Issues and Concerns
Limitations in availability of spectrum have prevented many operators from expanding their operations to more circles, delayed the introduction of 3G services in India, inevitably leading to deterioration in quality of service, especially in metros. BSNL plans to deploy WCDMA with HSDPA in large cities. Most operators have carried out trials with 3G systems. The operators in India are geared up to roll out 3G. MTNL, for example, has already placed orders for 3G equipment. The policy framework and timeline for 3G licensing is awaited from the government. The required spectrum in the internationally agreed 2.1 GHz band is not yet vacated by defence users, which has been pending for almost two years. There is a discussion about the release of at least 40 MHz spectrum by July 2007. GSM operators resist any proposals to allow 2G CDMA systems to operate within this band (around 1900 MHz) on the grounds of ruinous interference, since the 2.1 GHz band is the globally harmonized band for 3G systems and services. No other country has permitted CDMA systems to operate in 3G spectrum in a so-called "mixed band" arrangement. India should adopt the same principle and stay away from a mixed-band and, in the interests of affordability stemming from global economies of scale, should support the solutions that are endorsed by the international standardization bodies.

Licensing policy and regulation must support the introduction of 3G, for example, infrastructure sharing as recommended by TRAI, will help to reduce costs.

Demands
Rural India is where the fruits of telecom liberalization have still not reached the masses. In a market where margins are much lower, setting up telecom infrastructure in remote corners is not seen as lucrative, and most operators focus on subscriber acquisition in urban and semi urban areas. The next thrust is to grow current rural teledensity from 2.5% to 25%. The growth in the economy is creating a lifestyle change. The consumer in India is developing a strong appetite for goods and services, which is further stimulating demand for high-end devices as well.

Growth drivers
Further impetus is expected from the introduction of sub-Rs 2,000 color handsets, sub-Rs 1,000 monochrome handsets, and the anticipated 3G rollout toward the end of the year, coupled with an expansion in value-added services (VAS). The possibility of allowing operators to share active infrastructures like antennas, feeder cables, node B's, backhaul, and transmission equipment, enables operators to share Capex and Opex spending. The recent decision by TRAI to reduce access deficit charge (ADC) will also stimulate growth. The introduction of 3G is dependent on content and applications. Music, video, cricket, ring back video and video sharing may be the killer applications in India.

New Initiatives
GSA represents the leading GSM/3G suppliers. For the next financial year, all major operators have significantly increased Capex spending plans which, at a combined $10 bn, are double that of FY '06.

Will investment plans announced by leading companies take off, it is a very pertinent question here. This is very likely, as there is a tremendous growth potential in the Indian market. Increasing demand for VAS will lead to higher revenues and better RoI's for operators. In addition, operators are finding new ways to reduce Capex and Opex. Managed services is one area where, for example, Ericsson and Nokia Siemens Networks are providing managed services to Bharti Airtel and Hutchison Essar respectively. There is also development of shared passive infrastructure. Sharing of towers between operators delivers huge cost savings. These measures should mean that the huge investments by operators would pay off.

However, possible factors that can slow down growth relate to economic growth. The Indian economy is expanding rapidly with GDP growth averaging 8-9%. There could be overheating of the economy, creating a gap between supply and demand, a situation that the government would seek to avoid.

Our vision for India is to deliver on its massive potential for all citizens, with 3G enabled by WCDMA-HSDPA being the next step on the roadmap for urban and rural areas.

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