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3G in India by Sohag Sarkar


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A Business Paper on Third Generation Mobile Services popularly known as 3G.

The paper provides an overview on the 3G Technology that was introduced in India in the year 2011, describing the key players who won the 3G spectrum; how it would enhance and support other sectors like Healthcare, Banking & Finance, Media & Entertainment, Education, MVAS & Equipment Manufacturers. The paper also analyzes the ground work to be performed by operators before the launch of 3G services in the country.

Published in: Business, Technology
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3G in India by Sohag Sarkar

  1. 1. 3G in India: The Road Ahead By Sohag SarkarOverviewIndia is one of the world’s fastest-growing telecommunications market. Much of the success can beattributed to the progressive regulatory regime, huge capital outlays for network expansion and reductionof tariffs by operators, and also the falling handset prices. India’s mobile revolution is perhaps marchingtowards another milestone i.e. the 1 Billion Subscriber mark. As on May, 2011 our subscriber base standsclose to 875 million with 96% of the contribution coming from the mobile services. The introduction ofadvanced 3G Technology has added a new fillip to our phenomenal growth. What is 3G? Third Generation Mobile Telecommunications is a generation of standards for mobile phones and mobile telecommunication services fulfilling the International Mobile Telecommunications 2000 (IMT 2000) specifications by the International Telecommunication Union. Application services include wide area wireless voice telephone, mobile Internet access, video calls and mobile TV, all in a mobile environment.The first commercial launch of 3G was by NTT DoCoMo in Japan on October 1, 2001 followed by SKTelecom in South Korea in 2002. India joined the League of Nations offering 3G services in 2008 with thelaunch of its’ first 3G network in Delhi by state-owned operator (MTNL). Through an auction held in theearly part of 2010, seven of the private operators were awarded 3G spectrum and license across varioustelecom circles. BSNL/ Circles Category IDEA Bharti Vodafone Reliance Tata Aircel STel MTNL Delhi Metro √ √ √ √ Mumbai Metro √ √ √ √ Kolkata Metro √ √ √ √ AP A √ √ √ √ Gujarat A √ √ √ √ Maharashtra A √ √ √ √
  2. 2. BSNL/ Circles Category IDEA Bharti Vodafone Reliance Tata Aircel STel MTNL Karnataka A √ √ √ √ TN A √ √ √ √ Haryana B √ √ √ √ Kerala B √ √ √ √ UP (W) B √ √ √ √ MP B √ √ √ √ Punjab B √ √ √ √ √ Rajasthan B √ √ √ √ UP (E) B √ √ √ √ WB B √ √ √ √ √ Bihar C √ √ √ √ √ Orissa C √ √ √ √ HP C √ √ √ √ √ Assam C √ √ √ √ North East C √ √ √ √At present, operators are performing a phase wise rollout of their 3G network across various cities in thecountry. 3G promises to offer higher data transfer speeds ranging anywhere between 2 to 14.4 Mbps oreven more; which may appeal the net or data savvy subscribers in India. It also means that the usage ofvarious high-bandwidth services (hitherto being enjoyed only over desktop or laptops through abroadband connection) over mobile devices becomes a reality. With its advanced multimedia technology3G mobile devices would demonstrate a rich experience for the following services: Live TV, videostreaming, online gaming, video calling, etc. 3G also offer greater spectrum efficiency and networksecurity and can certainly accommodate the subscriber growth and capacity.
  3. 3. Convergence – What’s in it for other Sectors?Another reason for this astronomical growth in the Mobile sector can be attributed to the convergencewith other sectors to provide profitable service offerings. Mobile devices have emerged as a symbiotic channel to reach a larger set of audience with optimal utilization of resources: Healthcare: India is a laggard in terms of the healthcare infrastructure with existing healthcare delivery market being at a nascent stage and promising huge growth potential. Growth would be driven by increasing expenditure by the urban upper and middle class. Given this demand supply gap, it is believed that mobile communications (which has a far better reach than conventional healthinfrastructure) can play a critical role in changing the healthcare landscape. 3G provides the neededimpetus to M-Heath initiatives like Patient communication, Point-of-Care documentation or educationprogrammes, Disease management (record data/provide information on specific diseases), Emergencycare, Public Heath (remote data collection), Body Area Network (Mobile wearable or implanted sensorsthat monitor vital body parameters and movements and wirelessly transmit data from the body toprovider).Banking & Finance: Mobile devices are the largest financial transaction interface available today and can play a key role in achieving India’s objectives for inclusive growth in the financial services. 3G provide enhanced data and security (over 2G services) to enable mobile based M-Commerce transactions like Mobile payment (movie tickets, bill payment, M-wallet), Mobile banking (Alerts, transactions, trading), Financial inclusions (self help group) and remittances (especially to rural hinterlands facing financial exclusion).Media & Entertainment: The Indian Media & Entertainment sector is globally considered to be one of the most promising. The industry primarily involves the creation, aggregation and distribution of content, products and services, news and information, advertising and entertainment through various channels and platforms such as Cinemas, Television, Print, Radio, Internet and Mobiles. The multi-lingual Indian film industry for example is the largest in the world in terms of ticket sales and number of films produced. With the coming of 3G Services, subscribers would be able tohave advanced experience of the data rich contents over mobile devices like Video (streaming), VideoDialer Tones, Movie trailers, News broadcasting applications, and Live TV.
  4. 4. Education: Using 3G Service various kinds of formal and vocational training and learning can be offered like Language Training, Mobile reading (similar to E- books), Self Learning applications and Simulator based learning applications.MVAS Players: With the introduction of 3G Services, the MVAS players are coming up with innovativeapplications which otherwise would require higher bandwidth. Memory heavy applications now can beeasily downloaded by the subscriber; also user can experience online gaming by sharing gaming datawith a larger set of used through their connected mobile devices. The growing phenomenon of content sharing and upload (text, picture and video) over social media via mobile devices is another opportunistic area which is being explored by the MVAS Players. Various kinds of applications are being designed to support the social user community. Location based services like navigation support applications would also find a greater adoption amongst other value added services.Equipment Manufacturers: Indian as well as foreign manufacturers would benefit with the launch of 3G Services, by introducing 3G enabled smart phones and feature phones into the market. Local equipment manufacturers have already started to penetrate into the Tablet and 3G data dongle market (including one’s with multi-device connectivity feature) at much competitive rates; thus tempting a larger set of audience to try their product and services. It also means a win-win proposition as it increases the affordability of 3G products and services to the end subscribers.3G – The Road AheadThe launch of 3G Services across select cities is a modest beginning by the operators; however its’ thereis a long journey ahead:Network Stabilization: Operators have paid INR 67,719 Crores and approximately INR 20,000 Croreswould be spent on the rollout of 3G services across major cities of economic prominence. However, 6-9months would still be required to achieve a robust & a mature 3G network.Network Coverage: None of the private operators have got a pan India 3G license; which means tie-upsand alliances (like 3G Inter/Intra Circle Roaming) have to be formed between the operators to servicetheir mobile subscribers. Franchise models (or MVNO model if allowed by regulator in future) may takeshape for operators who wish to provide pan India 3G service and in return may provide additionalrevenue realization to the 3G operator present in a particular Circle. The entire 3G ecosystem would,therefore, take 12-18 months to take shape as a fully developed model.
  5. 5. Network Enhancement: The distinguishing characteristic of a 3G Network is its’ ability to provide higherdata rates to the end subscriber. However, the speed is dependent on the number of users accessing theNetwork at the particular cell site and on the design of the network. The biggest predicament faced byOperators would be to enhance their network bandwidth up to their cell sites (NodeB). This would entailadditional capacity increase in their backhaul network. Taking cues from 3G Network deployment acrossthe globes, Indian operators should look forward to infrastructure sharing options like sharing of a highbandwidth fiber backhaul amongst various 3G players.Pricing Strategy: Given the heavy Capex investment (license, spectrum and network rollout); operatorswould be challenged to set the right price for their 3G prospective subscribers. On one hand, they wouldtry to keep their prices competitive for their subscribers to come and experience the 3G service; on theother hand they would be tempted to recover their investment in quick time.Customer Acquisition: Operators’ first prerogative would be to draw the high usage subscribers whoalready own a 3G enabled handset (i.e. approximately 8-10% of their existing subscriber base).Introduction of low price 3G Handset models will sideline the initial apprehensions of 3G uptake in India.Overall the future of 3G looks promising, and in times to come operators would witness a higher influx of3G subscribers. Needless to mention, operators’ should focus on providing innovative andcomprehensive value proposition along with enhanced user experience through their upgraded networkand services.