With the auction process for 3G services that began on Friday, India has taken a giant step towards revolutionising its telecom services.
The 3G technology enables the transfer of high-speed data applications through mobile phones. Theoretically, a data download speed of 2 Mbps becomes possible, though the actual download speed depends on various factors like the number of subscribers in a region.
Two days after the auction process for 3G spectrum ends, the government will initiate the process of auctioning spectrum for broadband wireless access (BWA) services. BWA is primarily used for high speed data services when a subscriber is stationery. The technology is best-suited for rural areas, with lower subscriber-base. BWA offers data download speed of up to 80 Mbps.
In India, the telecom regulatory authority of India (TRAI) has defined broadband as Internet access at a speed of over 256 kbps. Prior to 3G, such high speeds were possible only through wireline networks. Less than five per cent of India’s population has wireline phones, while nearly 50 per cent owns mobile phones.
“3G will help in increasing broadband penetration,” said R.S.P. Sinha, former CMD of Mahanagar Telephone Nigam Ltd (MTNL). “BWA, however, is a more effective way of providing broadband in rural areas.”
“The government should develop backhaul network so that high-speed internet access can be provided in rural areas,” said B. K. Syngal, senior principal in Dua Consulting. “Otherwise 3G will remain focused only in the urban areas, at the most in 15 to 20 cities.”
At present the government-owned Bharat Sanchar Nigam Ltd (BSNL) and MTNL are the only two 3G service providers in India. BSNL has services in 360 cities and has close to one million subscribers. MTNL provides services in Delhi and Mumbai and has close to 2.5 lakh subscribers.
For operators, the introduction of 3G technology is an opportunity to increase revenues. “3G services will enable penetration of data services and it will have a multiplier impact on the economic growth,” said Sanjay Kapoor, CEO, Bharti Airtel:
“In next two years, 3G may account for about 15 per cent of the revenues of a telecom operator,” Prashant Singhal, telecom industry leader, Ernst & Young.
Data applications make up 5-7 per cent of telcos’ revenues at present.