The world has come a long way since NTT DoCoMo launched its WCDMA network in
2001. According to the 3G market forecast by an international market research
agency Research and Markets, there were a total of 614 mn 3G subscribers
globally at the end of 2007, and the number was projected to grow at a CAGR of
34% in the near future.
Given the potential of this technology, the recent announcement of the 3G
guidelines in India has come as a huge relief both to the consumer and the
telecom industry. The appetite for value added services has always been huge in
India and it is only set to soar higher with this announcement. As per estimates
from Gartner, VAS is expected to account for around 22% of the total revenue for
mobile operators by 2010.
While the debate between WiMax and 3G is still on, the telecom industry is
welcoming the introduction of 3G.
The penetration level of 3G, however, is still uncertain. The new technology
comes with costs attached, and while the upper-middle class business
professionals might be able to utilize these services, a major part of our
population is still far from the levels of affordability that these services ask
for.
With a per capita income (national average) of as low as $950 per annum (Rs
38,000 approximately), access to these technologies shall remain for the select
few. Rs 8,000, the minimum amount required for purchasing a 3G handset, is a
luxury that most can't afford. Also, other gadgets such as laptops, which can
use 3G-run broadband access, are yet to make inroads among the large population.
Bharat Bhatia, regional director, India, Saarc, and South East Asia, Motorola
Global Government Affairs and Public Policy, acknowledges the prospects of
limited penetration of 3G due to the price sensitivity of our nation, but is
also hopeful that these services will soon become affordable for a large chunk
of our population. He adds, “New technologies such as WiMax shall offer the most
cost-efficient way of connecting people over large distances, particularly for
offering an inexpensive way for rural India to connect to the Internet and thus
bridge the digital divide.”
Even as most handset manufacturers see a tremendous growth opportunity in the
realm of 3G-enabled mobiles, it is certain that price will play a key role in
deciding the fate of the new technology. To tackle this concern, mobile phone
manufacturers are making efforts to come up with phones as cheap as Rs 3,500,
against the currently available minimum price of over Rs 8,000. Mobile makers in
India are also expecting prices to dip, and thus are contemplating aggressive
plans to come up with affordable handsets in this category.
Analysts say that 3G first needs to be popular with the middle class segment
if it is to bring the much talked about “broadband revolution”. For such kind of
change to take place, the price of the handset and the services will play a
crucial role.
About 15-20% mobile phones in India are already 3G-enabled, but they have to
be made affordable. The availability of reasonably priced phones has already
made many experts rework their estimates of the size of the 3G market to grow
from the present 40-70 mn to 100-150 mn by 2012.
The 3G Line-up
South Korean electronics giant, LG, which already has the KU250 3G phone
model positioned as one of the cheapest phones in this category in the world,
had reporetedly anounced earlier to bring the adoptation of this model in India
for around $100.
Also, Chinese telecom giant Huawei Technologies, is in talks with leading
Indian operators of GSM mobile services to sell a 3G entry-level phone within
$80-100. The company feels that bulk deals with operators would push down prices
of 3G handsets further. It has already supplied these basic 3G phones to
operators in the Hong Kong market.
Motorola launched its 3G Motorazr V9 Ferrari in India last month, priced at
Rs 21,840. With the guidelines issued last week for 3G, the manufacturer is
planning to bring in more 3G handsets in the market. It also expects prices to
fall dramatically to Rs 4,000-5,000.
Recently, Spice launched its first Indian 3G-enabled device in technical
collaboration with Qualcomm, which is working on smart phones that cost Rs
10,000 and a PC-like Internet access device priced at around Rs 8,000. Qualcomm
is also approaching Indian mobile operators to launch carrier branded 3G mobile
handsets. The company is in talks with Indian GSM operators, who will launch 3G
services bundled with their own branded handsets. Operators such as Vodafone and
Hutchison have their own handset brands for 3G services in Europe.
Nokia, which has more than twenty-five 3G enabled handsets in the market is
also working on the affordability issue.
Meanwhile, the launch of the all new and much-hyped Apple 3G iPhone couldn't
have come at a better time. Not only is it coming with a lot of exciting
features (at a cost of course), but is also generating awareness about this new
technology. It is the first ever phone which is being publicized with 3G as its
primary feature unlike any other handset providing the facility. In fact, a
majority of people possessing a handset from the hugely popular Nokia N-Series
are little aware of the 3G functions in their phone.
Bharti Airtel and Vodafone, who are jointly launching the iPhone in India,
are also optimistic about the future of 3G in India. Airtel has received around
2.5 mn inquiries for the iPhone 3G, since its announcement. Out of which, about
one million inquiries have been made over the Internet alone. Airtel expects a
30% conversion rate over these numbers, which is very encouraging. These service
providers are also enthusiastic about the prospects of Blackberry services
(provided they get the license) once 3G is functional in the country.
Information Crisis
There isn't much awareness about the 3G features in the currently available
handsets in the market though, 3G handsets have been available in India for
quite some time now. A lot of our handset manufacturers have already proved to
be futuristic in this regard. 3G enabled handsets from Nokia, Sony Ericsson, and
a few others have been available in the market since over a year now, although
awareness among consumers is still low. Blackberry services are already capable
of supporting the 3G features, again a fact lesser known.
Devindar Kishore, director, Marketing, Nokia says, “As the market leader,
Nokia has been at the forefront of introducing technologies that have
revolutionized the way mobility is perceived. It is for this reason that most of
our devices not only support 3G but other platforms like WCDMA, HSPA, and Wi-Fi
as well. Strategically, our investment into new technologies is aimed at being
future ready to cater to the needs of the market.”
3G, however, is expected to propel the growth of the telecom industry by
offering superior quality of services, and allowing a larger pool of people to
benefit from mobility. On the consumer front as well, given the rate at which
the Indian mobile industry and the need for on demand content is growing, higher
data speed and implementation of more advanced networks will definitely give it
a major boost.
“The industry is aware of the information crisis amongst the consumer
regarding 3G,” says Anil Arora, group head, GSM, LG. “India is a developing
market. In contrast, European markets are much more mature. The major roadblock
that we foresee is customers' awareness and acceptability of 3G. First time
users may not understand the service and hence not utilize the same to its
optimum.”
Thus, while the handset manufacturers are busy churning out 3G-enabled
handsets, and service providers are preparing for the big spectrum auction, the
consumer is impatiently waiting for the services to roll out so that he can
enjoy enhanced features like video-conferencing, MMS, e-mail, video games, and
live information services on his suave 3G handset. And well, these handsets are
only set to improve, in terms of quality and price. Meanwhile, for those who
can't wait, we have a chart below to prepare you well for the big 3G Invasion!
Mehak Chawla, Heena Jhingan and Vishal Mathur
heenaj@cybermedia.co.in
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