Flavour of the Month: When would India get 3G experience?

CHENNAI,INDIA: The onset of the month of August 2008 witnessed India finally unveiling its 3G policy allowing Indian and foreign entities to pit against each other.

The public sector companies have got a special consideration in the process - that they could get a circle if they just matched the biggest bidder in a particular area.

Sure, it’s good news that our government has unveiled the policy, but it’s a trifle too late!

Countries such as Japan and Great Britain have rolled out their 3G offerings years back, but in India it has just arrived, this despite being one of the fastest growing telecom markets in the world.

Experts such as Ramandeep Singh, CTO of CalSoft Technologies seem excited about 3G coming to the Indian sub-continent.

“Am very bullish on the success of 3G in India and there are couple of reasons for the same. Firstly, the sheer size of handsets that is available for that and the 3G data services as a market in India would be extremely successful in India,” he avers.

BSNL and MTNL lead the way

Public operators such as BSNL and MTNL would be the first to commence 3G services and private players and its customers may need to be in queue for longer period in order to enjoy the benefits of the technology.

The primary raison d'être for this being the unavailability of essential spectrums of radio frequency that has to be given up by the Department of Space and defense forces. All this means a further delay in the actual implementation of 3G technology for the masses.

Also, pricing would be a key element in the whole exercise and the government expects to accrue about Rs. 40,000 crores.

While high advantage is being given to players like MTNL and BSNL, foreign players have also been called for grabbing spectrum but there is a cap on this.

As per the policy, only 10 players are to be permitted in a particular area and the government would auction only five licenses in the first stage and open up another five later.

In this bidding process, allocation of one part would be to MTNL in Mumbai and in New Delhi, and BSNL gets a block in other areas. This awarding of spectrum by the government to BSNL and MTNL makes it difficult for private players to fight it out for the limited space available.

Also, 3G policy states that only those operators who are currently holding 2G licenses can come to the bidding party and the new boys would have to shell out a whopping Rs. 1651 crore in addition to showcasing ability to employ 3G technologies to get a license.

Now these roadblocks would definitely make overseas players hesitant to bid for 3G licenses.

Interestingly, only three slots are for grabs in the biggest cities such as New Delhi and Mumbai, cut it down to two for private parties, as MTNL would eat away one allotted to them.

Vish Iyer, VP, Service Provider, West, Cisco India and SAARC opines that the delay in 3G coming into Indian shores could be a boon for service providers to study markets where 3G has been in place for years.

More than the delay, analysts believe that setting up the entire system in place would be possible only by 2010.

Tata Tele Services Limited which broke new grounds in the CDMA technology in India has its chief technology officer AG Rao pointing out: “We are presently evaluating our 3G plans and once we get the spectrum, we will be in a position to offer 3G services in 6-8 months.”

The company and Reliance are looking at offering servicing both its CDMA and GSM customers. Companies such as Bharti Airtel and Vodafone are already putting in place a vigorous 3G technology in place to tap a market which is virtually non-existent.

If one compares countries that have blistering growth of mobile users in it, China and India are in the top-3 bracket whilst it has zero percentage in terms of 3G subscribers.

The 3G policy brought out by the government can surely get the percentage of subscribers to a respectable position and on par with countries such as Japan, Italy, France and the United Kingdom but the infighting and ambiguity that exists with respect as to when the 3G services still very much lingers….