Indian operators must rethink investments in 3G: Ovum

NEW DELHI, INDIA: At a time when bidding for the 3G auction is heating up, and the bid price for the pan-India spectrum towering over Rs 58,400 cr, here is a word of caution from the industry experts.

According to consultancy firm, Ovum, Indian mobile operators should look to bid aggressively for the BWA spectrum envisaging long term strategy. Uncertainty around future allocations of 3G spectrum means that MNOs must adopt forward looking strategies and look at investing in broadband wireless access (BWA) spectrum as well. Subsequent to the 3G auction, there will be a BWA auction for two slots of 20 MHz TDD spectrum in the 2.3 GHz band.

Already there are indications from the industry that the bidders may not opt for pan-India 3G, and there is a higher probability of a fractured 3G footprint and the companies may have to hasten to consolidate.

“The prevailing view is that 3G will offset the rapid erosion of voice revenues with increased data revenues. However, we believe that the primary benefit to Indian operators from the paltry 5 MHz FDD of 2.1 GHz 3G spectrum available via auction will be to offload traffic from high-end subscribers for capacity relief. Any incremental data revenues will represent an upside,” says Shiv Putcha, principal analyst with Ovum's emerging markets practice.

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