Road to third generation

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Europe is all set to hang up on 2G or second generation phones in two years. As Indian operators get ready to rollout 3G networks next year, mobile companies are expecting a wave of conversions here too. While the government expects private operators to be in the market by early 2009, Bharat Sanchar Nigam Ltd (BSNL) is planning to introduce its 3G services by December this year. Analysts like Gartner predict 3G services will start rolling from the middle of 2009.

In western Europe, subscribers will stop using 2G phones by 2010 and GPRS, 3G and 3.5G phones will dominate, according to Forrester Research. Simple 2G GSM phones, which have a 5% market share as against 78% of phones with GPRS technology, will gradually vanish from the western European markets by 2010, it says.

Will a big chunk of the India mobile subscriber base that is expected to swell to 750 million by 2012, buy 3G phones? For P Balaji, vice-president (marketing and strategy) of Ericsson India, even a conservative number of a minimum of 100 million-plus conversion from 2G and 2.5G to 3G by 2012 will make the latter a success in India. Gartner’s Asia-Pacific senior analyst (telecom) Madhusudan Gupta says by 2012, every fifth phone sold in the Indian market will be a 3G one. That means around 150 million 3G phones.

Vivek Mohan, managing director of Alcatel Lucent for the India region, thinks that it is the number of subscribers that would make the difference for Indian operators and technology service providers like his company vis-a-vis the US and European counterparts.

Today, the total mobile phone subscriber base in India is 287 million with a penetration level of around 25%, as against a subscriber base of 326 million with a penetration of 81% in western European countries. “For some time, 3G in India would remain a city-based phenomenon. But at the same time, it would narrow down the rural-urban digital divide by providing broadband connections in areas where there is no wireline” says Balaji.