3G needs more time, say experts

Written by Nikita Upadhyay | Nikita Upadhyay | Mumbai | Updated: May 23 2011, 07:53am hrs
Although 3G services launched by private telecom companies have seen a good traction so far, it will take about six months to a year for the network to mature and be robust, feel officials with telcos and analysts.

Operators are not only focused on getting a blanket 3G coverage in circles where they have won spectrum, but also on getting a pan-India 3G footprint. While they have invested heavily in getting 3G licenses, they are also devising small sachet plans to get low average revenue per user (arpu) subscribers to use these services.

Private operators, except Reliance Communications and Tata Tele, launched 3G services this February. As per a media report, Indian 3G subscriber base stands at around one crore and is growing.

Industry watchers say that the operators with 3G have made an entry into the high arpu subscriber base. Going ahead, they are targeting even low arpu subscribers on 3G by introducing small data packs as these services are more popular in tier 1 and tier 2 cities.

Of the total subscriber base, almost 8-10% are the high average revenue per user subscribers. Collectively, the Indian telecom industry has paid around R68,000 crore for 3G licenses and roughly around R20,000 crore for equipment and

on networks.

Kumar Ramanathan, CMO, Vodafone Essar said, Most of the private operators have started rolling out 3G from February this year and hence, networks will take some time to mature and the entire 3G ecosystem will develop slowly. Subscribers have a tendency to compare 3G network quality with 2G. They need to understand that 2G network took 15 years to mature, which is not the case with 3G.

Despite initial network glitches, consumer experience of mobile internet browsing, live TV and video calling has been satisfactory. We are committed to launch 3G services in 10 new towns per day by the end of the current financial year. Idea as a provider has traditionally focused on growth from semi-urban heartlands of India and will continue to drive its 3G services from these industrial, agricultural and educational regions, said Rajat Mukarji, chief corporate affairs officer, Idea Cellular. Idea and Aircel have committed an investment of R4,200 crore and R2,300 crore for 3G network infrastructure, respectively.

Most operators who launched their 3G services said that almost 10% of their subscriber base have 3G enabled handsets and they will be the early adopters of these services. Hemant Joshi, Partner, Deloitte Haskins & Sells, said that full rollout of 3G networks and a mature 3G coverage pan-India will take the industry anywhere between six months to a year more.

Analysts also signal towards rapid proliferation of these services amongst the high arpu subscribers. The future is bright for 3G in India. However, with these price levels, uptake of 3G services by the low arpu subscriber is not possible. Hence, more daily data and application packs are needed for mass acceptance, said an industry analyst. He added that user experience on the 3G platform will be the key differentiator rather than pricing.

Deepak Gulati, executive president, mobility, Tata Teleservices says, When we launch in a circle, we ensure we have a blanket coverage before we announce 3G services there. In the long run, we see ourselves as the finest 3G services provider from a consumer point of view.