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Indian carriers may launch 3G this year

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CIOL Bureau
New Update

Shailendra Bhatnagar



GOA: India's wireless services industry is likely to push into 3G services this year as carriers roll out broadband access in big cities and move deeper into untapped rural areas, the head of Ericsson India said.

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Swedish telecoms equipment maker Ericsson is the largest supplier of telecoms gear in India, the world's fastest growing major mobile phone market.

"The broad themes for the Indian market in 2005 would be that Indian carriers will take their first steps towards 3G services, broadband on mobile will be a big hit this year and there will be huge expansion in rural areas," Jan Campbell, managing director of Ericsson India, told Reuters in an interview.

"To start with 3G will be deployed in some hotspots in metros."



3G networks, which are winning customers across Europe and Japan, offer faster Internet speeds on mobiles, enable music and video downloads and also improve voice quality. These value-added services help operators to improve profitability in the fiercely competitive market where voice services are commoditised.

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"There is a demand for 3G services in India. We already see entertainment services picking up in the metros," Campbell said.

Carriers such as Hutchison Max Telecom Ltd. already offer TV channels, picture messaging and video downloads. Hindi movie song-based ring tones are a rage and mobile gaming is also getting popular.



"Almost 50 percent of users in metro cities are looking for services beyond voice and texting," Campbell added.

Analysts expect India to auction licenses for 3G services in the third and fourth quarters of 2005.

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LOWERING COSTS



Campbell said Ericsson would invest $50 million over two years to manufacture rugged base stations that would help cash-starved mobile services firms reduce operating costs and pass on the savings to customers in the cut-throat market.

Base stations account for more than a fourth of network costs, he said. Ericsson's new station provides 30 to 50 percent more coverage and lowers power consumption by 30 to 40 percent.



Campbell, who joined Ericsson in 1999, expects new subscriber additions in India could cross 3 million a month by March, 2006 as carriers such as Bharti Tele-Ventures Ltd. and Reliance Infocomm Ltd expand their networks to more than 5,000 towns and cities from about 2,000 now.

Currently, the 50 million-strong sector adds about 2 million new customers a month.



"There is serious demand. The bottom of the pyramid in India is very wide and the addressable market size is big when prices are low. We expect India to have 200 million users by 2008/09."



Less than six in a 100 people own a mobile handset in India compared with more than 25 in China and more than 60 in Europe.

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Mobiles are no longer a luxury in the country as some of the cheapest rates anywhere - 2 to 3 U.S. cents a minute of a local mobile call - attract users into the fast maturing market.



Campbell said he expected carriers to lower the denomination of prepaid top-up cards so that vast sections of rural India could go mobile.

Even a decade after the launch of mobile services in India, GSM and CDMA networks cover only about 25 percent of the country's one billion-plus population.



India is the seventh largest mobile market for Ericsson. The company competes with Nortel Networks Corp. and Nokia for GSM business and with Lucent Technologies and Motorola Inc. in the CDMA space in India.

It has more than one-third share of the expanding telecoms gear market based on the number of users.

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