Emerging Areas
India is set to become one of the early adopters of new wireless technologies as local operators have no legacy infrastructure issues. The next logical step in the evolution of wireless technology adoption will be 3G/HSPA due to the tremendous success of mobile telephony. 3G/HSPA is an ideal technology for both voice and data and it efficiently uses spectrum, a scare commodity for Indians.

There are very few fixed WiMax deployments by various operators. However, a clear spectrum allocation policy is awaited for mobile WiMax. The success of WiMax will strongly depend on two factors. The first factor is the adaptation of standard WiMax band and we believe the 3.3-3.8GHz (European WiMax band) will be the strongest global WiMax band, which most countries are likely to adopt and the same band is likely to be adopted in India as well. Secondly, it is important for WiMax to support mobility.

However, the technologies being evaluated are WCDMA/HSPA, CDMA-EVDO, WiMax, and Wi-Fi mesh. All these technologies promise very high bandwidth speeds, thereby enabling applications like video streaming, VoD, distance learning, music downloads, etc. In the next few years, we will see 3G/HSPA, CDMA EVDO, and WiMax (in that order) emerge as the three major wireless technologies that will co-exist and complement each other. Most operators will use these three, depending on their business model and strategy. The main decision point will be which technology offers the complete eco-system in terms of superior technology, spectral efficiency, low cost/bit, flexibility in spectrum allocation, scalability, device/terminal availability, and low TCO. These were the factors where GSM scored heavily against rival technologies.

2G: Increasing subscriber base would lead to expansion of 2G networks. Following the success of ring-tone and caller-tune services, 2G networks would be enhanced to support more value added services. Tejas Networks provides SDH equipment that forms the backbone of the optical transmission in 2G networks. It is looking to design more compact and dense products that enable operators to provide more services from a smaller footprint.

3G and WiMax: The rapidly increasing demand for data services would drive 3G deployments, particularly in metros. The spectral efficiency of 3G networks is an added incentive for operators. WiMax rollouts are expected in rural areas as well as metros, as a substitute for DSL-based broadband services.

IPTV: India is witnessing its first few IPTV deployments. IPTV increases the range of services that can be offered along with the conventional video channels.

DSL-Broadband: While broadband in India started off as a 256 kbps service, 2 Mbps services have started seeing uptake in several areas. This increase in bandwidth would not only drive network expansion, but would also force operators to look for solutions that enable operators to optimally use bandwidth across all its users.

Regulatory Issues
The reforms at the beginning of this century led to the opening of the telecom market in India. The country has witnessed a phenomenal growth in the number of subscribers due to these reforms. As a result of the competition created by opening up of the space, India today boasts of offering one of the lowest call rates in the world.

However, the exciting growth that the telecommunication industry has witnessed in metros needs to be emulated in rural areas as well. With this as the objective, the government initiated the USO Fund. All the telecom operators contribute 5% of their annual revenues toward the fund. The fund had approximately $1.5 bn in financial resources, and is expected to fund network expansion in rural areas.

The 3G spectrum allocation appears to be eagerly awaited by operators. However, 3G networks expansion is currently underway and the networks are expected to be in place by the time the regulatory issues are sorted out.

India Vs China
India is also experiencing hyper growth on the lines of the Chinese market. In fact, India is adding more subscribers every month than China for the last 7-8 months. In fact, an 8 mn monthly subscription addition in India is unprecedented.

In fact, together India and China will account for 30% of all mobile users by 2010 as per forecasts. Today, China is already the world's largest market and India will move to the second position by 2010, surpassing the US. However, the average revenue generated per user in the two nations is expected to remain among the lowest in the world.

In terms of teledensity, only 30% people in China have mobile phones, and just 10% of India's population. China's population is estimated to be 1.3 bn and India's 1.1 bn. However, mobile operators will have to move outside their core urban markets and offer services to rural users to take full advantage of the untapped potential there. China's rural population is estimated at close to 60% of the total. The same holds true for India also. Tailoring mobile services, tariffs, and handsets specifically for customers in these areas can help operators achieve subscriber growth in rural regions. However, moving into rural areas will require heavy investment to extend network coverage.

Access to the Internet for information, entertainment, and video services, as well as growing demand for a host of data applications will drive growth. Operators too are eager to move customers up the value chain by delivering such data and video services in addition to voice, thus opening up new revenue opportunities for themselves. Spectrum availability, investment-friendly business environment for global operators, equitable and transparent regulation and policies, highly competitive technologies that facilitate affordable services by minimizing operator's capital and operating expenses and affordable end-user devices will be some of the key growth drivers.

Operators, both present and new entrants, are likely to make significant capex investments for next 3-4 years to sustain net capacity additions of 80-100 mn subscriptions. From the current estimates, we could expect to see $20-25 bn being invested on network infrastructure in the coming 3-4 years by the industry as a whole. In addition to cellular, it's likely that sizeable investments will be made in building wireless broadband infrastructure using WiMax and other standards based 3G technologies. Timely and adequate allocation of spectrum will be the most crucial factor determining the future of these new technologies in India.

Baburajan K
baburajank@cybermedia.co.in