Finally the country is set to see the rollout of 3G services with the government allocating spectrum to the winning operators. By the time we bid adieu to 2010, hopefully the first beginnings of such services providing high data download and video streaming would have begun. The high bid prices have somewhat spoiled the party for the operators as none of them could bag the spectrum in all the 22 circles of the country. Therefore, there?s apprehension that 3G services would come at a premium, meaning the tariffs would be high and so it would be subscribed by a minuscule section of the society.
On the face of it, the logic seems fine as some operators have also made a case for high tariffs. However, if one analyses the dynamics of our telecom market the case for high tariffs for 3G services does not hold water. The Indian telecom market has undergone change in such a manner that purely cost-based tariffs don?t work any more. Look at the 2G market: Vodafone acquired Hutch?s stake in 2007 at over $11 billion, so ideally tariffs for its services should have been high, but that?s not the case!
If tariffs are determined by competition in the market then there?s going to be enough. Seven private operators have bagged the spectrum and would be starting the services around the same time. Add to this the two state-run players, MTNL and BSNL, which already have services although subscription remains low, and the stage is set for a competitive market that would be no different from the current 2G services.
Another reason for the tariffs to be competitive could be that since a bunch of operators would begin services around the same time, they would offer enough freebies to attract subscribers. Further, there?s just not the possibility of voice tariffs to be higher than the 2G one or else subscribers would not migrate to 3G, which the operators want in metro cities to decongest their 2G networks. What is likely to happen is that data download services could be priced slightly higher than voice services. Here some initial, one-time costs could be involved which the subscribers would have to pay. In fact, a cursory glance at the tariffs offered by MTNL and BSNL does not show any major tariff difference between 2G and 3G services. It, certainly, would be interesting to see how the latest, coming round of 3G tariff war pans out in the industry.
anandita.mankotia@ expressindia.com
