With 3G spectrum auctions on the anvil, the issue of technological innovations and improvisations has become critical. At present, 2G operators face issues relating to call drops and low quality of service. They also face a huge pent-up demand for voice-based services. In addition, India has chosen a slightly different model for 3G compared to the rest of the world. While elsewhere 15-20 MHz spectrum has been allocated for the rollout of 3G services, India will have only 5 MHz. Therefore, Indian operators are likely to focus their attention primarily on using the allocated 3G spectrum to fill the demand for voice capacity.
Promise of 3G – Technology providers’ perspective
In terms of data applications, people are increasingly moving towards high speed internet access, tele-working, ecommerce and video applications. Globally, there has been an exponential growth in data traffic in the past two-three years. This is mainly attributed to the upgradation of networks to high-speed packet access (HSPA) for extra speed.With this, data usage as well as data revenue for operators have gone up. Therefore, operators in India will need to upgrade their networks to HSPA prior to launching 3G-enabled devices to ensure that connectivity is provided in the metros followed by the rural areas.
In the near future, devices such as net-books and smartbooks that are HSPAenabled will come up and will be extremely affordable. This would translate into monetisation for operators and the entire ecosystem.
Besides 3G spectrum auctions, Wi-Max spectrum will also be allocated in the 2.3 GHz band that will offer complete, high speed data connectivity. This will take some load off 3G in terms of video and other data applications, enabling operAtors to use this technology primarily for increasing the voice capacity and dealing with the spectrum crunch.
Therefore, going forward, operators are likely to opt for technologies that will allow a high degree of voice calls, and also high throughput of data and data downloads and uploads to deal with rising demand on both the voice and data front.This will provide an opportunity for India to leapfrog technology, that is, instead of going in for 3G, the country can move on directly to a 4G technology such as long term evolution, which offers better voice capacity and higher spectrum efficiency.
Future VAS potential
The launch of 3G services offers huge potential to the value-added services (VAS) industry. Operators currently derive a mere 5-7 per cent of revenues from VAS, and this excludes SMS.However, in countries where 3G has been launched, these revenues have experienced a phenomenal increase. In the US, companies such as Verizon Communications and AT&T garnered about 25 per cent of their overall revenues from their VAS offerings following the rollout of 3G. In India too, it is not unrealistic to expect that 15 per cent of the overall revenues would come from VAS offerings.
SMS tops the list of services that show huge potential for revenue generation in the country, which has always been a major user of messaging services. According to a mobile broadband survey conducted by Nokia Siemens Networks (NSN) in 2008, Indian subscribers showed a preference for applications such as net browsing, emailing, and downloading music. However, with 3G, operators will be able to offer a bouquet of applications on their portal, giving users a greater choice.
Some of the applications likely to gain traction in the future are video calls, video messages and data applications such as internet access, e-banking, money transfers and e-governance. Video messaging offers a big promise as language continues to be a barrier in many parts of the country. However, video calling will also have to face issues related to privacy. The Indian government is working towards expanding rural coverage which will drive a lot of data demand, mainly for applicAtions related to agriculture, health, fishery, etc. Other 3G applications that show a potential include location-based services, social networking and user-generated content. With the necessary connectivity in place, video surveillance and security of high speed networks may also become a line of business in itself.
Implications for wireless infrastructure
Infrastructure development as well as passive sharing is already a booming sector. India is rolling out close to 300 base transceiver stations (BTSs) every year. Following the launch of 3G, this trend will continue to grow. If 3G services are rolled out in a selective manner with the initial launch in the metros followed by Category A cities, the network gear will have to be 3G-enabled. Bharat Sanchar Nigam Limited has already taken the lead in 3G rollouts, penetrating about 700 cities; the private operators will surely want to catch up. The number of BTSs rolled out is expected to be as high as 100,000 a year in two years’ time.
Active sharing of technologies is already in place, with the government having allowed spectrum sharing as well. However, since there is a spectrum crunch, even if operators want to share spectrum, the savings they will accrue will be way smaller than sharing passive infrastructure.
Summing up, the road ahead for technology providers seems extremely bright with newer technologies such as 3G and Wi-Max coming into the country.
Bharat Bhatia, regional director for governmental affairs, Asia, Motorola India; Bimal Dayal, vice-president and country manager for business development, Qualcomm India and South Asia; and Manoj Gumani, global head, GSMrelated product management and cost optimisation programmes, NSN
