?The next wave of growth will be purely data driven?
Next-generation technologies, 3G and broadband wireless access (BWA) are expected to be the key drivers for the next phase of growth in the telecom sector. Bharti Airtel, which has already garnered 7 million 3G subscribers and is looking to launch BWA services in early 2012, is aiming to capitalise on these services. Jagbir Singh, director, network services group, Bharti Airtel, talks about the emerging 3G and BWA ecosystem, the status of network rollouts, the strategies adopted by the company and the key factors for the success of these services. Excerpts…
What is the technology road map for the Indian telecom sector?
For the past 10-15 years, growth in the Indian telecom sector has been voice oriented but now, the next wave of growth will be purely data driven. This by no means conveys that the 2G platform will lose its relevance. With the demand for voice services still on the rise, 2G is here to stay for another 5-10 years. However, one cannot ignore the huge demand for data-oriented services, which cannot be met by the 2G technology platform alone. At present, these data needs are being met by 3G and going forward, BWA too will be instrumental in accommodating this growing demand. There is huge potential for data services in the Indian market, with right accessibility, good experience and growth in the smartphone market contributing to it. 3G, along with long term evolution (LTE), will be the ultimate vehicle to provide a thrust to high speed data.
How is the 3G and BWA ecosystem emerging in India?
As far as 3G is concerned, the ecosystem is developing well in India. Other countries took a very long time, four-five years, to develop their 3G ecosystem. India, on the other hand, conducted spectrum auctions last year and within a year of allocation, service providers have been able to deploy the technology and launch services in almost all the circles for which they won licences. Also, the approach adopted by Indian companies to increase 3G uptake has been very different. While other countries offered bundled handsets, thereby forcing a customer to use 3G services when buying a handset, India was fortunate to have entered the market at a time when handsets were already available at affordable prices. Needless to say, we expect the growth of 3G services to be much faster in India as compared to other countries.
What is your opinion on the speed of 3G rollouts by operators?
Bharti Airtel has rolled out 3G services at a satisfactory pace. In a scenario where no one has a pan-Indian licence, the operators have done a good job of rolling out services well in time. However, the rollout will not be fruitful unless 3G-enabled handsets are available in the market. So, 3G market growth is partly dependent on the availability of handsets. Declining handset prices will slowly drive the success of 3G in India.
Is the current spectrum of 5 MHz per circle per operator sufficient to support this growth?
The data plans offered by various service providers are very well planned as none of them is offering unlimited data usage options to avoid choking of their bandwidth. Besides, the pricing for 3G services is at a premium, considering the better experience that a subscriber enjoys as compared to 2G. However, as far as sustaining the growth of the huge data demand through one carrier is concerned, the answer would be ?no?. The industry needs at least two-four carriers to manage the data demand in every circle and certainly more spectrum.
What strategies does the company intend to adopt to offload data once mobile data traffic builds up?
At present, data is moving from GPRS to 3G. High-ARPU customers, who are already using GPRS on 2G, are the first set of users moving towards 3G services. The second set consists of those who are keen on exploring the applications. Once huge traffic builds up, it will be time to offload data from 3G to either Wi-Fi or femtocell. It could very well be towards the high speed dongle market or the LTE platform. Bharti Airtel has all offloading plans in place for heavy data users to move from 3G to LTE or Wi-Fi.
What is the current state of the backhaul network in the Indian telecom space?
For high speed data, especially for 3G and LTE, there is no option but to rely on fibre and optic network. One issue is that the operators, except Bharat Sanchar Nigam Limited, do not have much fibre in the ground. At the same time, optic fibre is going to take a long time to take off as there are issues related to right-of-way (RoW). Currently, backhaul is a major challenge for the industry. Operators are seeking government support in this regard. High speed data can be provided to each consumer only when there is a strong fibre and optic network in place.
Bharti Airtel, because of its fixed line services, has extensive fibre network in the ground. We deploy this network wherever we obtain RoW from the government. We are also upgrading our infrastructure to a time division multiplexing-based microwave format, at least in areas where we are launching 3G services.
What does it take to upgrade a 2G network to 3G and eventually to 4G?
The transition from 2G to 3G is easy as most of the hardware remains the same. Depending on the type of hardware deployed by an operator and its age is, one can either plug and play on the same 2G cabinet or have a separate cabinet on top of the existing one. Besides, all operators are sharing the sites, antennas and cables for both 2G and 3G. Bharti Airtel is using multimode antennas, which will support 3G and going forward, even 4G services based on the LTE platform.
What has been Airtel?s strategy on the network rollout front?
Bharti Airtel has covered all the major cities where it has licences and we will not face any limitation in deploying more sites. However, what is important in the current scenario is the availability of 3G handsets in the market. Unless these are available, putting up a site in a given area will yield no benefit.
What percentage of 2G sites is likely to be converted into 3G?
Since 2G spectrum was available in a limited quantity for every site, operators had to build some sites just to achieve a certain capacity level. So, every 2G site does not cater purely to coverage requirements but also to capacity enhancement. This is why every 3G site cannot be replicated on a 2G site as many 2G sites are purely handling capacity.
How do LTE and Wi-Max vary in terms of deployment costs?
Logically, LTE would be cheaper because it would drive volumes. While Europe and the US use an LTE-FDD (frequency division duplex) platform, LTE-TDD (time division duplex) is used in India. But both platforms use the same chipset, which means that international roaming on 3G would be possible once the technology gets deployed in the country.
Has the late launch of 3G as compared to other countries helped in bringing down rollout costs?
The costs would have definitely been 300-400 times higher had we launched it during the initial years, like the other countries. So, in a way, we are lucky to have introduced these services at a time when the technology has matured, and 3G equipment and handsets are available as well as affordable.
What will be the key factor driving 3G uptake in the country?
The affordability and availability of compatible handsets in all pockets of the country will be the single biggest contributor to 3G service growth. The current handsets are available on technology platforms like R99, HSPA and HSPA+. However, HSPA+ handsets are expensive and comprise just 5 per cent of the total handsets available in the market. Different technology platforms offer different speeds with services, with HSPA+ services being the fastest. Hence, affordability of high-end handsets will help operators in providing better applications and services to consumers.
