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3G in India: balancing price and performance
India recorded 6.2 million new mobile subscribers in September 2006 alone. Operators vying for the new 3G licenses are hoping to leverage this growth through a combination of low-priced handsets and advanced services that target an enormous market.
October 17, 2006
With more than 120 million subscribers today, and a market growing exponentially, the opportunities in India are huge. "India is not just a country, it is a continent," says Mats Granryd, head of Market Unit India and Sri Lanka. "It is a huge and very diverse place."
Subscriber growth - strongest amongst subscribers in the low ARPU (average revenue per user) category - is the most significant development going on in the Indian telecommunications market. Even though initial deployments of 3G will be in major urban areas such as New Delhi and Mumbai, network solutions for the subcontinent are hoping to capture some of the enormous rural market in the future.
The availability of cheaper 3G handsets is a major factor that will drive growth of 3G throughout India. "Eventually, lower-priced 3G handsets will replace the already cheap GSM handsets," Granryd says. Telecommunications services in India are still primarily delivering voice services, but if users are to adapt or migrate to new 3G services, price will need to be carefully considered.
Ericsson's history in India dates back to 1903. Today, it has 24 offices across the entire subcontinent, including facilities for manufacturing, research and development and network operations.
Granryd says Ericsson is well positioned with the four operators currently testing 3G networks there (Bharti Airtel, Hutchison Essar, MTNL and BSNL). "We are continuing to be innovative with our product offering." This means sharing passive infrastructure such as towers and climate control, offering alternative power sources and sites that require less maintenance.
The company is also leveraging its Expander solution, which is aimed at delivering radio waves further into rural areas using as few sites as possible. Only 40 percent of India's geographic area is serviced by some kind of telecommunications service.
The goal is to eventually deliver the same kind of services to rural customers as those available in urban areas. Using 3G to help these communities get connected is "a great way of improving the quality of life," Granryd says. "Rural villages could have one or two PCs with HSPA (High-Speed Packet Access) where you could do e-education, medical check-ups or vote."
Granryd says it is hard to estimate exactly when the next phase of 3G will come to India. The first licenses are expected to be announced at the end of this year, with commercial deployment during 2007. However, because the trend in India is to deploy the latest and the greatest, the lifespan of WCDMA could be fairly short - moving over quickly to HSPA.
The opportunities in India are enormous based solely on the sheer size and exponential market growth-rate. The potential, however, goes far beyond just adding new voice subscribers. India has a colossal music and film industry and 3G-based mobile TV could be one way to reach a mass-market audience in a country of more than one billion inhabitants.
