India’s long wait for 3G

Nabila Habib

When mobile phones were introduced in the Indian market in the late 1990’s, not many might have foreseen that these tiny devices would conquer the hearts of half of the country’s population in just a decade. Now, according to the Telecom Regulatory Authority of India (Trai), the industry regulator, nearly 550 million people use mobile phones in the country.Despite the global slowdown that hit most of the industries severely, 2009 was another boom year for India’s telecom sector. The industry saw its subscriber base going up by 170 million last year, indicating that the boom is here to stay and probably grow larger. According to market research firm Gartner, the subscriber base will soar to 771 billion as companies adopt more efficient technologies and expand their networks to rural areas. The next big development in the country’s telecom revolution, many believe, will be by the way of the large-scale rollout of third generation, or 3G, services. Currently, most of us use the second generation, or 2G, mobile phones. 2G brought in some radical changes in the telecom industry. It helped operators increase traffic handling, improve call clarity and paved the way for more energy efficient, modern looking handsets. The 3G mobile telephony, already popular in many other countries, will revolutionise the use of mobile phones. Putting the novelty factor aside, 3G packs an attractive bunch of benefits in the package. With a 3G phone and access to the 3G network, one can do live video-conferencing, watch TV (of course on the tiny mobile screen!), browse the internet and do emailing and downloading. And all this comes with the old voice calls and messaging services that 2G phones offer. The most fascinating part is that 3G offers all these services 40 times quicker than the current rate. The average 3G data transfer rate is 5–10 Mb per second. This makes a three-in-one accessibility offer. You get to enjoy TV, the Internet and the mobile in one go. Despite all these features which could realign the country’s telecom landscape, one wonders why India, the world’s fastest growing telecom market, is taking such a long time to roll out this next generation telephony. India has already deferred thrice the auction of 3G spectrum due to lack of consensus on key issues such as the starting price of bandwidth and the number of slots to be sold. Also, the telecom ministry can allot spectrum for service providers only if the defence forces release 20 Mhz of spectrum. Recently an official of the Department of Telecommunications (DoT) has said that four slots of radio bandwidth will be auctioned along with the one already allotted to state-run firms BSNL and MTNL in February. However, it will take seven more months before the airwaves will be allotted for the companies as the defence ministry has said that it would release the spectrum only by June. The auctions are expected to fetch the government a whopping Rs 250 billion. Analysts expect phone companies to spend $1.5 billion on 3G spectrum alone. Besides, all the current mobile operators would have to bring in ‘evolutionary’ upgrades to 3G. But once the service is active, it is expected to do a 10 percent penetration in the first two years. Even with the current upheaval in telecom sector with companies trying to outdo each other with competitive tariff rates, 3G can carve a niche for itself. It promises better and surer revenue because it can provide about three times the capacity of 2G. Operators have been able to reinvent themselves with the help of 3G in the countries enjoying the services. If they can manage to send these vital messages across to customers, this should do the trick faster. According to Gartner, the number of 3G subscribers in India is likely to touch 90 million by 2013. Besides, Indian telecom companies have an example of 120 countries that are using 3G. They can take a cue from their marketing strategies and make it a sale-pitch, which differentiates between the wireless broadband used and value-added data services that became very successful abroad. After all, our typical enthusiasm for better and faster mobile phones should be enough to make 3G a hit in the market.