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3G release to spur broadband in India
Broadband is India’s best hope for delivering health, education and public services to a rural population, so the long-awaited release of 3G spectrum there is a critical step in bridging the digital divide.
October 8, 2008
P. Balaji, head of Marketing & Strategy at Market Unit India & Sri Lanka, says the upcoming auction of India’s 3G spectrum is a “long-overdue” move that will help the country in its quest for a higher standard of living.
India’s mobile telecommunications market has shown impressive growth despite the country’s limited spectrum and a shortage of bandwidth. While India has been adding 8-9 million new mobile subscribers per month, broadband reaches only 4.8 million subscribers, far short of government targets
Balaji says the disparity is the a result of India’s focus, up to now, on fixed broadband infrastructure. “But broadband on a mass scale will actually happen on a wireless platform, and specifically on 3G/High-Speed Packet Access (HSPA),” he says. “So as a market leader and responsible stakeholder in the country, we needed to put 3G on the national policy agenda.”
The effort was strengthened by Ericsson’s Gramjyoti 3G trial in 18 rural villages and 15 towns in September 2007, demonstrating how wireless broadband can help raise living standards and stimulate economic growth in remote areas.
Balaji says Ericsson was determined to see state-owned operator BSNL (Bharat Sanchar Nigam Ltd) become a catalyst for 3G, so it worked with BSNL to convince the Department of Telecom (DoT) to award spectrum to the operator prior to the auction. It will later pay the going price for the spectrum.
BSNL is expected to roll out its 3G services on a pilot basis in the first quarter of 2009, with mass deployment beginning in the second quarter. The spectrum will be auctioned off by the end of January with a combined reserve price of USD 500 million.
Balaji says that, if the spectrum is awarded without delay, India will be on target to reach its combined fixed and mobile goal of 500 million telephone subscribers and 20 million broadband subscribers by 2010. He says a significant portion of the infrastructure required for 3G is already in place, such as towers, shelter and transmission, so operators can piggyback on existing 2G networks to offer 3G services. Some have already moved to common 2G/3G core networks.
He also expects the need for managed services to grow in the 3G space. “Ericsson pioneered managed services in India, with Bharti Group as our partner. We have a strong position in managed services in India and we see momentum here with other leading operators too.”
A mix of business and entertainment applications is expected to drive initial 3G service growth in urban markets, but rural areas are a tougher business proposition, for now. The government will provide Universal Service Obligation funds for operators to build out the network and to connect hospitals, schools and community centers.
Mobile distribution is currently 60 percent in the cities but only 6 percent in rural areas. Balaji says: “We don’t want that disparity to transfer to broadband, because the number of service providers, doctors and teachers is relatively limited in rural areas.
“If you want to eradicate illiteracy and poor medical support, and have public services as a fundamental right, the only way you can do it in the rural areas is through broadband.”
