Why 3G make great sense for rural markets

By : |October 20, 2008 0

NEW DELHI, INDIA: The euphoria around 3 G spectrum allocation refuses to die down. The excitement from telecom vendors is understandable for they don’t need a second invitation to roll out their latest range of products, but when service providers get excited about a particular technology, the technology has to be taken seriously.

Globally, 3G is fast becoming the accepted technology platform across geographies. While in Japan, 3G has been available since 2001, today the technology is serving 25 across Asia, Europe and USA.

According to the "3G Market Forecast to 2010," by Research and markets, an international market research agency, there were a total of 614 Million 3G subscribers globally at the end of 2007 and the number was forecasted to grow at a CAGR of 34% in near future.

According Strategy Analytics, June 2008, the share of 3G subscribers in India is expected to be 9.3% of the overall subscriber base by 2010.

What is 3G

3G stands for the third generation of mobile phone standards and technology. The technology allows network operators to offer its subscribers a range of advanced services and also achieve better network capacity. Services include wide-area wireless voice telephony, video calls and broadband wireless data, all in a mobile environment.

Besides these,  3G can find potential use in facilitating initiatives such as e-governance, education and tele medicine. Given India’s booming mobile market and extensive network coverage, mobile broadband could be the answer to taking the e-revolution to the last mile.

Why get Euphoric about 3G

But why such euphoria for this technology. Why are telecom players like Bharti, Vodafone and relainec in cutthroaty competition to outbid each other for getting the already scare spectrum

Understood it is a better technology, but can India really need this technology when we already have plethora of technology around. Will 3G actually improve the broadband penetration in coming years and will it dissolve the last mile barrier.

“Yes. 3G technology would definitely be a big revolution in India telecom space. 3G will be bigger, better and faster than 2G and because of that, will enable the delivery of many more applications than are presently possible on 2G” says Anil Arora, Business Group Head, GSM

“ The advantage of 3G technology over the existing 2G technology is the speed of data transfer, and the killer application and the user today our more focusing on data. 3G has a future in India and that it is relevant and important”, adds Arora.

“Since there is very little copper and coaxial cable network, the only way to increase the broadband penetration in India is through wireless technologies. 3G and 4G wireless technologies such as WiMAX can help improve broadband penetration” adds Bharat Bhatia, Regional Director, India, SAARC and South East Asia, Motorola Global Govt Affairs & Public Policy.

“These technologies can support Internet Connectivity for applications such as Web browsing, dynamic web access, web-casts, E-Mail, IM, E-Governance applications, Telemedicine and Distance education and E-Commerce” adds Bhatia.

The Nay Sayers

However, across the world except for Japan and Korea, 3G services have not been able to meet the expectations in other developed countries. Moreover, in developing countries, the subscriber ratio is negligible, and this is one of the reasons for delay in 3G rollouts.

And in country like India, which mobile infrastructure is comparatively nascent when compared to developed economies like Japan and Korea, will the 3G roll out exercise will be one in futility, “

“No definitely not. 3G meets number of needs for India’s diverse population, bridging the digital divide while providing a platform to meet the future demands for 4G mobile broadband services,” says Bhatia

“This will enable the proliferation of wireless broadband for all consumer segments, including broadband services in dense urban and suburban areas, rural broadband connectivity to enable high speed wireless applications and services, and enterprise broadband access across the country” adds Bhatia.

Why 3G make great sense for rural markets

Vice President – Marketing & Strategy, Ericsson India, P Balaji, tries to put to rest all the apprehensions about the efficacy of 3G technology in India scenario.

Ericson has recently completed a successful pilot of 3G powered Gramjyoti Rural Broadband Project, which is India’s first 3G-powered rural broadband demo network delivered the benefits of 3G across 18 villages and 15 towns in Tamil Nadu.

The project was supported by BSNL, Bharti, Maxis, Apollo and Erickon was provided 3G spectrum for three months by the government on experimental basis.

The project, says Balaji, can be replicated to help operators percolate the fruits of Information revolution to 250, 000 villages in the country.

“The pilot was done in real time conditions. The applications we rolled out and the services were made available in a real time. So when operators do a national rollout they have real time example as how to they will go about.” Says Balaji

Erickson provided high-speed internet and mobile connectivity over a 3G backbone, helping rural communities access range of new services – telemedicine, e-education, e-governance, online local information, voice and video call services and live television

The villages were connected by a mobile community centre, which carried personal computers, phones and audio-visual equipment to each of the villages on rotation.

Balaji explains the experiment was a great success and from the luxury and comfort of community centres in villages, the farmers were able to log into a high speed internet connection and know the latest selling rates of agriculture produce, weather and crop updates at the click of button.

”Things like land record registrations, issuance of death/birth certificates and ration cards, which normally takes longer time were done faster. Forms for births, deaths and land records could also be accessed from the centres”, says Balaji

”Children were taught through distance education, by a teacher sitting in Chennai. Villagers got treated by best doctors from Apollo, who interacted through video-conferencing from state capital”.adds Balaji.

f 3G is so good, why have we been so late to catch the bus

While other countries in Asia Pacific and Europe have delay already implemented 3G, and many have in the verge of implementing 4G. India just begun to implement the 3G networks by 2008. If 3G as a technology is so good, why has taken government so much time to open up to 3G in the country

3G rollout in the county has a chequered history in country. Right from 2002, the ministry of telecom found it tough to framework the 3G policy for the country.

In November 2005, the then Minister of Communications and Information Technology Dayanidhi Maran had after years of deliberation had promised to rollout 3G policy in the first quarter if 2006.

“The decision on 3G spectrum is expected to be taken by first quarter of 2006,” Maran had said.

However following his ouster from the UPA government, the process again hit a road block and it was only when the present minister took charge, the process was again started.

The Ministry of Communications and IT had been punctually missing the deadlines one after another, for announcing the 3G policy for the country’s telecom sector.

By August 2007, the government had missed out more than four commitments made on the announcement of the 3G policy.

Primarily, it has been the row over the available spectrum between the ministry of defense and the Ministry of communication that has stalled the progress of the 3 G rollout in the country.

The Ministry of Communications and IT has been seeking spectrum from the defence forces to be allocated to the telecom service providers. Howver, the ministry of defense has been refusing to vacate the 25 MHz of spectrum for a long time now arguing it very important for country security.

The telecom minister had been pointing out the 3G spectrum policy would be announced only after the defence ministry vacates the spectrum.

The Department of Telecom (DoT) state claims on the spectrum citing that the 1885 Indian Telegraph Act empowers Ministry of Communication as the sole owner of the spectrum. The department has estimated about 60 MHz of spectrum is lying unutilized by the defence forces.

 “ The key challenge in India is still the spectrum. Compared to 30-40 MHz per operator in Europe, India is still able to give only 10-20 MHz per operator. This makes roll out of the high speed data networks a major challenge”, says Bharat Bhatia, Regional Director, India, SAARC and South East Asia, Motorola Global Govt Affairs &Public Policy (GGA&PPPolicy)

As if the row between ministries wasn’t enough, the fractious relationship between Department of telecommunication and TRAI who never saw eye to eye with each other on spectrum allocation caused the inordinate delay.

Right from issue of base pricing of the 3G spectrum auction to the more contentious issue of allowing foreign operators to join the telecom fray, the constant discord between these minsirty fo teelcom and TRAI led to delay in framing a much needed 3G policy for the county.

TRAI had been keen to keep foreign players away from to bidding for 3G spectrum in the country. TRAI had rejected DoT recommendations to include other prospective operators with foreign partners who fulfill the conditions for getting Unified Access Service (UAS) licenses.

TRAI contended that existing licensees had already made huge investments in the infrastructure and their systems were in place, therefore, they were in a better position to deliver 3G services efficiently at low incremental cost.

In contrast, DoT had also been recommending foreign players to bid for 3G spectrum but TRAI had been feeble to the recommendations.

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