Telecom operators seemed to have dialled a wrong number with Indian mobile users as far as 3G services are concerned, thanks to low smartphone penetration and ignorance about the service itself.
In the one year since its launch, 3G adoption rates among subscribers remain very low. Market estimates suggest that the total number of 3G subscribers in India is just about 2% of the total number of cellphone users. India has 893.8 million cellphone users according to TRAI (Telecom Regulatory Authority of India).
Despite the small numbers it is a good start, said Sanjay Behl, group head, brands and marketing, Reliance Communications. “The real issue was getting the user understand the relevance of the service,” said Behl.
A Vodafone spokesperson also said that the biggest challenge was to get consumers to experience 3G technology itself.
Firms are trying out new ideas to overcome the problem.
For example, Tata Teleservices launched a series of “educational” initiatives, beginning with an experiential campaign at Tata DOCOMO Dive-In stores, where anyone could walk in and live the 3G experience.
Reliance Communications is already seeing a double-digit month-on-month growth in 3G subscriber numbers, sources said. Another big hurdle was the low smartphone penetration.
“With just 3% of cellphone users using smart phones, it was difficult for 3G to grow,” said a Vodafone spokesperson said. “Every new technology or service requires a gestation period for it to establish itself. 3G is a long-term business case which needs policy certainty.” “At Airtel, we recorded a response from over 7 million early adopters in a short period of time,” said an Airtel spokesperson.
Analysts feel that pricing is also a hurdle, besides the low rate of Internet penetration in the country. “Only 3-4% of mobile subscribers access internet on their cellphones,” said Ankita Somani, analyst at Angel Broking. “Unless this picks up 3G growth will be hampered.”
Operators like Reliance Communication are planning to introduce flexible tariff plans to address the pricing issue. “We have got feedback that users are shocked when they see the bill and understand the bill in terms of data usage,” said Behl. “We are introducing best-fit plans so the customer does not get a shock.”