3G: The Beginning of a New Era?
Date: Thursday , June 03, 2010
The month of May was a hectic month for Indian telecom operators as well as for the telecom department. With 3G auctions coming to an end, finally, the government received Rs. 67,719 crore ($15 billion) from all nine telecom companies, including MTNL and BSNL, that took part in the auction as payment to the exchequer for third-generation (3G) spectrum.
The debate on what 3G will bring to a consumers’ table has been raging for more than three years now; and whatever has been debated or predicted is in the verge of becoming a reality now. Simply speaking, at speeds that are almost 10 times the existing technologies, 3G will provide a better user experience, while creating fresh opportunities for high speed data services such as video telephony, video-on-demand, mobile TV, and other entertainment related services. Plus, Internet access without giving up on voice is a value proposition of 3G. Hence, from the Indian consumer perspective, the first and foremost thing that one has to look at is that PC penetration is low, limiting the broadband penetration, and so 3G can enable mobile phones to become the dominant mode of Internet access. Already in the youth demographic, the biggest amount of time on the Internet is spent on the mobiles today.
Not only that. Then there are applications. One youth trend is, social networking is becoming a key need - be it uploading pictures or tweeting. There is also entertainment content - music, Bollywood, and TV on the go - that has already been launched along with practical content such as maps among others. Also, there is the rural application. Here we see not just the smartphone, but also the desktop being built on mobile chipsets in order to bring a computing experience on mobile to rural India.
Though all these look rosy, in a mass market like India, from a consumer perspective, it’s obvious that affordability alone would make 3G successful. Still it’s not clear how operators may use the allotted spectrum. Perhaps, one cannot rule out the possibility that operators who invested huge amounts of money to buy 3G spectrums could have a detrimental effect on the prospects of 3G services they would offer. At times, companies bid for the sake of bidding and later find it impossible to execute the next steps like creating requisite infrastructure and more, which could be dangerous. A decade ago in the UK, the companies bought spectrum at such a high price that it became difficult for them to roll out the services and companies went bankrupt.
No doubt, 3G is an opportunity creator driven by massive broadband penetration, which is extremely good for India. But it remains to be seen how operators will come out with ‘consumer friendly’ plans to make the 3G rollout successful. If they do, it would be the beginning of a new era in the history of telecom in India.
Please do share your thoughts with us.