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Is there a market for 3G services in India?
January 10, 2007
With even the Airtel chief saying 3G isn't as hot as it was some years ago, Indian telcos will have to follow a different
T V Ramachandran, General Secretary, COAI
"3G can be instrumental in alleviating the severe spectrum crunch, especially in the metros, where there is simply not enough 2G spectrum to fuel the aggressive growth in services".
The 3G technology is the natural evolution of 2G services as it will facilitate higher speed and data throughputs enabling
It is a well known fact that broadband penetration is very low in India and that the rollout of wired broadband will entail
President Kalam, in his inaugural address at the recent India Telecom Summit, correctly summed up the power of the
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.
3G can also be instrumental in alleviating the severe spectrum crunch being faced by many operators, especially in the
Because of its higher voice capacity, 3G could also facilitate the delivery of far more cost-effective voice services. However, this will happen only if operators do not have to pay exorbitant prices for 3G spectrum. An auction of 3G spectrum could lead to irresponsible bidding resulting in high costs and tariffs, which would completely negate the tremendous capacity advantage that 3G has to offer.
Auctions also have another downside - by their very nature, they entail a selection amongst bidders, which would result
Therefore, the answer to the question raised is that, yes, 3G has a future in India and that it is relevant and important, but the key to the success of 3G will lie in its price, that is, if it has to become a mass service. 3G did not take off in the west because of the exorbitant prices attached to its spectrum, which made the service unaffordable and restricted to a niche market.
The Indian consumer is highly price sensitive, as has been amply demonstrated in the case of 2G services, where exponential growth took place as competition increased and tariffs dropped. The same principles will hold good for 3G as well. Affordability of 3G services and an equally competitive market will thus be critical factors in the success of 3G in India.
Rajesh Chharia, President, ISPAI
"Spectrum continues to be a costly entity, which coupled with the cost of deploying infrastructure, requirement of closure towers and change of handsets, will escalate the price factor manifold".
Whenever we wish to introduce a new technology in our country, rather than taking steps for fast deployment, we lose
A similar thing appears to be happening with the deployment of 3G services in India. For the last many months, this
Now these countries are in the process of deploying 4G but let us not forget, the success of 3G has been due largely to
The failure of 3G in European countries is attributable to the very high cost of spectrum. In Germany and the UK, the
In comparison to the prevalent technology in India, we would need a lot of additional spectrum for implementing 3G, and spectrum, as we know, is an extremely precious and scarce resource. Spectrum continues to be a costly entity, which coupled with the cost of deploying infrastructure, requirement of closure towers for transferring the signal and change of handsets, will escalate the price factor manifold.
Not only are 3G phones expensive and bulky, the lack of 2G mobile user buy-in for 3G wireless service will also guide user choice. The Indian public being extremely price sensitive, I don't think this technology can possibly be our future.
In our country, only those technologies can work which are reasonably priced and which the common man understands,
The advantage of 3G technology over the existing 2G technology is the speed of data transfer, and the killer application
Secondly, and more important, for the technology to be of use, the licensor should keep spectrum charges to a minimum in view of the fact that the new technology shall be adopted in the rural areas too, indeed there should be a mandatory