percent for the period FY 2010 - 2016. Applications like video conferencing, gaming, social networking, presence and instant messaging, mobile TV and convergent communications, which would be consumer centric services, would show increased traction.
The adoption would be evident even amongst enterprises. Enterprise mobility is one such area, especially, since enterprises are becoming increasingly aware of the mobility advantage to their organization in terms of increasing productivity and decreasing operational cycles.

Operators who have data-centric state-of-the-art 3G networks will be best positioned to capitalize on this emerging growth segment. Another potential area would be mobile marketing and mobile advertising; though not very effective yet, marketers are anticipated to spend increasing amounts of money on marketing.

The delay in allotment of the 3G spectrum to operators is a major hurdle to the rollout of services in the country. Also, the Information and Broadcast (IB) ministry has sought that all the telecom operators demonstrate that 3G services can be monitored, intercepted and blocked before rolling out the services.

This comes on the back of the fact that the intelligence agencies currently do not possess capabilities to monitor data transfer through any high-speed internet applications (Skype/video calls/Google Video chat).

Besides, the Government of India’s recent stance on the network security threats and the halt on fresh orders, has affected the sales of not only the Chinese Equipment manufacturers but also the Western vendors. While there are roadblocks in rolling out 3G, the fact remains that 3G would bring the next wave of revolution and strengthen India’s economy in the near future.