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GPRS -- Will it be a still-born?
Neeraja Kumar
New Delhi: "Contrary to what people think, currently General Packet Radio Service (GPRS) is not commercially viable. We can roll out GPRS services within eight weeks, but we won't do it, till we get a mass market," Mr Sandeep Das, CEO, Hutchison Max."We will wait for the worldwide GPRS market to stabilise, before we launch in India. Fortunately we had not made any rash announcements about our GPRS plans, like some others," Mr Sunil Bharti Mittal, chairman and managing director, Bharti Enterprises."The market is not ready for GPRS right now. Maybe in 2002, we will get into GPRS," Mr Dilip Modi, co-CEO, Spice Communications.Wireless Application Protocol (WAP) is dead. But will GPRS be a still born? Even as BPL tries its hand at GPRS and Esotel plans to start GPRS trials in at least one of its three circles by May, the rest of the industry has adopted a wait and watch strategy. So why this dis-illusionment with GPRS, the 2.5 generation (2.5G) mobile Internet technology, which transmits data in packets and hence ensures an always-on Internet connection at no extra costs? Till last year, the telecom world was waiting for GPRS to beef up data transmission rates on WAP from 9.6 kbps to at least 64 kbps, but now, when GPRS is finally here, everyone is wary. Reasons, according to industry experts range from lack of handsets, fear of technological obsolescence, lack of applications, and a bad experience with WAP. Consider the issues: Handset availability: Lack of availability of GPRS handsets is the single-most important issue delaying the launch of GPRS. While GPRS equipment to set up networks was available last year, the terminals have come out only now and are still not easily available. Add to it the fact, that at the current price range of over Rs 25,000 a piece, they are out of the range of the mass market."Till handsets are widely available, there is no point launching GPRS services," says Mr Asim Ghosh, who heads the Hutchison operations in India.Mr Manoj Kohli, CEO, Escotel Mobile Communications, also admits that the glitch in setting up GPRS networks is the issue of handset availability worldwide. Significantly, at these prices, the handsets are out of reach of the early adopters: the younger generation of users. "At these price levels, you are not talking of a mass market, but a technology demonstrator. Unless handsets come down to sub-Rs 10,000 level, GPRS won't really reach the mass market," says Mr Das. However, the industry recognises that this is a vicious circle. Handset prices won't come down till a critical mass is attained and the operators say that critical mass won't come till handset prices come down. The final word? ``Right now, in GPRS you are talking of a minuscule market. It will be a small segment within WAP which is also not a very big market as of now," says Mr Das. Technology obsolescence: The industry is also afraid that while there is no commercial possibility for a mass market in the next six months, GPRS might get pushed behind by newer technology-like third-generation (3G) Internet mobile technology-by then. At that time, the high cost of replacing GPRS handsets will emerge as an even bigger issue.Only now have consumers started shifting to WAP handsets-whose price hovers around the acceptable Rs 8,000 figure. "If we ask them to buy an expensive GPRS handset now, what will happen six months later when a newer standard hits the market?" says a Delhi-based cellular operator.* Lack of applications: End-user value is the differentiator between success and failure. The fact that WAP failed to live up to its expectations worldwide, can be attributed mainly to non-availability of real-value applications, which could have ensnared customers. "A lot of companies worldwide have burnt their fingers with WAP, because it did not catch the customer fancy," explains Mr Mittal. Unfortunately for GPRS, the scene is even worse, since both developers and operators have already burnt their fingers with WAP. They are now doubly cautious about taking yet another dive into another unknown technology. ``It's like a chicken-and-egg situation. People are still waiting for networks to take off and networks in turn are heavily dependent on these applications," says Mr Ankush Johar, business development manager, Lifetree Cyberworks - a company, which develops WAP-based applications and is now branching out into developing GPRS applications as well. Here's why it's a catch-22 situation. The Indian cellular companies are waiting for development of GPRS applications, which deliver end-customer benefits (and hence revenues) for these services, before they actually roll out GPRS networks - which cost around $4 million to set up. The application developers, on the other hand, are waiting for GPRS networks to take off, before they delve into this unchartered territory. "As a technology, GPRS has delivered all the promises it made. The issue is not technology. The issue is applications. If you launch commercially now, how can you earn revenues without applications?" says a senior manager at a multinational telecom equipment manufacturer. For instance, i-mode in Japan has been a success only because it was able to deliver value to the customers, who could not spare space for PCs and got hooked on to the mobile Internet. "What use is technology, if it can't provide end-customer benefits? Demand will grow only if there is exciting content available. We first need to work on the destination," says Mr Das. Moreover, companies will have to develop localized applications for each city to provide end-user benefit. If bigger companies execute these projects, it will only add to the cost of rolling out the services. What needs to be done is to involve smaller player who can develop these applications, but that will need a lot of hand-holding by both vendors and equipment manufacturers, points out Mr Johar. While there are other operational issues like billing which are holding back the GPRS rollout-an addition glitch in the India market is telecom policy flip-flops. Concerned by the uncertain policy horizon, telecom players are also cautious about making heavy investments in setting up GPRS networks. Says Mr H N Nanani, chief operating officer, telecom business, ModiCorp Limited: ``GPRS/WAP investments have taken a backseat due to the WLL fiasco.'' Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
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