However, 3G is not the only preferred medium for content delivery. "Cable TV is doing a fairly remarkable job of taking localized content deep into the rural market," exclaims Sridhar. He points out that when it comes to localized content in rural markets, 3G will face stiff competition from the current market leader, the cable TV content provider.

"It's the case of comparing Pizza with Masala Dosa. Both appeal to a different set of consumers and it doesn't make Masala Dosa inferior to Pizza. In states like Tamil Nadu several local studios are generating local content, which is interactive to a large extent. Can 3G beat that?" Sridhar asks.

	"Cable TV is doing fairly well in delivering local content in rural India. 3G will face stiff competition from Cable TV content providers"
	-Sridhar S, head–IT, Hutch Essar South

Watch out for Risks
The Indian government and mobile operators are cognizant of the fact that adopting 3G will entail huge capex in overhauling the telecom networks. The technological advantages of 3G will be completely negated if a high upfront fee is imposed, which can spike the cost of service and thus burdening the subscriber.

3G also requires huge bandwidth. As much as 15-20 Mhz is demanded by 3G while 2G services use a bandwidth of 30-200 KHz. Since many GSM operators in India have already launched 2.75G (EDGE), 3G will only be incremental in terms of the data speeds but will still mean a huge new investment in technology.

This coupled with the cost of deploying infrastructure, requirement of closure towers for transferring the signal and change of handsets, will escalate the price factor manifold.

Sridhar opines that the infrastructure investments could be well used in achieving the rural mobile targets on 2.5G instead of bootstrapping it to make networks 3G-a service that is of interest mainly to a few high-end users.

The Telecom Regulatory Authority of India (TRAI) has recommended auctioning radio frequencies for 3G telecom services at a reserve price of Rs 10.5 bn to companies seeking to offer nationwide high-speed Internet and streaming video. The base price for spectrum in cities like Mumbai and Delhi and Category A telecom circles is Rs 800 mn; in cities like Chennai and Kolkata and Category B circles Rs 400 mn; and in all other cities Rs 150 mn.

Taking a leaf from the European experience with 3G, it is best that the Government encourages a business model that has clicked in India. So far, it has been based on usage and/or deferred revenues. It is best to adopt the same approach for 3G as well, wherein the Government should look to earn revenues as the sector grows.

Then comes the issue of handset pricing. "Mere 10% of handsets in India are 3G compatible," informs Halder of Airtel. "Though a few handset prices are starting at Rs 4,000 onwards, there are currently no products available in the sub 4,000 range," he adds.

Other Aces up the Sleeve
It was two years ago when Union minister for communications and IT Dayanidhi Maran said: "India aims to leapfrog to fourth-generation (4G) wireless technology, skipping 3G technology as it has not been found cost-effective." Juxtapose this with the government's delay in announcing a 3G policy, and you may well start believing these words could be true.

The emerging technologies of 4G and WiMax are worthy contenders in the game.

4G is projected to provide data at the rate of 20 megabits, which is 2,000 times faster than current mobile data rates, and about 10 times faster than top transmission rates projected for 3G broadband mobile.

Indian telecom operators recognize the potential of WiMax as a suitable Broadband Wireless Access (BWA) technology option and have begun investing in both 802.16d & 802.16e deployments. The opening of 2.3 and 2.5 MHz band will further boost Mobile WiMax.

	"India should leapfrog to WiMax and LTE as new technologies are delivering"
	-Prof Arogyaswami Paulraj, CTO and Co-founder, Beceem Communications

Mooting the potential of emerging technologies, Professor Arogyaswami Paulraj, an industry veteran considered to be the father of WiMax, told Voice&Data in a recent interview that 3G does not have a strong case in India. "India should not be the ground for system builders to make some profit. India should leapfrog to WiMax and LTE as new technologies are delivering," he professed.

On the flip side, even though WiMax (802.16e) potentially can deliver much more bandwidth than 3G, it will be 2008 to 2010 before WiMax handsets appear in India. Also, will you need a WiMax handset in a market that already has 3G and everything else coming through?

The answer is probably in the air. With Intel backing WiMax and integrating WiMax chipsets into notebook PCs and handheld PC, it is expected that mobile phone makers will soon follow suit, making it more lucrative and easier for people to simply upgrade to WiMax. In addition, unless mobile operators drastically reduce the cost of 3G, WiMax will edge it out.

In Search of a Safe Bet
How much spectrum, and to whom, the mobile operators will have some sleepless nights over this, at least for a few more days to come. The spectrum issue has considerably delayed the launch of 3G services in India while others in the region, Sri Lanka and Pakistan have already set a clear roadmap.

"By delaying the imminent rollout of 3G services, policy-makers are denying Indian businesses a crucial technological enabler to compete globally," complains Sud of TTSL. "It is ironical that a progressive and global economy like India is lagging behind many of its conservative neighbors in offering 3G services."

Options like infrastructure sharing that has been mooted by TRAI can benefit the operators in watering down its cost of operation for 3G by at least 35%. Similarly initial subsidies for the 3G handsets, amiable spectrum pricing, a killer application, and rapid influx of 3G content providers can also play a vital role in pushing 3G forward.

What can make or break 3G in India-it is a question still wide open for debate. The positives of migrating to 3G need to be strengthened. Substantial investments in this direction could also result in better network efficiencies and lowered total cost of operation for the networks. At the same time, the investment decisions should be supported by a sound business model, ability to differentiate their 3G services and having a clever mix of technological choices.

The goal of achieving 180-200 million mobile subscribers by 2007 is not unachievable. But reaching the untapped 90% of India's population is a tough ask. 3G or not, the momentum will not slow down.

Malovika Rao,
with inputs from Baburajan K
malovikar@cybermedia.co.in