The Wireless (R)evolution in India

Wireless companies, have often tapped into resources in India to leverage talent found in the country?s growing wireless technology sector. The growth in the industry is evident in India?s auction of 3G spectrum in January 2010, which was a major step toward a wider, more advanced range of wireless services throughout the country. But it also was just the first of many steps that India?s mobile operators will have to take over the next several years.

Each step directly affects an operator?s bottom line and competitive position. A prime example is voice. Although wireless data usage has skyrocketed in India and most other countries, voice is still wireless? ?killer app? in terms of both the percentage of revenue generated and the reason why consumers and businesses sign up for wireless in the first place.

For India operators planning to deploy 4G technologies ? LTE or WiMAX ? over the next few years, the ability to support voice will be key from both a revenue and competitive standpoint. Otherwise, they?ll languish as niche plays, such as providing an alternative to fixed broadband, instead of capturing a share of the mobile voice market, too.

Data-only operators also risk missing out on customers who prefer to get mobile voice and mobile data from the same operator, such as to qualify for a multi-service discount. Those customers are particularly attractive because the more services that a customer buys from a single operator, the less likely they are to churn ? something that?s becoming easier to do, thanks to mobile number portability. In fact, 18 percent of Indian mobile users say they would churn if they can keep their number, according to an August 2009 survey by The Nielsen Company.

Leveraging the Past

Some 4G operators are Greenfield, but many are incumbents that have 2G or 3G networks. For the latter types, one solution is to provide customers with 4G handsets that switch to 2G or 3G for voice. But that?s an expensive solution, making it a poor choice for highly price-sensitive markets such as India and simultaneous use of voice and data services is eliminated.

For incumbents, a smarter, more cost-effective solution is to leverage their existing infrastructure to extend voice ? as well as other popular legacy services, such as SMS ? to their 4G networks. For example, vendors such as Acme Packet and Mavenir Systems have developed platforms that let operators re-use their Mobile Switching Centers (MSCs), Intelligent
network (IN) for prepaid and ring-back tones and other value added services, and Short Message Service (SMS) infrastructure to deliver services across all of their networks.

This approach has several benefits:

? It significantly reduces the operator?s CapEx and OpEx, improving its ability to price its services competitively yet profitably. This approach takes advantage of existing customer care, billing, service provisioning, and management infrastructure that is a significant investment in any carrier?s network. It guarantees service parity from day one which reduces the customer complaints and increases their satisfaction.

? The operator now has the flexibility to offer services that span a variety of networks, such as those centered around fixed-mobile convergence and IP Multimedia Subsystem (IMS).

? The operator now has a much larger pool of potential customers, instead of just those looking for a data-only provider.

The Rich Communication Suite

Regardless of whether they?re launching 3G or looking ahead to 4G, Indian mobile operators also should consider Rich Communication Suite (RCS), which makes it easier to develop and deploy IMS services, including ones that span wired and wireless networks. By the end of 2010, 1.3 million consumers will use RCS services, according to Infonetics Research. Virtually all of them will be in the Asia-Pacific and EMEA regions, with the majority in EMEA, the firm predicts.

Developed by the GSM Association in conjunction with more than 60 vendors and operators, RCS debuted commercially in July 2009 on three South Korean networks. Those deployments show how RCS benefits the operators that use it and their customers.

For example, before the addition of RCS, KT's ?show moov? service was designed to run on both PCs and mobile phones. The catch was that some show moov features were available on PCs but not handets, or vice-versa, creating user frustration and confusion. By eliminating the walls between wired and wireless networks, RCS enabled show moov to provide a single set of feature that would work on any device. That simplicity made show moov more user-friendly, thus encouraging more usage and reducing the operator?s support costs.

RCS includes a core feature set, implementation specifications and reference implementations, as well as interoperability testing to ensure that RCS-based services will work in a multi-vendor, multi-operator environment. But RCS also is noteworthy for what it doesn?t include. For example, it doesn?t specify user interfaces or device implementations. Instead, it provides a framework of interoperability, which frees carriers, vendors and developers to focus on developing innovative, revenue-generating services that they can be confident will tap the widest possible market. In the process, RCS reduces development costs, time to market and time to revenue, directly improving the bottom lines and competitive positions of the companies using it.

For both operators and their customers, RCS also adds value by improving quality of service (QoS). For example, many RCS-based services are similar in look, feel and functionality to IM services that are already widely available for free. But you get what you pay for: These free services don?t guarantee that a message was received. RCS supports guarantees and other QoS-type features, improving the chances that at least some customers will pay to use them, increasing the carrier?s ARPU.

RCS-based services also can be easier to use than their non-RCS counterparts. For example, with free services such as MSN?s and Yahoo?s messengers, users must create a user ID, which other users must know in order to communicate with them. But an RCS-based service eliminates those requirements and hurdles by leveraging something that every wireless user already has: a phone number. That ID makes the service more user-friendly, perhaps to the point that customers are willing to pay for it.

That?s one example of how 3G and 4G operators can use RCS to co-opt the threat of over-the-top (OTT) services, including VoIP. It?s also yet another example of why 4G operators need to be proactive in adding support for voice: If they don?t, OTT VoIP providers will step in to fill that void in the marketplace.

LTE and WiMAX have at least one thing in common: They need to support voice and messaging in order to compete with 2G and 3G. Focusing only on super-fast, affordable data services guarantees that they?ll languish as niche plays, an unacceptable strategy for operators and investors.