As 4G services continue creating a buzz in India, it is not only operators but also other stakeholders across the 4G value chain that are looking towards stronger business prospects and growth. Handset players, technology vendors and application developers also have a critical role to play in bringing users on board and shaping the country’s 4G ecosystem.
The handset market has already started reaping the benefits of 4G, which was one of the key drivers of smartphone sales in India in 2015. As per market reports, one out of three smartphones shipped to India during the quarter ended September 2015 was 4G enabled. During the fourth quarter of 2015, 4G smartphone shipments surpassed the 3G volumes for the first time in the Indian smartphone industry. As per Google, there was a 200 per cent increase in searches for 4G-enabled devices during 2015, while searches for 3G-enabled devices dropped by 35 per cent during the same period.
Even technology vendors like Eric- sson, Nokia Networks and Huawei are betting big on India’s flourishing 4G market. With multi-million-dollar deals being added to their order books during 2015, they are optimistic about 4G driving growth in 2016 as well.
The applications segment is the final important link in the 4G value chain that will drive the uptake of these services. While network and infrastructure can improve access to 4G, the real uptake will be driven by relevant applications as they will compel more users to join the 4G bandwagon. Telepresence, telemedicine, virtual navigation, mobile/portable gaming and long term evolution (LTE) broadcasts are some 4G applications that are gaining global traction. They are expected to find many takers in India, along with high speed conventional applications for video streaming and music downloads.
Handset market
Most of the handset players in the market were able to identify the need for 4G smartphones well ahead of the commercial service roll-outs and are capitalising on this opportunity. This was evident during the quarter ended September 2015, when 4G-enabled device shipments recorded a threefold increase over the previous quarter. In addition, 4G handset shipments increased to 13.9 million units, accounting for more than half of the smartphone market in the fourth quarter of 2015. During 2015, 60 per cent of shipments in the industry were 4G devices.
Samsung, one of India’s biggest 4G players, has been witnessing increased demand for its LTE models priced below $150, such as the Galaxy Grand Prime and Galaxy J2. Samsung launched 18 devices on 4G technology in 2015 and has already launched two new devices in 2016. Lenovo’s 4G portfolio has also been a great success in the Indian market, with devices like the K3 Note, Moto G (3rd Gen), Moto X Play, Moto E (2nd Gen), A6000 and A6000 Plus recording a rise in sales during 2015.
Local player Micromax has been able to garner a significant share of the 4G pie. The company now plans to convert all its popular Canvas series to 4G and Canvas Fire 4G is the first of them to be launched. It might eventually move to manufacturing only 3G/4G devices. Another domestic player, Lava has benefited from 4G by gaining a share in the online channel through its Xolo series.
Affordable pricing is one of the key factors driving the 4G handset market in India. There are hardly any significant price differences between 3G and 4G devices. Moreover, as a result of the astounding growth in applications and over-the-top (OTT) services, users are looking for technology platforms that support these high speed services.
Smartphones grew phenomenally in 2015, a trend that will gain further momentum as operators expand their 4G reach. The year 2016 has a lot in store for handset vendors, who are expected to dedicate a significant share of their manufacturing capacities towards 4G handset production.
Vendors
The recent 4G roll-outs have been possible due to the trusted partnerships between operators and global vendors for building 4G architecture. During 2015, several contracts were signed between technology/network vendors and operators to enhance the coverage and reach of 4G services in the country. Taking a step forward, operators have now started partnering with vendors to explore the provision of voice over LTE services through their networks.
In October 2015, Huawei won a contract from Vodafone India for the supply of base stations and other equipment for the latter’s 4G network in the Karnataka and Kerala circles, where it launched services at the end of December 2015. Prior to this, Huawei had won 4G deals from Bharti Airtel for the Delhi, Karnataka and Tamil Nadu service areas. In the Karnataka and Tamil Nadu circles, Huawei has deployed an LTE-frequency division duplex (FDD)-based network for Airtel in the 1800 MHz band and an LTE-time division duplex-based 4G network in the 2300 MHz band in the Delhi circle.
Meanwhile, in January 2016, Nokia secured a three-year contract for 4G network deployment from Vodafone for three of its most lucrative circles: Mumbai, Kolkata and Punjab.
In February 2016, Idea Cellular selected Ericsson to deploy its 4G network across select circles. The contract covers equipment, software and a range of professional services including project management, systems integration and supervisory managed services for 4G/ LTE for a period of two years. The agreement also includes the transformation of Idea Cellular’s existing mobile radio access and core network infrastructure across nine circles in 2G and five circles in 3G, enabling it to deliver superior mobile broadband experience, including faster mobile data speeds and better smartphone performance.
Ericsson has also received a four-year 4G network roll-out contract from Bharti Airtel for the Delhi circle. This is Ericsson’s first 4G network using LTE-FDD technology in Delhi. Apart from Delhi, Ericsson will deploy LTE in four other circles. As part of the contract, it will supply, install and manage services.
Application developers and OTT players
The introduction of 4G services has opened up new opportunities for India’s mobile applications market. Smartphone users typically have around 20 applications on their phones, which they keep replacing when better ones are introduced in the market. The faster speeds promised by 4G will enable the innovation and use of a host of mobile applications that offer services related to interactive games, video conferencing and video streaming, location-based services, transport and banking. However, their localisation will be an important factor in determining their success. Application developers also face a major hurdle in terms of monetisation, as making Indian customers pay for subscribing to applications is not easy.
Several applications can benefit from the widespread deployment of 4G LTE. High speed LTE networks will support advanced navigation applications, thereby providing a high degree of location accuracy, rapid response to location requests, support to a large number of user locations with improved scalability, and timely location updates. Meanwhile, with the help of telepresence solutions, users can create virtual face-to-face environments over a telecom network. This has increased communication speeds and reduced costs. With 4G technology, video meetings can take place anywhere and everywhere on demand, irrespective of the location of participants.
Apart from enhancing communication between humans and between humans and machines, 4G network roll-outs will enable efficient machine-to-machine (M2M) connections. This will facilitate synchronisation between home devices, remote surveillance systems and security systems. The low latency of 4G networks will improve M2M interactions and enable information exchange on time-critical applications like emergency systems, traffic control and financial systems to be carried out at a quicker pace. Automotive telematics is another application being seriously considered by developers. The automotive industry can benefit immensely from the high speed mobile broadband connectivity of LTE networks as it will be a significant step towards realising the vision of driverless cars.
4G has finally arrived in the Indian market, and with mobile data traffic expected to reach
massive numbers in the next few years, LTE will be a game changer for all stakeholders, including operators, device vendors, application developers and OTT players.
The way ahead
4G has finally arrived in the Indian market, and with mobile data traffic expected to reach massive numbers in the next few years, LTE will be a game changer for all the stakeholders in the Indian 4G ecosystem, including telecom operators, device vendors, application developers as well as OTT players.
