3G More Idle than Ideal

Operators Speak on 3G

"We will be dedicating 25% of 60-65 mn lines for 3G in first year, 50% in second year and 75% in third year"	"Our initial focus would be to offer the present services in a better way followed by unique 3G services"	"The opportunity in India is more about rural and less about 3G"	"Once 3G comes into effect, it will lead to higher ARPUs which, in turn, will empower us to increase investments in our businesses"
-AK Sinha, CMD, BSNL	-Shankar Halder chief, Strategy & Governance, Bharti Airtel	-Arun Sarin, CEO, Vodafone	-Ashok Sud, president, Corporate Affairs, Tata Teleservices (TTSL)
BSNL: The sixth largest telecom operator in the world, BSNL is planning to deploy 3G network in 250 top towns in India in the first year of operations. The focus would be on high-speed Internet, followed by voice and video-on-demand. It has already announced its plans to invest Rs 28,000 cr in mobile services and considerable portion will be earmarked for 3G	Bharti Airtel: The operator has completed trial runs and plans to launch 3G services in 15 towns in the initial part of phase 1.The indoor trials undertaken by Bharti have been encouraging showing improvement of voice, data and video over 3G network.	Hutch: Following the recent acquisition of Hutch Essar by Vodafone, the 3G focus seems to have diluted. Despite the international prowess in 3G, Arun Sarin, CEO, Vodafone has made it abundantly clear that 3G does not rise to the top, at least for India. This indicates that the new outfit is looking at boosting GSM and 2G in rural areas rather than investing in 3G.	Tata Teleservices: Having pioneered the CDMA 3G1x technology platform in India, Tata claims to be 3G ready. Following the Policy announcement, TTSL will be ready to rollout 3G in seven cities. For its mobile services, the operator plans to invest Rs 3,000-3,500 cr.

Reliance Communications: Having presence in both CDMA and GSM networks, Reliance Communications is actively looking at launching 3G services and is conducting 3G trials in select cities. MTNL: Although the operator has presence only in Mumbai and Delhi, MTNL has decided to set up 2 mn lines each for Delhi and Mumbai in two phases and the installation is in process. MTNL is looking at 250,000 3G users in phase one and 500,000 3G subscribers in phase two of the project. MTNL is looking for 5MHz spectrum in each phase of 3G rolls out.		Aircel: Early this year, Aircel became the first Indian mobile telephony company to have successfully tested 3G services in Chennai. Aircel is looking at launching 3G services in metros as a way of entering the market there. Although the operator plans to invest $400 mn over the next 18 months, to expand current GSM operations, it did not reveal the breakup for 3G investments. Idea Cellular: Idea Cellular plans will be 3G ready soon and plans to roll out 3G in top cities.

Can 3G go Rural?
Of the overall 16% tele-density, rural tele-density is a dismal 2% in India, and the Government is keen on leaving no stone unturned to reach the solution. Whether or not 3G can provide the answer it is looking for, is questionable.

The 3G technology has the potential to drive rural mobility. However, 3G operators will have difficulty chalking out a business case for making big masts on rural areas, with no idea of how they'll be getting money back.

A few key factors-handset pricing, business model strategy and rural content availability-will be decisive in seeing 3G finally getting into the farmer's pocket.

The good news is that the 3G community has set the magical $100 figure as the benchmark for 3G handset costs. However, an affordable handset may mean compromising on the 3G rich feature sets. A watered down version of the 3G handset will completely go against the initial enthusiasm of pushing 3G in the rural market.

3G will entail huge capex in overhauling the telecom networks

Mere low cost handsets will not be sufficient for rural consumers to start talking on 3G; it will need large-scale localized content to enable m-commerce. As of now, m-commerce is yet to go upcountry on 2G and 2.5G, so why think of 3G content?

Ashok Sud feels 3G can drive just the content that rural subscriber needs. "The key application in 3G networks, especially in rural and semi-urban areas, will be basic broadband access." He visualizes key applications like e-learning, telemedicine and virtual marketplaces getting into the pocket of the rural subscriber via 3G technology.