Operators' fate with 3G in India

MUMBAI, INDIA: While the telecom operators still await the government's decision on spectrum allocation for the launch of 3G services in India, the operators community discussed the road ahead under 3G, during the fifth international conference - 3G India 2009 held today in Mumbai.

“For 3G services, it's very important to create an ecosystem that would need 3G networks, devices and applications. At large with 3G services, users mostly go for mobile Internet access with multimedia services such as content downloads and gaming,” said P Balaji, Ericsson India's vice president – Marketing and Strategy.

Further Balaji commented that although BSNL and MTNL had rolled out 3G services they did find it difficult to reach out to users and failed to increase the 3G penetration among users. Interestingly, Bharti Airtel's senior vice president – Network Quality and 3G, Abhay Savargaonkar indirectly criticized the government for the delaying 3G spectrum allocation.

“Every year we have been saying that 3G is coming but we hope that the spectrum allocation happens this time and we should be ready to roll out 3G services,” said Savargaonkar. He pointed out that according to TRAI's June'09 survey, the urban teledensity with 95 per cent has almost reached saturation point while the rural teledensity increased by 16 per cent.

“Overall the telecom penetration in India is about 40 per cent while the broadband penetration is just 0.54 per cent against 14 million Internet subscribers and 126 million wireless data subscribers. The growth rate in wireless market is moving towards the 'S' curve and ARPU's are decreasing , which is a biggest challenge,” Savargaonkar stressed.

However, Aircel's chief of Network and Engineering Operations Mallikarjuna Rao said that Indian market has the highest subscribers with healthy competition and operators will have to be innovative in tariff plans.

Giving the iPhone example, Rao stressed the one innovation can change the game and the phone has changed the paradigm for the industry. “For operators success, we need to collaborate, share and innovate and in rolling out 3G services we will need the common highway approach,” he added.

“Internet mobile is the killer application and video calling and mobile TV are the next killer applications that can make the operators dumb; however, the challenge is demand of higher spectrum and it will decide the fate of the industry,” Rao commented.

Taking the discussion in a new direction, Idea Cellular's chief technology officer Anil Tandon said that, as the voice ARPUs are decreasing with increasing competitions in the 2G space, we have to look at new services which can be only be done by 3G services; however it will add opex for operators.

“Services offered on 2G are the same as that of 3G except the video call and higher Internet access. However there exists the spectrum crunch in 2G, which can be balanced by 3G spectrum. And India is presently sitting in good time where we will be getting a more matured technology compared to earlier adopters of 3G,” said Tandon.

Tandon pointed out that recently China Mobile launched 3G and if India also rolls out 3G then India and China can bring in paradigm shift for the telecom industry due to the sheer number of subscribers.